Mortgage Rates improved marginally this week as the price of Mortgaged-Backed Securities (MBS) bounced back from a rough start this week. Oil price inflation uncertainty continues to plague the MBS market. Rates are lower by 1/8% from this time last year.
Pending Sales fell 5.4% last month (due to higher rates in May in June), which broke a four-month streak of gains. Overall home sales remain weak and near historical lows.
Starts and Permits – June housing starts jumped 20%, but this figure comes off a historic low number and was entirely multi-family (which rose 76%). Single family starts declined slightly and are at the lowest level of the year. Single family permits are at their lowest levels since August 2025. Single family supply looks to remain tight which will support prices.
Home Values – Cotality released their home price index for July and it showed that home prices increased 0.6% in May and are up 0.8% year over year. They continue to forecast value increases of 5% over the next 12 months. historically their forecasts lean conservative.
Inflation: the Consumer Price Index for June showed that headline inflation fell 0.4%. Year-over-year inflation slowed from a 4.2% increase to 3.5%. The biggest influence was a 10% drop in gas prices. The core rate, which strips out food and energy, as essentially flat month-over-month, but year-over-year it has decelerated from 2.9% to 2.6%
Mortgage Applications to purchase homes fell 7% and are down 2% year over year. Refinance applications rose 4% last week and are up 7% year over year.