October 12, 2026 Economic and Housing Market Outlook

• Wednesday, October 14 September Luxury Report – Best School Metros
• Thursday, October 15 September Rent Report
• Thursday, October 15 Weekly Housing Data
  

Recent Indicators

Housing data for download:

Video Script:

• Introduction:

  • If you’re looking for an entry-level home and struggling to find one, I’ve got some data that will validate your experience and give you some insights on which markets will give you your best shot at a starter home.
  • I’m Danielle Hale, Chief Economist at Realtor.com, and this is The Weekly Housing Outlook your guide to the best research and insights on the economy and housing market and what they mean for renters, buyers, sellers, and industry pros.

Featured Report

• • Today’s featured report dives into the starter home segment of the housing market. 
  • In a July report, Senior Economist Hannah Jones noted that the worst of the national starter home crunch was behind us even as the effects of the shortage still linger. And last week Hannah examined how this plays out at the local level, finding some distinct regional patterns.
  • Southeast and Sunbelt metros have seen the steepest starter-home share losses, led by Columbia, South Carolina, Winston-Salem, North Carolina, and Cape Coral-Fort Myers, Florida.
  •  Out West, Boise, Idaho; Portland, Oregon; and Denver, Colorado have gained the most starter share since 2019. 
  • Finally, the Midwest stands out for its above-average starter share, particularly in Toledo, Ohio which had the largest starter share in 2026 (42.1%) and was also on top in 2019. 
  • Hannah also classifies 8,300 ZIPS into starter-dominant, trade-up-dominant, or mixed categories based on the prevalence of each type of home in the ZIP.
  • In Austin Texas, for example, nearly a third of the market is starter homes, but they can’t be found everywhere. Out of 80 ZIPs examined in Austin, the 12 starter-dominant ZIPs are clustered mostly in the eastern and southeastern parts of the metro. The 24 trade-up dominant ZIPs are concentrated around Lake Travis and West Lake Hills, with the remaining 44 ZIPs featuring a mix of homes.
  • Nationwide, roughly 18% of ZIPs are starter dominant compared with roughly 20% that are trade-up dominant with the remaining 60% more mixed.  If you’re looking for an entry-level home, you’ll find more of them in starter-dominant ZIPs.

• The Week Ahead:

  • Now let’s turn to the week ahead, and the Realtor.com Economics team reports and market indicators to watch out for this week.
    
  • This week features a look at the latest pricing trends in the luxury market from Senior Economist Anthony Smith on Wednesday. 
  • On Thursday, Senior Economist Jiayi Xu will publish our September Rent Report and we’ll see whether the long-running declines in U.S. rents continued. Also on Thursday, Anthony Smith is back with a look at the most recent weekly trends in the housing market.
  • There are a few key metrics to watch this week. On Tuesday we’ll see September existing home sales from the National Association of Realtors. In August, existing-home sales dropped below a pace of 4 million for the first time in 14 months as higher mortgage rates eroded buyer purchasing power. Since then, mortgage rates have risen even higher, so I’m not expecting a strong reading. I expect to see a decline from both August and last September. I’ll also have an eye on prices. Last month’s median home sales price growth was the smallest in 4 months, and in September Realtor.com Senior Economist Jake Krimmel found a rising share of price-cuts among homes listed for sale. 
  • On Wednesday, we’ll see the latest reading on consumer prices. Indications are that headline inflation will continue to come in above both the 2% inflation target and recent wage growth. Despite the expected price uptick, markets are placing only an outside chance of a rate hike at the October Fed meeting, with more investors positioned for a December increase. 
  • Thursday we’ll track Freddie Mac’s mortgage rate data. Last week was another doozy with rates up 12 basis points. The 10-year yield continues to hover between 5.2% and 5.3% which will keep mortgage rates very close to the 7.5% threshold.
  • For buyers who can contend with higher mortgage rates, competition is likely to be even lower in this time of year that’s typically pretty buyer friendly. The national ‘best week to buy’ was a few weeks ago, but last week conditions were prime in 6 metro areas, scattered pretty widely across the U.S. This week, seasonal buying conditions are best in 5 markets spread from coast to coast including sunny San Diego, California; Cincinnati, Ohio; and Baltimore, Maryland. As we move further from the national best week, just 4 markets see top conditions next week, including Birmingham, Cleveland, San Jose, and Seattle. 

The Weekly Review:

• • Now let’s look back at the major updates and research that were released last week.
  • The rapid reset in mortgage rates continued, with mortgage rates rising 12 basis points to 7.4 percent, the highest mortgage rate in nearly 3 years. Senior Economist Joel Berner noted that “A wicked brew of inflation expectations, a broad bond market selloff, and rising fiscal deficits requiring new debt issuance is pushing bond yields higher, and mortgage rates are following.” Joel also joined Anthony Smith to discuss this in our weekly mortgage rate update series. 
  • Mortgage rates are already weighing on transaction activity. Weekly housing data from Realtor.com show that despite steady to lower time on market, active listings were up 6.7% compared to a year ago even as new listings dropped. Asking prices also softened further. 
  • Lest you feel hopeless as a home buyer, Realtor.com Economics has published two recent reports with data-backed insights to help you cope. The first report features data on the range of mortgage rates one should consider when setting a homebuying budget. The second report examines what buyers can do to improve their mortgage rate relative to others no matter what the headline trend is. 
  • In last week’s video Senior Economist Jiayi Xu dug into the Generational Housing Succession report, sharing how the nearly 14 million homes that baby boomers will age out of in the next decade are likely to affect the housing market. 
  • Finally, Senior Economist Joel Berner recently continued his series on what’s in the 21st Century Road to Housing Act and how it will affect the housing market with a look at Small Mortgages. The recently passed housing law aims to encourage mortgages under $100,000 through several innovative tactics. Joel’s research found that small mortgages have become less common over time as home prices and the frictions of originating these loans have grown. Their prevalence really varies across the U.S. but they are an outsized share in states like Iowa where home prices are lower. Of note, small mortgages tend to carry higher mortgage rates. We’ll keep an eye on these loans to see whether the housing law is achieving its intended goal.

Questions from the Mailbag:

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