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Although oil prices climbed, it was another good week for mortgage markets. Investors continued shifting money out of riskier technology stocks and into safer investments, including bonds, helping push mortgage rates lower.
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In September, sales of previously owned homes rose a little from August but still were a bit lower than a year ago. The median price of $417,500 was up 2% from last year at a record high for the month of September. Inventory remains one of the biggest challenges for buyers, but the recent trend has been positive. There is only about a 4.8-month supply of homes nationally, still below the roughly six months typically considered a balanced market. However, inventory was up 5% from a year ago, at the highest level since 2019.
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The latest home building data was not encouraging. Overall housing starts in September declined 5% from August, far more than expected, and are running 7% below last year's pace. Single-family starts declined to the lowest level since September 2025, while single-family building permits, a leading indicator of future construction, fell to the lowest level since 2023.
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Finally, a survey of home builder sentiment on housing market conditions from the NAHB unexpectedly dropped to 29, the lowest level since 2012, and has remained in negative territory below 50 for thirty straight months. To help generate demand, 66% of builders offered sales incentives in September, while 43% reduced home prices, the most since 2020. Builders cited high mortgage rates, labor shortages, and rising material costs as significant obstacles to increasing new home supply.
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The Big Picture: For now, mortgage rates remain caught between competing forces. Investors are continuing to weigh a mix of slowing economic data, stubborn inflation, and global uncertainty. As a result, mortgage rates will probably remain volatile from day to day as investors react to Fed comments, economic data, and geopolitical events. Meanwhile, the housing market continues to face a combination of limited inventory, affordability challenges, and cautious builders.
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Looking ahead, attention will remain fixed on the conflict in the Middle East and oil prices. The next Fed meeting will take place on Wednesday, and most investors anticipate that there will be no change in the federal funds rate. The next European Central Bank meeting will take place on Thursday. For economic reports, New Home Sales will come out on Tuesday. The PCE price index, the inflation indicator favored by the Fed, and third quarter GDP, the broadest measure of economic activity, will be released on Thursday.
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| Weekly Change |
| 10yr Treasury |
fell |
0.10 |
| Dow |
rose |
200 |
| NASDAQ |
fell |
100 |
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| Calendar |
| Wed |
10/28 |
Fed Meeting |
| Thu |
10/29 |
Core PCE |
| Thu |
10/29 |
GDP |
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All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.
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