October 19, 2026

Weekly Mortgage & Market Update

Week of October 12, 2026 in Review

Inflation exceeded expectations in September, existing home sales rebounded, and higher gas prices influenced retail spending figures.

Hotter Inflation Puts the Fed in Focus

Consumer Price Index (CPI) rose 0.6% in September, driven largely by energy costs. Annual inflation increased from 3.4% to 3.7%, above expectations. Core CPI rose 0.3% monthly and 2.6% annually, both exceeding forecasts.

Wholesale inflation also surprised higher. Producer Price Index (PPI) rose 1.3%, more than twice expectations, while annual PPI climbed from 5.6% to 6.3%. Core PPI increased 0.7% monthly, also above forecasts.

The Fed raised its benchmark rate 25 basis points in September, with most officials anticipating another hike by year-end. The Federal Funds Rate is the overnight borrowing rate for banks, not mortgage rates.

Two meetings remain—October 27–28 and December 8–9. Fed Chair Kevin Warsh indicated the economy has largely performed as expected since September, without directly addressing the latest inflation figures. Markets interpreted his remarks as suggesting a possible October pause.

Existing Home Sales Post Modest Gain

Existing home sales rose 1.5% in September, ending a three-month decline, but remained 2.2% below last year at an annual pace of 3.99 million homes.

Inventory increased 1.9% monthly and 4.6% annually. NAR Chief Economist Lawrence Yun noted August and September were the slowest sales months this year, while growing inventory and longer selling times have improved buyers' negotiating power.

Quick Look: Consumer Spending and Unemployment

Retail sales rose 0.8% in September, more than double expectations, partly due to higher gasoline prices. Excluding gas, sales increased just 0.2%.

Initial unemployment claims remained low at approximately 199,000, although gig and freelance work may mask some job losses. Continuing claims remained near 1.71 million, with recent declines potentially reflecting expiring benefits rather than new employment.

Family Hack of the Week

Celebrate National Apple Month with these Apple Muffins from Allrecipes. Makes 6 large muffins.

Preheat oven to 425°F. Combine 1¾ cups flour, ¾ cup sugar, 2 teaspoons baking powder, 1 teaspoon cinnamon, and ½ teaspoon salt. Add 1 egg, ⅓ cup vegetable oil, and ⅓ cup milk. Fold in 2 peeled, chopped medium apples. Divide ½ cup batter into each prepared muffin cup.

For the topping, combine ½ cup sugar, ½ cup flour, ⅓ cup cubed butter, and 1½ teaspoons cinnamon until crumbly. Sprinkle over muffins.

Bake 5 minutes at 425°F, then reduce to 350°F and bake another 25–30 minutes until a toothpick comes out clean. Cool briefly before transferring to a rack.

What to Watch Ahead

Monday: NAHB Home Builder Confidence. Tuesday: Housing Starts, Building Permits, and Pending Home Sales. Thursday: Weekly Jobless Claims.

Source: MBSHighway