Monday August 18, 2025

Mortgage Rates:Rates eased further, with the 30-year fixed averaging around 6.51%–6.57%, the lowest level since October 2024. The 15-year fixed came in near 5.71%, while the 10-year Treasury yield held steady at 4.24%, helping keep mortgage pricing stable.Demand Trends:On the demand side, mortgage applications jumped almost 11% week over week, a strong sign that buyers and refinancers are responding quickly to lower rates. Refinance activity, in particular, surged to a four-month high, while purchase demand showed modest but notable improvement.Housing Supply and Prices:Existing-home sales for June dipped 2.7% month-over-month, bringing the annualized pace to 3.93 million units. At the same time, prices remain resilient, with the median sales price hitting a record $435,300. The July numbers are due Thursday and will provide a clearer view of whether affordability gains are translating into closed deals.New Construction & Builder Sentiment:Housing starts in June came in at a 1.32 million annualized rate, with single-family starts at 883,000. Builder sentiment, measured by the NAHB/Wells Fargo index, registered at 33 in July. While still subdued, sentiment is improving slightly as builders continue to use incentives and rate buydowns to attract buyers.Investor and Market Reactions:Investor interest is picking up in the builder sector, with stocks such as Lennar and D.R. Horton rallying alongside ETFs tied to housing. This is being driven by the expectation that lower mortgage rates, combined with a potential Fed policy shift, could boost housing demand into the fall.Macro Outlook:July’s CPI report showed inflation at 2.7% year-over-year, with core CPI at 3.1%. While still above target, the cooling trend has increased the likelihood of a Fed rate cut in September, with futures markets now pricing in an 83% probability. Fed Chair Powell’s remarks at Jackson Hole later this week will be pivotal for setting expectations.Bottom Line:Rates are at their lowest point in nearly a year, fueling stronger refinance and purchase activity. Inventory remains tight in the resale market, while builders continue to lean on incentives to capture buyers. All eyes are on this week’s housing starts report Tuesday and existing-home sales data Thursday for confirmation of whether this uptick in demand will sustain.