Mortgage services.

Mortgage application activity softened last week, with both purchase and refinance demand moving lower as mortgage rates climbed to their highest level in three weeks. The Mortgage Bankers Association (MBA) reported a 1.0% decrease in total application volume on a seasonally adjusted basis for the week ending August 21. Purchase applications were down 0.3% from the previous week on a seasonally adjusted basis and 5% below the same week one year ago. FHA applications accounted for much of the weekly decline, falling 7% . Refinance demand also lost some ground. The Refinance Index fell 2% from the previous week and remained 17% below year-ago levels. FHA and VA refinance applications saw particularly notable declines, while the average refinance loan size fell to its lowest level since June 2025. "Mortgage rates reached their highest level in three weeks, with the 30-year fixed rate up slightly to 6.78 percent. Mortgage rates have increased around 20 basis points over the past two months, which has dampened refinancing activity," said Joel Kan, MBA's Vice President and Deputy Chief Economist. Despite the pullback in refinancing, refinances accounted for a slightly larger share of overall activity, rising to 42.0% from 41.9% the previous week. The adjustable-rate mortgage (ARM) share also ticked higher, reaching 7.9% from 7.7%.

The new home market struggled to maintain the momentum seen in June, with sales falling sharply in July and inventory moving higher. The latest Census Bureau and HUD figures point to another month of uneven activity for builders, as buyers continue to contend with affordability constraints and elevated mortgage rates. Sales of new single-family homes fell to a seasonally adjusted annual rate of 607,000 in July, down 10.5% from June's revised 678,000 and 6.3% below the same month last year. The monthly decline largely erased June's increase, leaving the broader sales trend little changed. In the bigger picture, the new home market has been broadly flat since the post-COVID volatility faded in early 2023. Meanwhile, builders added to the pool of available homes. The number of new houses for sale reached 488,000 , an increase of 1.9% from June, although inventory remained 1.6% below its level a year earlier. With the sales pace slowing as inventory increased, the implied supply rose to 9.6 months , up from 8.5 months in June and 9.2 months in July 2025. Pricing offered a mixed signal. The median sales price slipped to $393,800 , down 2.3% from June and 0.9% from a year earlier. The average sales price, however, climbed to $508,800 , an increase of 4.1% from the previous month and 5.4% from July 2025. As a reminder, price movements in this data set are not necessarily apples to apples, since changes in the mix of homes sold can have a significant effect on the reported figures.

Home prices continued to edge higher in the latest readings from FHFA and the S&P Cotality Case-Shiller Home Price Indices , with both measures showing somewhat stronger annual gains than they did a month earlier. The improvement was still relatively modest, however, and inflation continued to run ahead of home values. At the same time, the national figures continue to mask a growing divide between markets where prices are still climbing at a healthy pace and those where values have begun to slip. According to FHFA, U.S. house prices rose 2.1% between the second quarter of 2025 and the second quarter of 2026, while prices increased 0.3% from the first quarter. The agency's seasonally adjusted index was unchanged from May to June, suggesting that the quarterly gain came without much additional momentum heading into the summer. Prices have continued to appreciate nationally, but the current pace remains a far cry from the rapid increases seen earlier in the decade. The FHFA data also show just how differently housing markets are behaving across the country. All nine census divisions posted annual gains, led by the East North Central division at 4.5% . The Pacific division brought up the rear with appreciation of just above 0% . At the state level, Alaska recorded the largest increase at 8.3% , while Vermont and Hawaii followed at 7.3% and 5.8%, respectively. Only four states saw prices decline, with New Mexico posting the largest drop at 1.2% .