September ended with an economy that continues to show resilience, but inflation and borrowing costs remain challenges. The conflict involving Iran and uncertainty surrounding oil supplies pushed energy prices higher during the month, adding pressure to inflation. The Federal Reserve raised its benchmark interest rate by one-quarter point in September, citing elevated inflation despite solid economic growth. Consumer spending increased in the latest report, while annual inflation measured by the Fed’s preferred index stood at 3.4%. These conditions suggest that buyers and sellers should plan around current financing costs rather than assume that lower rates are just around the corner.
For real estate, affordability remains a central issue, with Freddie Mac’s average 30-year fixed mortgage rate reaching 7.28% on October 1. Our local Southern California real estate market has remained very resilient despite higher mortgage rates, with single-family home prices holding remarkably steady. The condominium market, however, has been more challenging, and prices have not shown the same stability. Higher insurance costs, increased reserve funding needs, and required balcony inspections and repairs have contributed to rising HOA fees and, in some buildings, special assessments. These additional ownership costs weigh on buyers’ purchasing power and make condominium sales more difficult. Our view is that this environment makes realistic pricing, strong marketing, and careful negotiation especially important. Southern California is a collection of distinct local markets, and neighborhood sales and competing inventory provide a more useful guide than national headlines alone. As we enter the final quarter, buyers and sellers should focus on their individual needs and the opportunities available today.
Mortgage rates – Every Thursday, Freddie Mac publishes interest rates based on a survey of mortgage lenders throughout the week. The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of October 1, 2026, were as follows: The 30-year fixed mortgage rate was 7.28%, up from 6.66% at the end of August. The 15-year fixed was 6.6%, up from 5.98% last month.
The graph below shows the trajectory of mortgage rates over the past year.
Stock markets – Investor confidence in AI-related companies continued in September, even as concerns about the technology’s risks received greater public attention. Expectations of an AI revolution sustained interest in chipmakers, data center developers, and companies providing the technology and infrastructure behind AI. That enthusiasm helped keep the broader stock market largely resilient despite higher borrowing costs and economic uncertainty that weighed on some traditional businesses. Dow Jones Industrial Average closed the month at 50,906.05, down 4.3% from 53,185.90 last month. The Dow is up 5.9% year-to-date from 48,063.29 on December 31, 2025. The S&P 500 closed the week at 7,651.54, down 0.5% from 7,686.14 last month. The S&P is up 11.8% year-to-date from 6,845.50 on December 31, 2025. The Nasdaq closed the week at 26,861.06, up 1.9% from 26,370.89 at the end of August. The Nasdaq up 15.6% year-to-date from 23,241.99 on December 31, 2025.
U.S. Treasury Bond Yields — Yields climbed in September as investors weighed persistent inflation and concerns about growing government debt and budget deficits. Higher yields added upward pressure to borrowing costs, including mortgage rates. The 10-year U.S. treasury bond yield closed the month at 5.29%, up sharply from 4.75% on August 31, 2026. The 30-year US treasury bond yield ended the month at 5.64%, up sharply from 5.25% on August 31, 2026.
The California Association of Realtors and the National Association of Realtors release their home sales report for the previous month around the third week of the month for the previous month. Below is a summary of their August numbers. You can also get more local figures from the same data for your zip code or city at RodeoRe.com.
U.S. existing-home sales – August 2026 – The National Association of Realtors reported that existing-home sales totaled 3.98 million units on a seasonally adjusted annualized basis in August, down 2.0% from 4.06 million units in July and down 1.2% from one year ago. The median price paid for an existing home in the U.S. was $429,100 in August, up 1.6% from $422,400 one year ago. There was a 4.9-month supply of homes for sale in August, up from a 4.6-month supply in July and August 2025. First-time home buyers accounted for 30% of all homes sold, 27% of transactions were cash sales, 15% were individual investors or second-home buyers, and 2% of sales were distressed sales, which include foreclosures and short sales.
August California existing-home sales – The California Association of Realtors reported that existing-home sales totaled 269,620 on an adjusted annualized basis in August, up 2.4% from 263,320 in July and up 1.4% from 265,780 annualized sales in August 2025. The statewide median price paid for a home was $901,420 in August, up 1.6% from $887,210 in July and up 0.1% from $900,620 last August. Housing inventory loosened in August but remained tighter than one year ago. The Unsold Inventory Index showed that there was a 3.7-month supply of homes for sale in August, up from 3.4 months in July, but down from a 3.9-month supply in August 2025.
