Builders Breaking Ground at Fastest Pace in 2 Years
Fri, 22 May 2026 16:36:00 GMT
Residential construction activity was mixed again in April, as building permits rebounded while housing starts pulled back modestly from March’s stronger pace. The latest Census Bureau data continues to reflect a construction sector navigating uneven demand and affordability pressures. Privately owned housing starts fell 2.8% to a seasonally adjusted annual rate of 1.465 million , down from March’s revised 1.507 million pace. Despite the monthly decline, starts were still 4.6% higher than April 2025 levels. Single-family starts dropped 9.0% to 930k, while multifamily starts (buildings with five units or more) increased to 529k. On the permitting side, activity recovered after March’s sharp decline. Total building permits rose 5.8% to an annual rate of 1.442 million , though that was still 0.2% below year-ago levels. Single-family permits declined 2.6% to 872k, while multifamily authorizations climbed to 514k. As is often the case with this data series, month-to-month swings can exaggerate the underlying trend. More broadly, residential construction activity has remained relatively stable over the past year, with builders continuing to balance elevated financing costs, affordability challenges, and uneven buyer demand. In fact, if we smooth the data with a simple 3-month moving average, it's easier to see a decent little rebound from the long term lows last Fall. In this light, housing starts are the strongest they've been since early 2024.
Borrowers Shift Toward ARMs as Fixed Rates Climb
Fri, 22 May 2026 16:31:00 GMT
Mortgage applications pulled back last week as rising rates weighed on homebuyer demand, while refinance activity remained largely flat. The Mortgage Bankers Association (MBA) reported a 2.3% decrease in total application volume on a seasonally adjusted basis for the week ending May 15. The decline was driven primarily by softer purchase activity. The seasonally adjusted Purchase Index fell 4% from the prior week, though purchase demand remained 8% higher than the same week one year ago. Refinance activity was mostly unchanged despite the rise in rates. The Refinance Index dipped just 0.1% week over week but remained 35% above year-ago levels. The average 30-year fixed mortgage rate increased to 6.56% from 6.46%, reaching its highest level in seven weeks. According to MBA, concerns surrounding inflation, higher fuel costs, and growing worries over global public debt helped push Treasury yields — and mortgage rates — higher during the week. MBA’s Joel Kan said, " Overall applications were down to the lowest level in five weeks as purchase borrowers pulled back across conventional and government loan types. Refinance applications were essentially unchanged, with a decline in government refinances and an increase in conventional refinancing, likely as the increase in rates came late in the week. " Kan also noted that adjustable-rate mortgages gained traction as borrowers looked for lower-rate alternatives. ARM loans accounted for nearly 10% of total applications, the highest share since October 2025, with the average ARM rate sitting roughly 80 basis points below the 30-year fixed rate.
Builder Sentiment Improves Slightly as Mortgage Rates Continue to Weigh on Demand
Fri, 22 May 2026 16:04:00 GMT
Builder confidence improved modestly in May, though sentiment remained subdued as elevated mortgage rates, affordability pressures, and broader economic uncertainty continued to weigh on the housing market. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) increased three points to 37 . While the gain marks a slight rebound from April’s decline, the index is still sitting below the threshold that signals broader builder optimism. All three major components of the index moved higher in May. The gauge measuring current sales conditions rose three points to 40 , while the index tracking future sales expectations increased three points to 45 . The component measuring prospective buyer traffic also climbed three points to 25 , suggesting some buyers who had previously remained on the sidelines moved forward this spring. “The housing market remains soft as higher mortgage rates, rising gas prices and economic uncertainty related to the war in Iran continue to dampen buyer demand,” said NAHB Chairman Bill Owens. He added that ongoing efforts in Congress to modify the 21st Century ROAD to Housing Act could help increase housing supply and ease builder concerns. NAHB Chief Economist Robert Dietz said recent increases in long-term interest rates are likely to continue limiting buyer activity. He also noted that while some regional markets are showing relative strength, affordability challenges remain a significant obstacle for the broader housing market.
April Housing Inflation Data Fills in The Dots That Went Missing During The Government Shutdown
Fri, 15 May 2026 18:12:00 GMT
The Bureau of Labor Statistics released a highly technical research paper this week examining how the agency handled missing shelter inflation data during the October 2025 government funding lapse. The issue stemmed from the CPI’s housing survey, which was unable to collect rent data during the shutdown period. With no fresh survey results available, BLS relied on a “carry-forward” methodology that essentially treated rents as unchanged for the affected sample. That decision temporarily froze the CPI’s rent and owners’ equivalent rent (OER) indexes in October 2025, likely making shelter inflation appear somewhat cooler than it actually was for the next several months. In the new paper, BLS tested several alternative approaches to estimate what shelter inflation may have looked like under different assumptions. Every alternative method produced firmer rent and OER inflation readings than the official CPI figures published at the time. Depending on the methodology used, the research suggests shelter inflation may have been understated by roughly 0.3% to 0.6% on a year-over-year basis during the affected stretch. That may sound minor, but for markets closely tracking inflation and Fed policy expectations, a few tenths can matter. Still, BLS stressed that the distortion was temporary rather than structural. Once the affected housing panel was surveyed again in April 2026, both the official indexes and the research indexes largely converged back to similar levels. In other words, April's housing inflation essentially counted two 6-month cycles' worth. Thus, monthly housing inflation was more like 0.3 than 0.6.
Servicer Retention Fell in Q1, But Remains at Multi-Year Highs
Fri, 15 May 2026 18:04:00 GMT
Refinance activity continued to recover in the first quarter of 2026, but mortgage servicers retained a smaller share of borrowers despite the stronger lending environment, according to the latest ICE Mortgage Monitor. ICE estimated that roughly 585,000 first-lien refinances totaling $242 billion closed during the quarter, up from a revised 550,000 loans and $234 billion in the fourth quarter of 2025. Refinance volume more than doubled compared with the same period last year and reached its highest quarterly level since early 2022. Refinances accounted for nearly 44% of all mortgage originations in the first quarter, the highest share in four years. Rate-and-term refinances represented 60% of overall refinance activity, marking a five-year high as lower mortgage rates improved borrower incentive. Even with refinance activity gaining momentum, servicer retention weakened during the quarter. ICE reported that servicers retained 32% of refinancing borrowers, down from 35% in the prior quarter. Retention among rate-and-term refinances fell from 42% to 37% . It should certainly be noted that, although retention moved lower in the most recent quarter, overall levels are still the highest in years and that rate/term refis, in particular, have ramped up steadily over the past 3 years.
Existing-Home Sales Flat Year Over Year Despite Inventory Gains
Fri, 15 May 2026 17:58:00 GMT
Existing-home sales edged slightly higher in April, stabilizing after March’s decline as improving affordability and increased inventory provided modest support for buyers. Sales increased 0.2% to a seasonally adjusted annual rate of 4.02 million , matching the pace seen one year ago. “Despite mixed macroeconomic signals—including a record-high stock market and historically low consumer confidence—home sales were modestly boosted by the continued improvement in housing affordability,” said NAR Chief Economist Lawrence Yun. He also noted that mortgage rates remain lower than a year ago while income growth continues to outpace home price appreciation. Inventory continued to improve in April, though supply remains relatively constrained by historical standards. Total housing inventory climbed to 1.47 million units , up 5.8% from March and 1.4% higher than a year ago, representing a 4.4-month supply of homes. “Inventory still remains tight,” Yun said, adding that multiple offers are still occurring in some markets even as buyers take more time to make purchasing decisions. Home prices continued to move higher nationally, though appreciation remained relatively modest. The median existing-home price increased to $417,700 , up 0.9% year-over-year and marking the 34th consecutive month of annual price gains. Affordability improved compared to last year across all regions. The Housing Affordability Index registered at 110.6 in April, up from 101.4 one year earlier, reflecting the combination of slower home price growth, easing rates, and stronger household incomes.
Purchase Activity Lifts Mortgage Applications Despite Higher Rates
Fri, 15 May 2026 17:52:00 GMT
Mortgage applications increased modestly last week, as stronger purchase activity more than offset a slight decline in refinances. The Mortgage Bankers Association (MBA) reported a 1.7% increase in total application volume on a seasonally adjusted basis for the week ending May 8. The gain was driven entirely by home purchase demand, which continued to show resilience despite mortgage rates remaining near recent highs. The seasonally adjusted Purchase Index increased 4% from the prior week and was 7% higher than the same week one year ago. Refinance activity, meanwhile, edged lower. The Refinance Index declined 1% week over week but remained 28% above year-ago levels. Even so, refinance share slipped to its lowest point since July 2025, reflecting the limited incentive for many borrowers to refinance at current rate levels. The average 30-year fixed mortgage rate increased slightly to 6.46% from 6.45%, marking the highest level in five weeks. Despite the uptick, purchase demand improved across all major loan categories. Note: this data was collected before the rate spike at the end of the week (captured in MND's daily rate index) MBA’s Joel Kan said, " Purchase applications were higher over the week and 7 percent ahead of last year’s pace, with all loan types showing increases in purchase activity, as potential homebuyers shrugged off the current economic and mortgage rate uncertainties and returned to the market. "
Higher Rates Hit Mortgage Apps, But Only Modestly
Fri, 08 May 2026 16:56:00 GMT
Mortgage applications declined last week, reversing some of the prior period’s gains as rates climbed to their highest level in a month. The Mortgage Bankers Association (MBA) reported a 4.4% decrease on a seasonally adjusted basis for the week ending May 1. The decline was broad-based, with both purchase and refinance activity moving lower. The Refinance Index fell 5% from the previous week but remained 29% higher than the same week one year ago. Meanwhile, the seasonally adjusted Purchase Index decreased 4% week over week and was still 5% above last year’s level. In the bigger picture, purchase apps remain closer to the highest levels of the past few years. The average 30-year fixed mortgage rate increased to 6.45% from 6.37%, marking the highest reading in a month and weighing on overall application volume. Higher borrowing costs, driven in part by ongoing geopolitical tensions, continue to limit refinance incentives while creating some hesitation among prospective buyers. MBA’s Joel Kan said, " Mortgage rates last week increased to their highest level in a month... elevated rates and shrinking refinance incentives continued to weigh on activity... The refinance share of applications was the lowest since August 2025. " Kan also noted that while purchase activity softened on a weekly basis, it remains above last year’s pace. The average purchase loan size rose to a record $467,300 , suggesting that higher-priced segments may be driving activity while some entry-level buyers hold back amid affordability pressures.
2-Month Glut of Data Brings New Home Sales Back to Center of The Range
Fri, 08 May 2026 16:30:00 GMT
New home sales moved higher in March and February. Both months were reported on a single day this week as the Census Bureau continues catching up from the government shutdown. After dropping to 587k in January, sales rose to 635k in February and 682k in March. This represents a solid bounce back into the center of the broadly sideways range that's been intact for the past 2 years. For-sale inventory edged slightly lower to 481,000 , down 0.4% from February and 4.6% below year-ago levels. At the current sales pace, months’ supply fell to 8.5 months , down from 9.1 months in February and 9.2 months one year ago. The decline reflects a combination of stronger sales and modestly tighter inventory. Prices moved lower on both a monthly and annual basis. The median sales price declined to $387,400 (-5.3% MoM; -6.2% YoY), while the average price slipped to $503,100 (-3.4% MoM; -1.2% YoY). The continued softness in pricing suggests a shift in the mix of homes sold and ongoing pressure on affordability.
Sales (MoM): +7.4%
Sales (YoY): +3.3%
Inventory (YoY): -4.6%
Months’ Supply: 8.5 (down from 9.1 prior month; 9.2 YoY)
March Housing Starts Surge 10.8% as Permits Slide
Thu, 30 Apr 2026 18:11:00 GMT
Residential construction activity moved in opposite directions in March, as housing starts posted a strong rebound while building permits fell sharply from the previous month’s elevated pace. The latest Census Bureau report suggests builders accelerated new projects even as future pipeline activity softened. Privately owned housing starts rose 10.8% to a seasonally adjusted annual rate of 1.502 million , up from February’s revised 1.356 million pace. Starts were also 10.8% higher than March 2025 levels. Single-family starts increased 9.7% to 1.032 million, while multifamily starts (buildings with five units or more) came in at 446k. On the permitting side, activity pulled back notably. Total building permits fell 10.8% to an annual rate of 1.372 million , down from February’s revised 1.538 million pace and 7.4% below year-ago levels. Single-family permits declined 3.8% to 895k, while multifamily authorizations dropped to 427k. In general, there's no point in reading too much into month-to-month volatility in this data series. What's important is that there's been a decent, supportive floor of construction activity seen in 2024-2025 and a general upward trend since October, 2025. Housing completions were essentially flat for the month, edging up 0.1% to a seasonally adjusted annual rate of 1.366 million . Despite the monthly stability, completions were 12.8% lower than the same time last year. Single-family completions fell 4.8% to 896k, while multifamily completions reached 452k.