Monthly Economic Summary — October 2026

Higher borrowing costs were the main story for housing this fall. The 10-year Treasury yield reached 5.28% in September, a multi-decade high, before easing to about 5.0%. Mortgage rates followed, with the 30-year fixed near 7.3%, at the high end of the range of the past four years. Stock market gains supported buyers this spring, especially at higher price points, but that boost is fading as equity growth slows.

In the short term, pressure on rates is likely to continue. The Fed raised rates in September for the first time in three years, and markets expect more increases into 2027. Inflation remains above the 2% target, with CPI at 3.7%, and oil is near $100 a barrel.

The job market is a mixed bag for real estate. Unemployment remains low and initial unemployment claims are falling. That’s one reason there are very few distressed or delinquent borrowers. Hiring is also slow, though: employers added only 29,000 jobs in September, and fewer people are relocating for work this fall.

Potential homebuyers have reacted to higher rates. Pending sales are averaging about 16% below last year, and weekly purchase indicators are down roughly 20%. Inventory has risen to 1.15 million homes, 5% more than last year, with the largest gains in the Northeast. Builders are pulling back as well: new home completions are at low levels not seen since the pandemic lockdowns.

Home prices are still mostly holding steady. The Case-Shiller national index is up 2% from last year, and the median sale price across the 30 largest metros is up 1.3%, with a similar number of markets rising and falling.

For buyers, more homes to choose from and less competition mean more room to negotiate. That’s a trend that looks to extend into 2027.

Our goal is always to help you understand what’s happening in the market right now, so you can make the best decisions.

Mike Simonsen

Chief Economist | Compass International Holdings

Compass RE is a licensed real estate broker. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity.