Buyers Gain Leverage as Inventory Climbs and the Fed Slows Down

Inside lending FOR THE WEEK OF October 5, 2026

QUOTE OF THE WEEK

“A year from now you may wish you had started today.” — Karen Lamb, British author & illustrator

NATIONAL MARKET UPDATE

Active inventory climbed 6.3% from last year, the strongest growth in at least six months. September inventory is now just 9.1% below pre-pandemic levels, giving buyers considerably more choice than they’ve had in recent years.

Mortgage demand has weakened as borrowing costs moved higher. MBA reports higher rates have weighed on application activity, showing that affordability is beginning to pull some buyers back to the sidelines.

Home prices are still growing nationally, but the market is becoming more balanced. At the same time, weaker builder confidence and slower new-home mortgage demand suggest sellers and builders may need to compete harder for today’s buyers.

Sources: Realtor.com, MBA Newslink, Scotsman Guide

REVIEW OF LAST WEEK

JOBS CHANGE THE OUTLOOK…Hiring slowed sharply in September, with the economy adding just 29,000 jobs and unemployment edging up to 4.2%. The weaker report reduced expectations for another immediate Fed hike—a potentially positive development for borrowing costs.

Inflation also offered some encouraging news. Core PCE inflation rose 3.0% from last year, while the three-month pace slowed to the Fed’s 2% target for the first time in more than two years. That gives the Fed more flexibility before its October meeting.

Despite softer hiring, the broader economy continues to hold up. Consumer spending remained strong, second-quarter economic growth was revised higher, and manufacturing activity continued expanding, suggesting the slowdown in hiring hasn’t spread across the economy.

The week ended with the Dow down 1.3%, to 51,177; the S&P 500 down 0.3%, to 7,723; and the Nasdaq up 0.5%, to 27,191.

More inventory is creating opportunities for buyers who remain active. Asking prices are 1.4% below last year, while homes are moving two days faster—evidence that well-priced properties can still attract buyers in today’s market.

DID YOU KNOW…More than one in five listings had a price cut in September—the highest share for any month since October 2022. That’s another sign sellers are adjusting to today’s buyers and competing more aggressively for their attention.

THIS WEEK’S FORECAST

FED TAKES CENTER STAGE…After Friday’s weak jobs report, attention shifts back to the Federal Reserve this week. Minutes from the Fed’s September meeting arrive Wednesday and could provide more insight into how policymakers are thinking about another increase. With hiring slowing and recent inflation data showing some improvement, pressure for an immediate move has eased. For housing, a more patient Fed could help calm borrowing costs and give buyers more confidence heading deeper into the fall market.

FEDERAL RESERVE WATCH

Forecasting Federal Reserve policy changes in coming months. The outlook changed significantly after softer inflation and employment data reduced the urgency for another increase. Note: In the lower chart, the 21.6% probability of change means there’s a 78.4% probability the rate will stay the same. Current rate is 3.75%-4.00%. Fed Watch Source

AFTER FOMC MEETING ON: CONSENSUS

Oct 28th 3.75%-4.00%

Dec 9th 4.00%-4.25%

Jan 27th 4.00%-4.25%

Probability of change from current policy:

AFTER FOMC MEETING ON: CONSENSUS

Oct 28th 21.6%

Dec 9th 68.6%

Jan 27th 45.8%

BUSINESS TIP OF THE WEEK

Don’t send every new listing to every buyer. More inventory makes curation more valuable. Sending two homes with a sentence explaining why each fits a client’s priorities can be more useful than sending twenty listings and asking what they think.

Ready to Plan Your Next Move?

Inventory is growing, sellers are cutting prices, and the Fed is easing off the gas. Buyers have more leverage than they’ve had in a while, but only if they know what they can afford and how to use it.

That’s what a Mortgage Strategy Call is for. In about 20 minutes, we’ll look at current market conditions, your buying power, or whether a refinance makes sense, and map out a plan that fits your goals. No pressure, no fluff, just a clear next step.

👉 Schedule your Mortgage Strategy Call

Your No Excuse Lender

Kevin Brierton | Branch Manager, Certified Liability Specialist | NMLS #599873