October 26, 2026 Economic and Housing Market Outlook

• Tuesday, October 27: 2026Q3 NYC Rent Report 
• Thursday, October 29: 2026Q3 LA Rent Report 
• Thursday, October 29: WSJ/RDC Housing Market Index 
• Thursday, October 29: WSJ/RDC Luxury Housing Market Index 
• Thursday, October 29: Weekly Housing Data 

Recent Reports:

Recent Indicators:

Housing data for download:

Video Script:

• Introduction:

  • Have you ever thought about moving your home? Not moving to a new home, literally placing your home on a trailer and taking it elsewhere. It’s not something most people do, but it is something that federal law required manufactured homes to be prepared for until this summer. Today I’ll explain what changed and what it could mean for starter homes.
  • 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 feature is a new report from Senior Economist Joel Berner on manufactured housing and the role it could play in easing the starter home crunch.
  • As I discussed in this series a few weeks ago, starter homes make up a smaller share of homes for sale than they did before the pandemic, their prices have climbed, and higher mortgage rates are stretching entry-level budgets even further.
  • The 21st Century ROAD to Housing Act, enacted earlier this year, takes aim at these problems in part by changing how manufactured homes can be built. The law removes a longstanding requirement that HUD-code homes sit on a permanent steel chassis–a metal frame that enables easy transportation of the home. Removal lowers production costs, and just as importantly, lets manufactured homes look much more like site-built homes, because they can be installed without a raised, step-up appearance.
  • Currently, only about 17% of zoned land nationwide expressly allows manufactured home parks, and many places restrict these homes through design standards, minimum size rules, or special permit requirements. A home that looks like its neighbors may face less resistance.
  • Joel also ranked the metros where chassis-free manufactured homes could have the biggest impact, based on land costs, how expensive new site-built homes are, and how few starter homes are on the market. All of the top 10 are in the Northeast or West, led by Hartford, Connecticut, with Denver the only large metro on the list. Some of these areas, like Colorado Springs and Spokane, already allow manufactured homes by right, while others still have zoning rules that could keep them out.
  • As is the case with many of the policy moves in the 21st Century ROAD to Housing Act, the Federal Government has opened the gate, but it’s up to localities to follow-through in order for the law to really have an impact.

• 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.
  • In addition to today’s Manufactured Housing report from Senior Economist Joel Berner, Realtor.com Economics will publish a pair of city-level rental market reports in which Senior Economist Jiayi Xu will detail the latest trends in New York on Tuesday and Los Angeles on Thursday. Also on Thursday, Senior Economist Hannah Jones publishes her analysis of the markets topping the Fall Wall Street Journal/Realtor.com Housing Market ranking and Senior Economist Anthony Smith digs into the luxury cut of that data. Additionally, Jiayi is back with a report on the weekly trends in housing data.
  • There are a good number of housing-related economic data points to watch this week including the S&P Cotality Case Shiller Home Price Index and New Home Sales on Tuesday, the FOMC statement and the Housing Vacancy Survey on Wednesday, and Freddie Mac’s mortgage rate data on Thursday. 
  • The Case-Shiller index tracks repeat sales of the same homes over time, which makes it a reliable yet backward-looking read on trends. Since it reflects sales that closed a few months ago, I expect it to show meager home price growth, consistent with the easing we saw in the median existing-home sales price trends at that time. I also expect the regional divergence to continue, with markets in the Midwest and Northeast posting the strongest gains. 
  • New Home Sales are likely to be soft. Rising mortgage rates pushed pending home sales to a record low in September, and builders are leaning on price cuts and incentives to keep new homes moving.
  • The Fed’s Open Market Committee or FOMC is widely expected to hold rates steady on Wednesday, even as inflation pressures linger. The Fed is balancing an ongoing oil supply shock with a domestic economy that’s being reshaped by the AI buildout, even as questions about the return on those investments are jostling equity markets.
  • The Housing Vacancy Survey gives us a quarterly look at homeownership and vacancy rates. The third quarter saw mortgage rate headwinds which could soften homeownership, but we also saw reported increases in sales to first-time homebuyers which could have the opposite effect. If the homeownership rate dips, it would be the lowest reading since before the pandemic. Rental vacancy seems to be leveling off, and is likely to steady or drop as tougher buying conditions keep more households renting. Homeowner vacancy has been inching higher, and that trend could continue as inventory builds and sales remain sluggish.
  • Finally, Freddie Mac’s mortgage rate data could bring further good news. As I noted last week, the 10-year Treasury yield has been easing, and mortgage rates have followed. The drop accelerated late last week, which could mean more rate relief ahead.
  • This relief is coming late in the ‘best time to buy’ season. While the national week was in early October, but last week conditions were prime in 4 markets. This week is the last major week of the best time to buy season when 8 markets see optimal conditions. An additional 8 markets, mostly in warmer areas, see peak conditions ahead over the next few weeks. 

The Weekly Review:

• • Now let’s look back at the major updates and research that were released last week.
  • Last week I anticipated a weaker reading for pending home sales, and, unfortunately, September’s data delivered. 
  • Pending home sales data from the National Association of Realtors showed contract signings falling to the lowest level on record in September. Pending sales dropped 7.3% from August and 11.3% from a year earlier as mortgage rates climbed past 7% for the first time since January 2025. Conditions are finally tilting toward buyers, with asking prices down for an 11th straight month, more price cuts, and growing inventory. But with rates at their highest level in nearly 3 years, many households can’t take advantage. 
  • The pullback reached every corner of the country. All four regions posted declines from both the prior month and the prior year, led by the West, where signings fell 15% from a year ago. Even the strongest markets slowed, with Nashville, Hartford, and San Francisco posting the smallest annual drops. 
  • New construction also took a step backward in September. Housing starts fell 5.2% from August and 7.4% from a year earlier, and completions were down 14% from last year as high mortgage rates kept buyer demand muted. Senior Economist Joel Berner noted that permits held up better, slipping just 0.2% from August, a sign that builders may still see today’s conditions as temporary. That strength came from multifamily, where permits for larger projects rose 5.9% from August, while single-family permits fell 5% after increasing in the prior 2 months.
  • One data bright spot was in mortgage rates. According to Freddie Mac, the average 30-year fixed mortgage rate dropped for the first time in two months to 7.32% as the 10-year yield dropped below its recent range. Senior Economist Jake Krimmel warns that while this is welcome news, we shouldn’t get carried away given the still-elevated position. Another way to put it: the drop is not so much a tailwind as it is a diminished headwind.
  • This is evident in weekly housing data which suggested that both buyers and sellers are disengaging. New listings dropped more than 5% compared to this time last year as asking prices continue to lag by about 2%. Even as new listings decline, the number of active listings is rising, suggesting that we’re not seeing sales growth. As he discussed the implications of the data, Joel Berner noted that it creates an opportunity for cash- or equity-rich buyers.
  • Investors are more likely than other buyers to lean on cash. In her latest Investor Report, Senior Economist Hannah Jones found that more than half of investor purchases were paid all-cash in the first half of the year, compared with 30% across the overall market. Despite the advantages of cash buyers in this market, the investor cash share is down from its 2021 peak. Some of this is due to the shift in who is buying: small investors accounted for about two-thirds of all investor purchases, the highest share in at least 15 years, while large and mega investors sold more homes than they bought.
  • Investors are still buying homes, but have pulled back, keeping their share roughly in line with recent years at 10.7% of all home purchases. Investor activity remains concentrated in affordable Midwest and Sun Belt metros. In Memphis, St. Louis, and Kansas City, investors bought roughly 1 in 5 homes sold, nearly double the national share. 
  • Hannah also examined outstanding mortgage debt finding that the slow unlock of the housing market continued even as the pace slowed in the second quarter. Mortgages with a rate of 6% or higher now make up 22.5% of all outstanding loans, but this was the smallest annual jump in 3 years. Nearly half of outstanding loans still carry a rate under 4%, and roughly 78% are below 6%. With rates expected to stay above 6%, Hannah estimates that the unlock will continue, but not disappear: the 6%-plus share could reach 27% to 28% by mid-2027, the highest in more than a decade. 
  • Finally, in our latest Luxury Market Showdown, Senior Economist Anthony Smith compared two outdoor lovers’ dreams: Denver, Colorado, and Portland, Oregon. Luxury now starts near $1.25 million in both metros, but as recently as 4 years ago, Denver still commanded a bigger entry-luxury premium. At the ultra luxury tier, Denver still holds the lead, with its top 1% of listings starting at about $4.1 million, 18% above Portland’s top 1%. 

Questions from the Mailbag:

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