Economic Update | Week Ending October 23, 2026

The U.S. economy continued to show resilience this week despite persistent inflation, elevated interest rates, and uncertainty surrounding the Federal Reserve’s next move. Business activity remained strong in October, with manufacturing and services continuing to expand, while unemployment claims remained low, indicating that employers are generally retaining workers. Consumer spending continued to support economic growth, although consumer confidence remained weak as households struggled with higher prices. Inflation continued to be a concern, particularly as rising energy and production costs put additional pressure on businesses and consumers. Treasury bond yields remained volatile but declined from their recent highs, providing some relief to mortgage rates. The Federal Reserve will meet next week, and investors will be watching closely for indications of its future interest rate policy. While the economy has performed better than many economists expected, persistent inflation and high borrowing costs continue to weigh on the housing market and could slow economic growth in the months ahead. While the economy has performed better than many economists expected, persistent inflation and high borrowing costs continue to weigh on the housing market. However, buyer demand remains, and even a modest decline in mortgage rates could bring more buyers into the market and help stimulate sales activity in the months ahead.

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 22, 2026, were as follows: The 30-year fixed mortgage rate was 7.32%, down from 7.4% last week. The 15-year fixed was 6.68%, down slightly from 6.71% last week.

U.S. Treasury Bonds – The 10-year treasury bond closed the week , yielding 5% ,down from 5.09% last week. The 30-year treasury bond yield ended the week at 5.33%, down from 5.43% last week. We watch bond yields because mortgage rates follow bond yields.

Stock Markets – The Dow Jones Industrial Average closed the week at 52,215.16, up 0.4% from 52,002.41 last week. It is up 8.6% year-to-date from 48,063.29 on December 31, 2025. The S&P 500 closed the week at 7,623.68, down 0.5% from7,659.44 last week. The S&P is up 11.4% year-to-date from 6,845.50 on December 31, 2025. The Nasdaq closed the week at 25,955.34, down 0.7% from 26,140.03 last week. It is up 11.7% year-to-date from 23,241.99 on December 31, 2025.

September U.S. Existing-Home Sales increase despite higher rates – The National Association of Realtors reported that existing-home sales, which include single-family homes, townhomes, condominiums, and co-ops , increased 1.5% month-over-month in September, reaching a seasonally adjusted annual rate of 3.99 million homes. Year-over-year, sales were down 2.2% compared to September 2025. The median price paid for an existing home was $417,500, down 2.7% from $429,100 in August, but up 1.3% from $412,300 one year ago, marking the 39th consecutive month of year-over-year price increases. Housing inventory increased to 1.60 million homes for sale at the end of September, up 1.9% from August and up 4.6% from one year ago. At the current sales pace, unsold inventory represented a 4.8-month supply, unchanged from August but up from 4.5 months in September 2025. First-time buyersaccounted for 31% of all existing-home sales in September, up from 30% in August and one year ago. All-cash transactions represented 27% of sales, unchanged from August but down from 30% last September. Individual investors and second-homebuyers accounted for 20% of purchases, a significant increase from 15% in both August and September 2025. Distressed sales, including foreclosures and short sales, remained historically low at just 2% of all transactions, unchanged from both the previous month and one year ago.

California Existing-Home Sales – September 2026 – The California Association of Realtors reported that existing single-family home sales totaled 260,410 in September on a seasonally adjusted annualized basis, down 3.4% from 269,620 in August and down 6.5% from 278,540 in September 2025. The statewide median home price was $899,720, down 0.2% from $901,420 in August but up 1.7% from $884,390 one year ago. The Unsold Inventory Index stood at 3.7 months, unchanged from August but up slightly from 3.6 months in September 2025.