Monthly Economic Summary – September 2026
This Monthly Economic Summary highlights key trends in the market for September 2026, providing valuable insights for investors and homeowners alike.
September brought the sharpest shift in the housing market we’ve seen this year, and it started in the bond market. The 10-year Treasury yield pushed above 5.1%, its highest level since 2007. Mortgage rates followed to about 7.25%, the highest in 28 months. The Fed raised rates for the first time in three years, and bond markets now expect more hikes in October and December.
30 Years of Mortgage History
Given current levels of government spending, international conflict, and inflation fears, bond markets have pushed mortgage rates to the highest levels in 28 months.
Source: Source: Freddie Mac, Mortgage News Daily, Compass
The economy is running hot. Services activity just posted its strongest reading in three years. August added 162,000 jobs, unemployment claims remain near historic lows, and oil is back above $100 a barrel. Inflation moved up again this summer, with CPI at 3.4% and PCE at 3.7%, well above the Fed’s 2% target. Markets have moved from stagflation fears to ‘growthflation.”Stronger growth plus rising prices clearly calls for higher rates.
Housing demand is feeling it. Overall, pending sales over the last four weeks are running 4% below last year. Every high-frequency demand indicator we track (our own pending sales, MBA purchase applications, and Xactus mortgage intent) turned down as rates jumped. The weakness is concentrated at the lower price points. With the S&P 500 up nearly 16% from a year ago, the wealth effect is keeping the luxury segment ahead of 2025.
Pending Sales Growth Has Slowed
In the last four weeks, pending sales have come in 4% fewer than the same period in 2025.
Source: Source: Altos Research, Compass • Weekly pending home sales rate, single family + condo, 4 week rolling average
On the supply side, inventory is growing again, and we now expect 2–5% gains for the year. Nationally, supply is just 5% below 2019, though conditions vary dramatically from state to state. Prices are holding: home prices are up 1.5% year over year, and median list prices have stayed in a narrow band for four years.
Importantly, this is not a distressed market. Mortgage delinquencies are near 1%, and foreclosures remain very low by historical standards.
The slides below walk through each of these trends in detail.
Click Here for Full Slides
Hem-young deFazio
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*This figure is based on an average sale price.
