Weekly Economic Recap: 10.5- 10.9 2026

Weekly Economic Recap: October 5 – October 9, 2026

Mortgage rates climbed to their highest level since late 2023 and buyers kept pulling back, even as jobless claims stayed near multi-decade lows.

Housing

MBA 30-Year Mortgage Rate: The average 30-year fixed rate rose 19 basis points to 7.49% in the week ended October 2, its seventh straight weekly increase and the highest level since late November 2023. Rates are up 140 basis points since the US-Israeli strikes on Iran began in late February, as 10- and 30-year Treasury yields hit their highest levels since 2002 amid energy-driven inflation and expectations of more Fed hikes.

30-Year Mortgage Rate: The 30-year fixed rate averaged 7.4% as of October 8, up from 7.28% last week and the highest since November 2023. A year earlier it was 6.3%. The 15-year fixed rate climbed to 6.73% from 6.6%, its highest since May 2024.

Mortgage Applications: Applications fell 4.2% in the week ending October 2, the fifth straight weekly decline and the lowest level since January 2025. Refinancing dropped 7.5% and purchase applications fell 2.1%. Long-term yields kept rising despite Treasury efforts to calm them through more bill issuance and expanded buybacks.

Growth and Inflation

Consumer Inflation Expectations: Median year-ahead inflation expectations rose 0.3 percentage point to 3.9% in September, the highest since May 2023. Expected price increases climbed across key categories, including gasoline at 4.6%, food at 5.3%, medical care at 9.1%, college tuition at 6.1% and rent at 6.6%. The three-year outlook edged up to 3.3% and the five-year outlook was unchanged at 3.0%.

FOMC Minutes: Minutes of the September 15-16 meeting show all policymakers backed a 25 basis point hike to 3.75%-4%, and most judged that another increase would likely be appropriate by year-end. They stressed that future decisions depend on incoming data, and almost all saw inflation risks tilted to the upside.

Michigan Consumer Sentiment: The preliminary October reading fell to 46.3, its lowest since May's record low and below the 47.6 expected. The current conditions subindex hit an all-time low of 44.7 as high prices and borrowing costs hurt buying conditions for durable goods. Year-ahead inflation expectations edged up to 4.7% and long-run expectations rose to 3.5%.

Imports and Exports: US imports jumped $17.2 billion in August to an all-time high of $420.8 billion, widening the trade deficit to $105.6 billion from a revised $92.8 billion in July. The increase was driven mainly by industrial supplies and capital goods. Exports rose $4.5 billion to $315.2 billion.

Labor Market

ADP Employment Change Weekly: Private-sector employment rose by about 23.75 thousand jobs in the week ending September 19, the strongest weekly increase in three months, following an upwardly revised 22.5 thousand the week before.

Initial Jobless Claims: Initial claims fell by 2,000 to 197,000 in the week ending October 3, beating the 200,000 forecast and sitting near the 60-year low of 189,000 set in mid-July.

Continuing Jobless Claims: Continuing claims rose to 1.716 million in the week ending September 26 from 1.699 million, slightly above the 1.71 million expected, but still near a more-than-three-year low.

Jobless Claims 4-Week Average: The average fell to 198 thousand from 200.5 thousand the previous week, far below its long-run average of 358.9 thousand.

The Bottom Line

The labor market is holding up and the Fed has signaled it may not be done raising rates, so relief on mortgage rates doesn't look close. Buyers should get pre-approved early and focus on the monthly payment rather than the headline price. Sellers and investors should price realistically and underwrite deals with today's financing costs, not last year's.