More Homes, Softer Demand, and a CPI Test for Rates

FOR THE WEEK OF OCTOBER 12, 2026

QUOTE OF THE WEEK

“Obstacles are those frightful things you see when you take your eyes off your goal.” — Henry Ford, American industrialist and engineer

NATIONAL MARKET UPDATE

Active inventory climbed 6.7% from last year, its fastest growth since February. With more homes available and buyer demand cooling, shoppers have additional choices and potentially greater negotiating power.

Mortgage credit availability tightened in September, making financing more challenging for some borrowers. For Realtors, understanding a buyer’s financing options early can help prevent surprises and keep transactions moving. 

New-home mortgage demand continued to weaken, with applications falling below last year’s levels for another month. Slower demand could encourage builders to offer more incentives to attract buyers, creating opportunities worth exploring.

Sources: Realtor.com, MBA Newslink, Scotsman Guide

REVIEW OF LASTWEEK

MARKETS KEEP CLIMBING…Stocks finished the week higher as investors continued to find support in resilient economic growth and strong corporate earnings. The current bull market reached its fourth anniversary, showing remarkable staying power despite inflation and elevated borrowing costs.

Still, the economy’s resilience has a downside for housing. Higher Treasury yields and persistent inflation are keeping borrowing costs elevated,limiting how much relief buyers can expect even as asking prices soften.

There is also reason for optimism. Corporate profits continue to support economic growth, while the Fed may have room to avoid a more aggressive tightening cycle. A steadier economic outlook could help maintain buyer confidence as the housing market adjusts.

The week ended with the Dow up 0.9%, to 51,655; the S&P 500 up 1.2%, to 7,812; and the Nasdaq up 0.6%, to 27,366.

Housing is entering a more price-sensitive phase. Sellers who price competitively and respond to market feedback may be better positioned to attract serious buyers, particularly as inventory continues to build.

DID YOU KNOW…New listings fell 4.1% from last year even as total inventory increased 6.7%. That means more homes are accumulating on the market because fewer are going under contract—not because sellers are flooding the market with new listings.

THIS WEEK’S FORECAST

INFLATION TAKES CENTER STAGE…Wednesday’s CPI report could be the biggest influence on mortgage rates this week. Inflation is expected to remain elevated, partly because of higher energy prices, while Thursday brings additional inflation data and retail sales figures. A stronger-than-expected inflation reading could push Treasury yields higher and put additional pressure on borrowing costs.Softer numbers could provide some welcome stability. For Realtors, the key is whether financing conditions can settle enough for buyers to take advantage of growing inventory and more competitive home prices.

FEDERAL RESERVE WATCH

Forecasting Federal Reserve policy changes in coming months. The Fed appears increasingly likely to hold rates steady at its October 27–28 meeting, following weaker employment data and signs of moderating underlying inflation. Note: In the lower chart, the 19.4% probability of change means there’s an 80.6% 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 19.4%

Dec 9th 71.1%

Jan 27th 47.0%

BUSINESS TIP OF THE WEEK

Make pricing conversations about competition, not just price. Before recommending a listing price, show sellers the homes buyers will be comparing against theirs. Understanding the competition before going live can prevent costly price reductions and unnecessary time on the market.

Want to know what this market means for you?

Rising inventory, shifting rates, and tighter credit all change the math on your next move. Whether you’re buying, selling, or thinking about a refinance, the best time to look at your numbers is before you need to act.

Let’s get on a Mortgage Strategy Call. We’ll review current market conditions, your buying power, and your refinance options, then build a plan that fits your goals.

👉 [Schedule your Mortgage Strategy Call]

and let’s plan your next move.

Kevin Brierton | Your No Excuse Lender | NMLS #599873