Economic Update | Week Ending September 12, 2026

Long-term Treasury yields surged this week, with the 10-year reaching its highest level in nearly three years and the 30-year hitting its highest level since 2007. The rise in bond yields pushed mortgage rates higher, creating another challenge for homebuyers and affordability. Despite the recent increase in rates, the economy continues to show resilience, employment remains solid, and underlying inflation has shown signs of gradually improving. Housing demand has also remained surprisingly resilient given the current interest-rate environment. The Core inflation rate, which excludes food and energy, was 1% below the overall inflation rate, showing that much of the uptick in inflation since the Iran conflict began is due to high energy costs. Should energy costs moderate in the months ahead, Treasury and mortgage rates could begin to ease, which would improve affordability and provide a meaningful boost to housing activity.

The Consumer Price Index (CPI) rose 0.4% in August – The U.S. Bureau of Labor Statistics released the August CPI report on Friday. It showed that the CPI rose 0.4% in August, following a 0.1% increase in July. Consumer prices were 3.4% higher than one year ago, unchanged from July’s annual rate. Much of the monthly increase was driven by energy costs, with gasoline prices jumping 3.9%. Core inflation, which excludes volatile food and energy prices, increased 0.3% for the month but improved slightly on a year-over-year basis, falling to 2.4% from 2.5% in July. While inflation remains above the Federal Reserve’s long-term target, the continued moderation in core inflation is encouraging. The higher headline number, largely influenced by energy prices, could make the Federal Reserve more cautious as it considers the direction of interest rates 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 September 10, 2026, were as follows: The 30-year fixed mortgage rate was 6.76%, up from 6.71% last week. The 15-year fixed was 6.09%, up from 6.04% last week.

U.S. Treasury Bonds – The 10-year treasury bond closed the week yielding 4.95%, up from 4.78% last week. The 30-year treasury bond yield ended the week at 5.37%, up from 5.24% last week. We watch bond yields because mortgage rates follow bond yields.

Stock markets – The Dow Jones Industrial Average closed the week at 52,573.29, down 1.6% from 53,414.25 last week. It is up 9.4% year-to-date from 48,063.29 on December 31, 2025. The S&P 500 closed the week at 7,656.95, down 0.8% from 7,718.60 last week. The S&P is up 11.8% year-to-date from 6,845.50 on December 31, 2025. The Nasdaq closed the week at 26,333.04, down 0.7% from 26,506.99 last week. It is up 13.3% year-to-date from 23,241.99 on December 31, 2025.