The Federal Reserve dropped its key interest rates by ¼% in October –Unfortunately, in the announcement of the rate drop Fed Chairman, Jerome Powell stated that the Fed does not expect another drop this year at this time. The stock market, bond, and mortgage investors felt that there would be another drop this year. That expectation was built into stock prices, bond yields, and mortgage rates. Those interest rates increased after Powell spoke and stocks dropped a little off their all-time high levels set on Tuesday.
Government Shutdown – Thirty-one days into the government shutdown stock markets have continued to rise to record levels almost every day. There have been lots of issues. Strictly speaking to financials, the jobs and unemployment report, the Producer Price Index, the Personal Consumption Expenditure Index, Retail sales, new home sales, and other data for September were not released in October. The CPI report was released late in the month because it was needed to calculate the annual Social Security benefits increase.
Inflation is showing signs of leveling – The Consumer Price Index (CPI) for September was released. It showed that consumer prices rose 3% from one year ago. The 3% CPI rate was the highest level since January 2025, but below analysts’ expectations of a 3.1% rise. The CPI rate dropped steadily after peaking at 9.1% in June 2022, its highest level since 1981. By April 2025 it had worked its way down to 2.3%. Experts felt that we were just months away from hitting the Fed’s 2% target but when the administration began increasing tariffs, some of those tariffs were passed along to consumers and the CPI rate began to steadily rise. Even though the CPI rate was the highest since January, investors felt good about the numbers and stock markets ended the week at record levels. The Core CPI rate which excludes food and energy rose 3%from one year ago as well, down from 3.1% in August. The CPI report was delayed due to the government shutdown. Other reports, like the September Jobs report, the Producer Price Index and others are delayed indefinitely. The government called in furloughed government employees to complete the CPI report because it was needed to calculate the amount of the annual increase to social security payments. The increase was set at 2.8% after the CPI report was released.
The graph below shows the CPI rate since 2021
Stock markets hit record levels almost every day in October – The Dow Jones Industrial Average ended the month at 47,562.87, up 2.5% from 46,397.86 on September 30, 2025. The Dow is up 6.8% year-to-date. The S&P 500 closed the month at 6,840.20, up 2.3% from 6,688.46 on September 30, 2025. It is up 13.3% year-to-date. The NASDAQ closed at 23,724.96, up 4.7% from 22,660.01 at the end of September. It is up 20.9% year-to-date.
U.S. Treasury Bond Yields – The 10-year U.S. Treasury bond yield closed the month at 4.11%, down from 4.16% on August 30, 2025. The 30-year treasury yield ended the month at 4.67%, down from 4.73% on August 30, 2025. We watch bond yields because mortgage rates often follow Treasury bond yields.
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 30, 2025, were as follows: The 30-year fixed mortgage rate was 6.17%, down from 6.30% last month. The 15-year fixed was 5.41%, down from 5.49% last month.
The graph below shows the trajectory of mortgage rates over the past year.
September home sales – The California Association of Realtors and the National Association of Realtors release home sales data on the third week of each month for the previous month. Here is the September 2025 home sales recap. You can run a report on your city or zip code with the same data at RodeoRe.com.
U.S. existing-home sales – September 2025 – The National Association of Realtors reported that existing-home sales totaled 4.06 million units on a seasonally adjusted annualized rate in September, up 1.3% from the number of homes sold in August and up 4.1% from the number of homes sold last September. The median price paid for a home sold in the U.S. in September was $415,200, down 1.75% from $422,600 in August but up 2.1% from $406,700 one year ago. There was a 4.6-month supply of homes for sale in September, up from a 4.2-month supply last September. First-time buyers accounted for 30% of all sales, up from 28% last month. Investors and second-home purchases accounted for 15% of all sales, down from 21% in August. All cashpurchases accounted for 30% of all sales, up from 28% last month. Foreclosures and short sales accounted for 2% of all sales
California existing-home sales – The California Association of Realtors reported that existing-home sales totaled 277,410 on an annualized basis in September, up 5% from 264,240 in August. Year-over-year sales were up 6.6% from a revised 260,340 annualized home sales last September. The statewide median price paid for a home was $883,640 in September, down 1.7% from $899,130 in August and up 1.8% from $868,150 in September 2024. The unsold inventory index showed that there was a 3.6-month supply of homes for sale in September.
The graph below shows CAR sales data by county for Southern California.