MARKET UPDATE: 10-26-2026

Housing Headwinds, Safe-Haven Bond Rally

Pending sales and new home construction both stumbled in September, while safe-haven demand boosted bonds. Here’s what you need to know.

  • Pending Home Sales Fall Sharply
  • Homebuilding Loses Momentum
  • France Unrest and AI Debt Concerns Fuel Bond Rally
  • By the Numbers: Jobless Claims
  • Family Hack of the Week
  • What to Watch Ahead

Pending Home Sales Fall Sharply

Pending home sales, which measure signed contracts for existing homes, fell 7.3% from August to September and 11.3% year over year. All four U.S. regions saw declines over both periods.

Bottom line: As National Association of REALTORS® Chief Economist Lawrence Yun put it, “Market conditions weakened in September due to fast-rising mortgage rates,” which may be prompting buyers and sellers to put their plans on hold.

Homebuilding Loses Momentum

New home construction slowed in September, with housing starts falling 5.2% from August to an annual pace of 1.22 million homes, below expectations. Meanwhile, home completions fell 14% year over year to an annual pace of 1.19 million, as builders contend with softer demand and higher costs.

Building permits, a gauge of future construction, also edged down 0.2% from August to an annual pace of 1.4 million.

Builder confidence continues to weaken amid elevated mortgage rates, labor shortages, and rising energy and material costs. The National Association of Home Builders’ Housing Market Index fell three points in October to 29, its lowest level in 14 years. A reading below 50 indicates that more builders view market conditions as poor than good.

Bottom line: High mortgage rates are discouraging some homeowners with pandemic-era low rates from selling, while permitting and construction timelines limit how quickly new homes reach the market. These supply constraints could help support home prices in the months ahead, particularly in markets where housing supply remains limited.

France Unrest and AI Debt Concerns Fuel Bond Rally

One of the week’s key market dynamics has been a flight to safety in the U.S. bond market, driven by unrest in France and growing concerns over AI-related debt. France has seen more than 500,000 protesters, widespread rioting and looting, and curfews. Rising French bond yields have coincided with increased demand for safer assets like U.S. Treasuries.

Meanwhile, concerns are growing over the debt AI infrastructure companies like CoreWeave, Nebius, and Oracle have taken on to fund massive data center expansions. Recent comments from Tesla and Meta about more disciplined spending have added to those worries. If major customers scale back spending, neocloud companies could see slower revenue growth, raising further questions about their ability to repay their debt. Their stocks have come under pressure, adding to demand for the safety of U.S. Treasuries.

Bottom line: While market sentiment continues to shift, safe-haven demand was an important driver of the bond rally this week.

By the Numbers: Jobless Claims

Unemployment claims have told the same story in recent weeks, with initial filings remaining low at around 194,000. But the figures may not tell the whole story: some people who lose their jobs may turn to freelance or gig work rather than apply for unemployment benefits.

Meanwhile, continuing claims rose by 25,000 to 1.73 million. Although they remain below recent highs, the decline doesn’t necessarily mean more people are finding jobs. Some workers may have simply exhausted their benefits.

Family Hack of the Week

These Spiced Pumpkin Raisin Cookies, courtesy of Food Network, are perfect for National Pumpkin Day on October 26 or anytime you’re craving a taste of fall. This recipe makes about 2 dozen cookies. Combine flour, oats, cinnamon, baking soda, salt, and allspice; whisk together raw sugar, canned pumpkin puree, vegetable oil, maple syrup, and vanilla; stir in the dry ingredients and fold in raisins. Drop tablespoon-sized cookies onto parchment-lined baking sheets, flatten into 2-inch rounds, sprinkle with raw sugar, and bake at 350 degrees Fahrenheit for 17 to 20 minutes, until lightly browned and slightly firm to the touch.

What to Watch Ahead

On Tuesday, we’ll get home price appreciation data from Case-Shiller and the FHFA, along with New Home Sales. Thursday brings a fresh look at inflation through the Personal Consumption Expenditures (PCE) index, the first estimate of third-quarter GDP, and the latest jobless claims.

The Federal Reserve’s policy meeting will also be in focus, where the Fed is widely expected to hold its benchmark interest rate steady. The meeting begins Tuesday, with the policy announcement and press conference scheduled for Wednesday afternoon.