Weekly Mortgage & Market Update

Week of September 14, 2026 in Review

The Fed raised rates for the first time in three years, while new home construction slowed and pending home sales edged higher.

Fed Hikes Rates in Unanimous Vote

The Federal Reserve unanimously raised the Federal Funds Rate by 25 basis points—its first rate hike in three years and first rate change this year after five consecutive meetings with no change.

The Fed cited elevated inflation, stating that the increase supports a return to its 2% inflation goal. Chair Kevin Warsh reinforced that message, saying, “Inflation is too high and has been for too long.”

The Fed's projections showed 16 of 18 officials expect at least one more quarter-point hike this year. Warsh did not submit a projection.

The Federal Funds Rate is the overnight borrowing rate for banks and is not the same as mortgage rates.

New Home Construction Cools

Housing starts fell 2.6% in August to an annual pace of 1.28 million homes, below expectations. Building permits also declined 2.7% to an annual pace of 1.39 million.

Builder confidence weakened, with the NAHB Housing Market Index falling three points in September to 32. A reading below 50 means more builders view conditions as poor than good. Higher mortgage rates, labor shortages, and construction costs continue to weigh on confidence.

Household formations were running at an annual pace of approximately 1.4 million as of June 30, roughly in line with or slightly above the current pace of new housing supply. If mortgage rates decline and demand strengthens, limited new construction could continue to support home prices.

Pending Home Sales Tick Higher

Pending home sales, which measure signed contracts on existing homes, rose 0.3% from July to August but remained 4.7% below a year ago. All four U.S. regions posted annual declines.

Higher mortgage rates continue to weigh on activity, although NAR Chief Economist Lawrence Yun noted that buyers still “steadily entered into contracts” during August.

Quick Look: Spending and Unemployment

Retail sales rose 1.2% in August, beating expectations. Higher gas prices contributed, but gains were broad-based, with 12 of 13 retail categories increasing. Back-to-school shopping likely provided an additional boost.

Initial unemployment claims remain relatively low at approximately 196,000, although gig or freelance work may keep some displaced workers from filing. Continuing claims remain elevated at 1.73 million, suggesting some job seekers are taking longer to find employment.

Family Hack of the Week

Celebrate National Pecan Cookie Day on September 21 with these Chocolate Chip Pecan Cookies. Makes about 2 dozen.

Beat 1 stick room-temperature unsalted butter with ⅓ cup brown sugar and ⅓ cup granulated sugar until fluffy. Add 1 teaspoon vanilla and 1 egg.

Combine 1¼ cups flour, ½ teaspoon baking soda, and ½ teaspoon salt. Add to the butter mixture, then stir in 1 cup milk chocolate chips and ½ cup chopped pecans.

Form rounded tablespoons of dough into balls, place 2 inches apart on parchment-lined baking sheets, and refrigerate for 30 minutes. Bake at 350°F for 12 to 15 minutes. Cool on the baking sheets for 10 minutes before transferring to racks.

What to Watch Ahead

It's a quieter week for economic data, with New Home Sales and weekly Jobless Claims due Thursday.

Source: MBSHighway