Mortgage Rates and the price of Mortgaged-Backed Securities (MBS) moved sideways again this week. The steady upward pattern points to slow improvements in mortgage rates. Rates are down approximately 0..875% from this time last year.
Inflation – the Producer Price Index showed headline inflation rose 0.5, slightly higher than expectations. Year over year in declined from 3% to 2.9%. The Core rate, which strips out food and energy, rose 0.8% bringing the year over year figure up to 3.6%
Rents – Apartment List released their Rent Report which showed new rents are down 1.5% on a year over year basis. Currently the list to lease time is reporting at 40 days (the highest since they started tracking in 2017) and the vacancy rate is at 7.4%. While new rents are down 1.5% rent renewals are up 3%, when blended that figure is closer to a 0.9% overall increase in rents.
Appreciation – the Case-Shiller Home Price Index, considered the ‘gold standard for appreciation, showed that home prices rose 0.4% in December, which was similar to both October and November. Year over year home prices were up 1.3% in December which was a slight tick down from 1.4% reading in November.
Forecasts – Fanniemae and Pulsenomics released their joint Home Price Expectation Survey which asks the top 150 economists in the US what their thoughts are on home price appreciation. The median forecast for 2026 is 2.15, and 15% over the next 5 years. That means if you purchased a $500,000 home you would expect that value to increase to $575,000 over a 5 year span.
Mortgage Applications – to purchase homes are up 12% year over year and refinance applications are up 150%. Refinance inquiries made up 59% of total applications last week.