Home Purchase Loans

If there's one housing market metric that paints a brighter picture than the rest, it's New Home Sales data from the Census Bureau. At 745,000, it eased slightly from an upwardly-revised annual rate of 758,000 , but was higher then the pre-revision reading of 737k, and 3.8% above December 2024’s 718,000. Fairly chunky revisions are par for the course with this data. The chart below shows pre-revision numbers (thus the slight uptick with the current release). For-sale inventory fell to 472,000 , down 2.7% from November and 3.5% lower than a year ago. At the current sales pace, that represents a 7.6-month supply , slightly below November’s 7.7 months and down from 8.2 months in December 2024. While supply remains elevated compared to the tightest periods of the past cycle, it continues to trend lower as sales hold firm. Prices moved higher on a monthly basis but showed mixed signals year-over-year. The median sales price rose to $414,400 (+4.2% MoM; -2.0% YoY), while the average price edged up to $532,600 (+0.5% MoM; +4.7% YoY). The divergence suggests a continued tilt toward higher-end transactions lifting the average. 2025 Total Sales: 679,000 (down 1.1% from 2024’s 686,000) Inventory (YoY): -3.5% Months’ Supply (YoY): -7.3% Prior Month Context: November sales were up 15.5% from October’s revised 656,000

The National Association of Realtors’ Pending Home Sales Index (PHSI) slipped modestly in January, easily prolonging its stay in a narrow range near all-time lows. Pending home sales decreased 0.8% month over month and were down 0.4% compared with the same time last year. While affordability conditions have improved somewhat as mortgage rates trend closer to 6%, the improvement has failed to bolster contract activity. NAR Chief Economist Lawrence Yun noted that lower rates have expanded the pool of mortgage-eligible households, potentially adding hundreds of thousands of new buyers this year. However, he cautioned that without a meaningful increase in housing supply, additional demand could simply push prices higher and renew affordability pressure. The Midwest and West posted monthly gains, while the Northeast and South declined. On a yearly basis however, the picture changes, with the South and West slightly positive and the Northeast and Midwest down from a year ago—reinforcing the fact that sales activity remains uneven and regional. Regional Breakdown (Month-Over-Month) Northeast: −5.7% Midwest: +5.0% South: −4.5% West: +4.3% Regional YoY Change Northeast: −8.3% Midwest: −3.3% South: +4.0% West: +0.3%

What goes down must come up? Definitely not always the case, but true this time for residential construction numbers. The Census Bureau’s latest report showed a rebound in December, with both housing starts and building permits moving higher after softer readings in prior months. Privately owned housing starts rose 6.2% to a seasonally adjusted annual rate of 1.404 million , up from November’s revised 1.322 million pace. Despite the monthly gain, starts were 7.3% lower than December 2024 levels. Single-family starts increased 4.1% to 981k, while multifamily starts (buildings with five units or more) came in at 402k. On the permitting side, activity also strengthened. Total building permits climbed 4.3% to an annual rate of 1.448 million , though that figure remains 2.2% below year-ago levels. Single-family permits slipped 1.7% to 881k, while multifamily authorizations rose to 515k, driving the overall monthly increase. For the full year, an estimated 1.36 million housing units were started in 2025, down 0.6% from 2024. Permits totaled approximately 1.43 million , representing a 3.6% annual decline. The year-end data suggest a construction sector that regained some footing in December but remained modestly below last year’s pace overall.

Mortgage application activity picked up last week with the Mortgage Bankers Association (MBA) reporting an increase of 2.8% on a seasonally adjusted basis for the week ending February 13. Refi applications were in the driver's seat, and although it was hardly a "jump", the Refinance Index did increase 7% from the previous week and was 132% higher than the same week one year ago. marking the strongest week for refinance activity since mid-January. This also keeps refi demand in the highest range seen since early 2022. Purchase demand moved in the opposite direction, falling 3% versus the previous week. Notably, VA purchase applications bucked the broader trend, rising 4% for the week. Joel Kan, MBA’s Vice President and Deputy Chief Economist, attributed the pickup in overall activity to the lowest mortgage rates in four weeks.  The composition of activity shifted modestly. The refinance share of total applications increased to 57.4% from 56.4% the prior week, while ARM share ticked up to 8.2% . FHA share held steady at 18.4%, VA share rose to 16.5% , and USDA share remained unchanged at 0.4%. Mortgage Rate Summary: 30yr Fixed: 6.17% (from 6.21%) | Points: 0.56 (unchanged) 15yr Fixed: 5.50% (from 5.65%) | Points: 0.73 (from 0.68) Jumbo 30yr: 6.21% (from 6.30%) | Points: 0.27 (from 0.34) FHA: 5.99% (from 6.01%) | Points: 0.65 (from 0.68) 5/1 ARM: 5.29% (from 5.33%) | Points: 0.62 (from 0.67)

Builder confidence fell for the second straight month in February according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). Affordability pressures and elevated construction costs continued to hamper already gloomy sentiment. While the move was modest in outright terms (just one point lower than before), it reinforces the broader malaise seen over the past several years.  The underlying components were mixed but leaned negative. The index measuring current sales conditions held steady at 41 , while the gauge tracking prospective buyer traffic declined two points to 22 , remaining firmly in “low to very low” territory. Most notably, future sales expectations dropped three points to 46 , extending their move below the breakeven level of 50. “Builders reduced their expectations for future sales as buyers report affordability challenges, which is contributing to declining consumer confidence for the overall economy,” said NAHB Chairman Buddy Hughes. He added that while most builders continue to offer buyer incentives — including price reductions — many prospective buyers remain on the sidelines. At the same time, remodeling activity has remained comparatively resilient due to limited household mobility. NAHB Chief Economist Robert Dietz noted that affordability remains a central obstacle early in 2026, arguing that meaningful improvement will require policies aimed at bending the construction cost curve and expanding attainable housing supply. On a more constructive note, he pointed to easing inflation as a potential pathway to lower interest rates for both mortgages and builder financing.

Existing-home sales pulled back sharply in January, quickly dashing any hopes that December’s year-end rebound brought, as harsh winter weather and still-tight supply conditions weighed on activity. Sales fell 8.4% to a seasonally adjusted annual rate of 3.91 million, the lowest levels since November 2024. According to the National Association of Realtors (NAR), transactions were also 4.4% lower than the same time last year, with every region posting both month-over-month and year-over-year declines. “The decrease in sales is disappointing,” said NAR Chief Economist Lawrence Yun. Perhaps an understatement, especially after the strong showing last month. He added that affordability is nevertheless improving, with wage gains outpacing price growth and mortgage rates running lower than a year ago, though supply remains limited. Inventory dipped slightly from December but stayed above year-ago levels. Total housing inventory registered at 1.22 million units, down 0.8% from the prior month and up 3.4% from January 2025. The months’ supply of unsold homes increased to 3.7 months, up from 3.5 months in December. Price pressures persisted. The median existing-home price for all housing types rose to $396,800, up 0.9% from a year earlier and marking the 31st consecutive month of annual gains. Yun noted that homeowners continue to build substantial equity, estimating that the typical owner has accumulated more than $130,000 in housing wealth since early 2020.

Mortgage application activity was essentially flat last week, almost impressively so. After much recent volatility, the index is finding a brief moment of stability, and borrowers seem content continue to weigh affordability challenges and wait for clearer movement in rates. The Mortgage Bankers Association (MBA) reported that applications decreased 0.3% (seasonally adjusted) for the week ending February 6, while rising 2% on an unadjusted basis. Purchase demand softened modestly. The seasonally adjusted Purchase Index slipped 2% from the prior week, while unadjusted purchase applications increased 4% and were 4% higher than the same week one year ago. Refinance activity posted a small gain. The Refinance Index rose 1% from the previous week and remained 101% higher than a year earlier. Joel Kan, MBA’s Vice President and Deputy Chief Economist, described the week as a mixed bag across loan types. While the 30-year fixed rate held steady at 6.21%, conventional applications declined for both purchases and refinances as some borrowers wait for a more meaningful drop in rates or migrate toward other loan types and products. And they appear to be doing just that, as FHA and ARM products saw an increase in apps last week. Kan noted that FHA purchase and refinance applications increased, supported in part by FHA rates that remained roughly 20 basis points below the conforming 30-year fixed rate. He added that borrowers are increasingly turning to FHA loans as affordability pressures persist. At the same time, the ARM share climbed to a seven-week high, with ARM rates running nearly a full percentage point below comparable fixed rates.

Mortgage application activity moved lower again last week, extending the pullback from January’s earlier burst of demand as weather disruptions and softening purchase activity weighed on overall volume. The Mortgage Bankers Association (MBA) reported that applications declined 8.9% for the week ending January 30. The Market Composite Index fell 8.9% on a seasonally adjusted basis, while rising 4% on an unadjusted basis, highlighting the continued volatility in weekly application data following a period of unusually strong activity earlier in the month. This week, purchase activity took center stage and drove much of the weakness. The seasonally adjusted Purchase Index dropped 14% from the prior week, while unadjusted purchase applications increased 2% but were only 4% higher than the same week one year ago—lowest levels since November 2025 and the weakest annual increase since April 2025. Joel Kan, MBA’s Vice President and Deputy Chief Economist, pointed to Winter Storm Fern as a key factor, noting that widespread snowfall likely hampered homebuying activity across large parts of the country. Refinance volume also declined, though by a smaller margin. The Refinance Index fell 5% from the previous week but remained 117% higher than a year earlier. Despite mortgage rates edging modestly lower, Kan noted that the change was not significant enough to materially boost refinance demand.

Both the FHFA and the S&P/Cotality Case-Shiller home price indices released November data this week, and the combined message is that home price appreciation continues doing better than it had been in the middle of 2025. FHFA’s seasonally adjusted House Price Index paints clearest picture with seasonally adjusted home prices up 0.6% month-over-month in November and 1.9% year-over-year .  This is the 2nd month in a row with price appreciation at the highest levels in more than a year. Both data sets highlight regional differences. Monthly price changes ranged from flat in the Middle Atlantic to +1.1% in the East South Central division. Over the past year, prices declined 0.4% in the Pacific division but climbed as much as 5.1% in the East North Central region—broadly echoing Case-Shiller’s Midwest-versus-Sun-Belt divide. The Case-Shiller U.S. National Home Price Index posted a 1.4% year-over-year gain in November, unchanged from October. While this is one of the lowest readings of the past several years, it's also one of the first time the index moved higher from the previous month in more than a year.   On a month-to-month basis, the seasonally adjusted index rose 0.4% . The 20-City Composite posted a 1.4% annual gain , up slightly from 1.3% previously, and increased 0.5% month-over-month after seasonal adjustment.

Mortgage application activity retreated a bit last week following two weeks of unusually strong volume, although holiday timing played a meaningful role in the weekly comparison. The Mortgage Bankers Association (MBA) reported that applications fell 8.5% for the week ending January 23, giving back a portion of the recent surge. The Market Composite Index declined 8.5% on a seasonally adjusted basis and was down 16% on an unadjusted basis, reflecting both the Martin Luther King Jr. Day holiday adjustment and a market that has shown wide week-to-week swings after extended periods of low activity. Refinance volume saw the largest pullback. The Refinance Index declined 16% from the prior week, though applications remained 156% higher than the same week one year ago. Even with the latest decline, refinance demand continues to run well above last year’s levels following January’s earlier burst of activity. Joel Kan, MBA’s Vice President and Deputy Chief Economist said, “With rates holding in the 6 percent range, the refinance market is likely to remain sensitive to week-to-week rate movements.” Purchase activity was comparatively steady. The seasonally adjusted Purchase Index dipped just 0.4% , while unadjusted purchase applications fell 4% on the week but remained 18% higher than the same period last year—continuing to suggest that buyer engagement has been more stable than refinance demand at the start of 2026.