October 13, 2026 – Inflation in Focus

Economic Commentary

It is mid-month and  we are two weeks away from the next meeting of the Federal Reserve’s Open Market Committee. The September jobs report has been released as we reported in our last commentary.  This week will feature two inflation reports – the consumer and producer price indices (CPI & PPI). The markets believe that the Fed considers the Personal Consumption Expenditures Price Index (PCE) a better gauge of inflation. The August PCE Price Index was released the last week in September and showed inflation to be in line with forecasts but still higher than the Fed’s target.  However, the next PCE release will be two days after the Fed meeting and thus the most recent inflation data will be contained in this week’s releases.

Based upon the rhetoric coming from speeches from several Fed Governors in the past few weeks, the trend seems to be toward another rate increase.  These speeches are interesting to note because the new Chairman of the Fed has been adamant about the Fed providing less forward guidance. Sounds like a disconnect in that regard. There is another factor to consider before the next meeting. The week after Fed meeting there will be a national election.  In the past, the Fed has been reticent to take actions which might affect the elections, though this theory is more applicable within a Presidential election year. Thus, we consider it a much smaller factor as compared to the inflation numbers.

The big factor behind all of this is the specter of the Middle East conflict, or war — as many prefer that term.  The conflict has been quiet from a military standpoint within the past several weeks, however the rhetoric has not. Rhetoric that has ranged from full scale war to coming up with a compromise. In other words, all over the place. There is no doubt that solving this situation would go a long way towards easing inflationary pressures, but from the Fed’s point of view, the inflation caused by the conflict is embedded within our economy and not likely to disappear overnight. By the end of this week, we will see what the latest inflation readings show.  But these readings are not likely to answer all of our questions with regard to the Fed’s thinking two weeks from now.

Weekly Interest Rate Overview

The Markets. Mortgage rates continued their recent climb in the past week, though they eased the day of the release of the Freddie Mac survey. The minutes of the last meeting of the Federal Reserve indicated that one more rate hike is likely this year, but that meeting took place before the weak September jobs report was released. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 7.40% last week from 7.28% the previous week. In addition, 15-year rates increased to 6.73%. A year ago, 30-year fixed rates averaged 6.30%, 1.10% lower than today. Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

Gen Z homebuyers are more willing than other generations to cut back on lifestyle spending to help afford a home, according to research from Cotality, a leading global property information, analytics, and data-enabled solutions provider.  Cotality’s new Consumer Sentiment Report reveals a significant shift in purchasing – primarily driven by affordability concerns.  Cotality found that Gen Z buyers are most willing to cut lifestyle spending at 78% (Millennials are similarly willing at 77%), compared with 69% of Gen X and 50% of Baby Boomers. 74% of Gen Z respondents say they would take a smaller home compared with 64% of Millenials, 57% of Gen X and 43% of Boomers.  “Gen Z buyers have grown up in an environment of elevated housing costs, so they’re entering the market with different expectations,” said Selma Hepp, Chief Economist at Cotality.  “They’re more willing to adjust their budgets, reduce discretionary spending, or consider a smaller home if it means achieving homeownership sooner. That flexibility helps explain why they’re the generation most prepared to move forward despite affordability challenges.”  Sixty-five percent of all respondents say they would seek a smaller mortgage to improve affordability and 69% say they have already cut, or plan to cut, discretionary spending – on shopping, travel and eating out – in pursuit of homeownership. “By playing the waiting game, people eliminate one of the primary paths to wealth building and limit their ability to build financial reserves in an economy weighted down by increasing unaffordability,” said Hepp. “At first glance, renting at $2,000 per month looks cheaper than buying with a $300,000 mortgage,” Hepp continued. “But once you account for principal paydown and the federal tax benefit, ownership becomes roughly cost-neutral at a 6.6%. Over 10 years, the lower-rate ownership scenario produces nearly $24,000 in savings relative to renting, even before considering any home-price appreciation.”  Source: Cotality

Seller impersonation fraud has become more widespread and frequent, and criminals are using increasingly sophisticated tactics to carry out these schemes, a new report from the American Land Title Association found. ALTA’s 2026 Seller Impersonation Fraud study found that 59% of firms reported at least one seller impersonation fraud attempt in the prior calendar year, more than double the 28% reported in the association’s 2024 survey. The share reporting at least one attempt in the month prior to the survey also rose sharply, from 19% to 45%, while the share reporting three or more attempts increased from 4% to 23%. Seller impersonation fraud occurs when a criminal impersonates a property owner to illegally sell commercial or residential property. The findings confirm that seller impersonation fraud is becoming more common, more sophisticated and more difficult to detect. “Criminals are investing time and resources to exploit weaknesses in real estate transactions,” ALTA Chief Strategy, Communications & Innovation Officer Elizabeth Blosser said. The research found that bad actors are expanding both their targets and tactics. Vacant land remains the top target, but vacation homes, rental properties, agricultural land and primary residences all increased as targets. Technology is also changing the fraud playbook. 87% of respondents rated spoofed contact information as at least somewhat common, while 58% said the same of deepfake image or voice technology. When schemes succeed, the financial consequences can be substantial. One in four firms reporting an attempt also reported a paid claim related to seller impersonation fraud. Among firms reporting a claim and disclosing average costs, half reported costs above $100,000. ALTA noted that title professionals are strengthening their defenses. 94% of firms reported using multiple tools they consider helpful for detecting seller impersonation fraud, averaging 5.3 fraud-detection tools per firm.  Source: The Mortgage Bankers Association

Cybercrime within the real estate sector reached unprecedented levels recently, as reported in the 2025 edition of the FBI’s annual IC3 report. The report indicated over 12,000 complaints related to real estate, with total losses amounting to $275 million, an increase from approximately $174 million in 2024 and $145 million in 2023. During the latest Broker Power Hour hosted by the National Association of Realtors (NAR), brokers received valuable advice on how to safeguard themselves against real estate wire fraud attempts, where malicious actors seek to redirect funds from real estate transactions into their own accounts. Tyler Adams, Co-Founder and CEO of CertifID, who spoke at the session, stated that no one is exempt from these threats. He noted that artificial intelligence has transformed the landscape of fraud. “It has empowered fraudsters to carry out attacks on an unprecedented scale,” he said. Adams also stressed the importance of educating clients early in the transaction process about the risks of fraud to mitigate potential losses. New NAR data further revealed what brokers who are members of NAR learned during the complimentary session about enhancing transaction security, recognizing fraud risks, and protecting both their brokerage and clients.  Source: MP Daily