September CPI Climbs to 3.7% as MBA's 30-Year Hits 7.5%

The Bureau of Labor Statistics said Wednesday that the Consumer Price Index for All Urban Consumers rose 0.6% seasonally adjusted in September after a 0.4% gain in August. Over the 12 months ending September, the all-items index increased 3.7%, up from 3.4% for the 12 months ending August (WSJ; Quartz).

Gasoline rose 9.1% in September and accounted for more than half of the monthly all-items increase. The energy index rose 5.2% over the month and 20.4% over the year. Shelter rose 0.4% in September after 0.3% in August. Food was unchanged over the month.

Core CPI (all items less food and energy) rose 0.3% in September, matching August’s gain, and was up 2.6% over the year after 2.4% through August. Economists had expected roughly 3.6% year-over-year headline inflation and a softer 0.2% monthly core reading (Reuters via Financial Newsletter).

In a separate release, the Mortgage Bankers Association said applications fell 2.7% seasonally adjusted in the week ending Oct. 9. The average conforming 30-year contract rate increased to 7.5% from 7.49%—the highest since November 2023, per MBA’s Joel Kan (HousingWire).

A hotter CPI print with core still rising at 0.3% month over month keeps inflation, not just energy, in the Fed’s frame two weeks before the Oct. 27–28 FOMC meeting. That does not decide the outcome; it raises the cost of floating rate risk into the decision.

Treasury yields jumped after the release. Early market quotes put the 10-year near 5.30%, about 9 basis points higher on the session, after Tuesday’s official close of 5.21% (Quartz; Treasury). Mortgage pricing that had drifted lower early in the week faces a harder tape if those yields stick.

MBA’s applications drop and 7.5% contract rate confirm what lock desks already felt: last week’s rate backup cut purchase volume (purchase index −4%) even as borrowers leaned harder on ARMs (ARM share 10.5%, highest since October 2025).

Thursday, Oct. 15: Freddie Mac Primary Mortgage Market Survey (next weekly averages)

Thursday, Oct. 15: September PPI and retail sales (MarketWatch calendar; secondary to CPI for rate sheets)

FOMC meeting Oct. 27–28 (Federal Reserve calendar)

October CPI scheduled for Tuesday, Nov. 10 (BLS)

10-year: 5.21% on Tue, Oct. 13, down from 5.24% on Fri, Oct. 9. The recent high close in this window was 5.31% on Mon, Oct. 5.

2-year: 4.79% on Oct. 13, down from 4.80% on Oct. 9.

30-year: 5.56% on Oct. 13, down from 5.60% on Oct. 9.

Mortgage News Daily daily index (Tue, Oct. 13 close): 30-year fixed 7.46%; 15-year fixed 7.14%; 30-year jumbo 7.62%; 30-year FHA 7.13%. MND said Tuesday’s print was another two-week low into CPI; Wednesday morning commentary flagged weaker MBS after the inflation print, which typically points to higher mortgage rates on the day.

MortgageResearch (purchase rates labeled for Oct. 13): 30-year fixed 7.39% (−0.07 from the prior day), 15-year 6.58%, 30-year FHA 6.87%, 30-year jumbo 7.6%. Those are lender-marketplace style averages, not Freddie Mac or MBA survey readings—do not mix them with PMMS.

Freddie Mac PMMS (as of Oct. 8): 30-year 7.40%, 15-year 6.73%. Next release Thursday, Oct. 15 (Freddie Mac).

MBA (week ending Oct. 9): conforming 30-year contract rate 7.5% (points 0.83); jumbo 30-year 7.49%; FHA 30-year 7.19%; 15-year fixed 6.87%; 5/1 ARM 6.54% (MBA).

Applications: MBA Market Composite −2.7% seasonally adjusted (week ending Oct. 9). Purchase index −4%; refinance index −0.4% and still 56% below a year earlier. Refinance share 37.7%; ARM share 10.5%.

Existing sales (context from Tuesday): NAR’s September SAAR was 3.99 million (+1.5% month over month, −2.2% year over year) with 1.60 million homes for sale. That print closed against a softer September rate backdrop than this week’s MBA and Freddie surveys.

Affordability pressure: Joel Kan said the 7.5% 30-year is more than a percentage point above a year ago and that borrowers continue to use ARMs to lower initial payments. Purchase volume remains the soft spot for originators until rate sheets ease or prices adjust.

Fed path into Oct. 28: The FOMC’s current target range is 3.75%–4.00% after the Sept. 16 hike. Wednesday’s CPI does not lock in another move. Markets are reassessing October versus December odds after the hot print; treat any single probability screen as provisional until the official close and more Fed speak.

MBA Affordability in Action: MBA released a Housing Affordability Policy Roadmap aimed at lowering the cost of owning and renting through regulatory and process reforms rather than looser credit. The campaign was highlighted at MBA’s Annual Convention this week (Broeksmit remarks).

2027 conforming loan limits are still not official. FHFA’s 2026 one-unit baseline remains $832,750 (same balance MBA used in this week’s survey). FHFA typically announces the next year’s limits in late November.

Post-CPI Treasury and MBS follow-through after the initial yield spike

Lender rate-sheet revisions versus sticky mortgage-Treasury spreads

Thursday, Oct. 15: Freddie Mac PMMS; September PPI and retail sales

FOMC meeting Oct. 27–28