The economy continues to send mixed signals as investors, businesses, and consumers look for clearer indications of where inflation and interest rates are headed. Recent employment data has suggested that the labor market is cooling, raising expectations that the Federal Reserve may have room to lower interest rates further. However, inflation remains a concern, particularly with elevated energy costs and continued uncertainty surrounding global economic conditions. Next week’s Consumer Price Index (CPI) report will be closely watched, as it will provide an important update on inflation and could influence the direction of mortgage rates, Treasury yields, and future Federal Reserve policy. For the housing market, lower borrowing costs would be a welcome development, particularly as home prices in many Southern California communities have remained remarkably resilient despite higher mortgage rates.
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 8, 2026, were as follows: The 30-year fixed mortgage rate was 7.4%, upfrom 7.28% last week. The 15-year fixed was 6.73%, up from 6.6% last week.
The graph below shows the trajectory of mortgage rates over the past year.
U.S. Treasury Bonds – The 10-year Treasury bond closed the week yielding 5.24%, down slightly from 5.28% last week. The 30-year Treasury bond yield ended the week at 5.60% down slightly from 5.63% last week. We watch bond yields because mortgage rates follow bond yields.
Stock Markets – The Dow Jones Industrial Average closed the week at 51,654.95, up 0.1% from 51,176.96 last week. It is up 7.47% year-to-date from 48,063.29 on December 31, 2025. The S&P 500 closed the week at 7,811.54, up 1.2% from 7,722.72 last week. The S&P is up 14.1% year-to-date from 6,845.50 on December 31, 2025. The Nasdaq closed the week at 27,366.17, up 0.6% from 27,190.86 last week. It is up 17.74% year-to-date from 23,241.99 on December 31, 2025.
Home sales – Next week the California Association of Realtors and the National Association of Realtors will release their September home sales reports. We use the same data and you can get a report now for your city or zip code on our website at RodeoRealty.com.
Have a great weekend!