Investment purchases surged to their highest share in five years in the second quarter, even though total volume decreased from 12 months earlier.

Last week was a wild one for mortgage rates with the lowest levels in nearly a year on Monday and an abrupt spike after Wednesday’s Fed announcement.  The present week has been completely different with each day seeing minimal change compared to the previous session.  Today was no exception. This was actually a logical outcome based on the morning’s economic data.  PCE inflation–the broadest inflation metric and the Fed’s favorite–came in right in line with forecasts.  If it had been noticeably higher or lower rates would likely have moved up or down accordingly. Top tier 30yr fixed rates have been in the high 6.3’s since last Friday. If you remove September 5th-17th from the equation, that’s still lower than anything else since last October, but certainly quite a bit higher than the first half of last week when rates were in the 6.1’s.  Next week is highly uncertain due to the potential government shutdown.  It’s not the shutdown itself that would matter for rates.  Rather, it’s the absence of several important economic reports including THE most important one of them all: Friday’s jobs report. 

Existing-home sales held roughly steady in August after tepid uptick in July. That NAR reported a seasonally adjusted annual rate of 4.0 million , down 0.2% from July but 1.8% higher than a year ago. Sales have now hovered near 75% of pre-pandemic norms for three years, reflecting the same constrained but stable environment that has defined the market since 2022. NAR Chief Economist Lawrence Yun said mortgage rates are beginning to ease and inventory is slowly improving, which should help future sales. He added that record-high housing wealth and a strong stock market may support move-up activity, even as the lower end of the market remains tight. Regional Breakdown (Sales and Prices, August 2025)

Region
Sales (annual rate)
MoM Change
Median Price
YoY Change

Northeast
480k
-4.0%
$534,200
+6.2%

Midwest
960k
+2.1%
$330,500
+4.5%

South
1.83m
-1.1%
$364,100
+0.4%

West
730k
+1.4%
$624,300
+0.6%

National Market Stats

New home sales surged in August, breaking a two-year stretch of range-bound activity. The Census Bureau and HUD reported a seasonally adjusted annual rate of 800,000 , up 20.5% from July’s revised 664,000 and 15.4% above August 2024’s 693,000. This is the strongest monthly gain since the pandemic boom and a clear departure from the prior sideways trend. The only caveat is that this data series is notorious for wide margins of error and revisions. For-sale inventory fell to 490,000 , down 1.4% from July and 4.0% higher than a year ago. At the current sales pace, that represents a 7.4-month supply , a sharp drop from July’s 9.0 months and nearly 10% below August 2024. It is normal for inventory to move lower when sales increase, all else equal. Prices moved higher with the sales surge. The median sales price climbed to $413,500 (+4.7% MoM; +1.9% YoY), while the average price jumped to $534,100 (+11.7% MoM; +12.3% YoY). The share of $1 million-plus homes rose to roughly 7% of total sales, double July’s level, helping lift the average.
Regional Sales (MoM): Northeast +72.2%, Midwest +12.7%, South +24.7%, West +5.6%
Stage of Construction: Not started 96,000; under construction 290,000; completed 414,000
Median months on market (completed): 2.7
On a qualitative note, the huge move in home sales may raise questions about whether the recent rally in interest rates played a role. While there is broad connection between rates and sales at times, it never has an impact that quickly. After all, this sales data is for the month of August, and rates didn’t make their big move until September.

Mortgage application activity technically hit another long-term high last week, but that’s only because it was riding the coattails of the previous week’s stellar momentum. According to MBA’s Weekly Applications Survey for the week ending September 19, total volume rose 0.6% on a seasonally adjusted basis and 0.1% unadjusted. The Refinance Index increased 1% from the previous week and is running 42% higher than the same week one year ago. The modest improvement was likely driven by the lower rates available early in the survey period. As rates have snapped back to slightly higher levels, it makes good sense to see things level-off. “Interest rates generally have moved up following the FOMC meeting last week but remain in a range that is favorable for many borrowers,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. Purchase applications were similarly steady, with the seasonally adjusted index up 0.3% and the unadjusted index down 1% while remaining 18% stronger than a year ago. The refinance share of mortgage activity increased to 60.2% of total applications. The adjustable-rate mortgage (ARM) share decreased to 8.9%. The FHA share of total applications fell to 15.7%, while the VA share rose to 17.5%. Mortgage Rate Summary:
30yr Fixed: 6.34% (from 6.39%) | Points: 0.57 (from 0.54)
15yr Fixed: 5.70% (from 5.63%) | Points: 0.69 (from 0.58)
Jumbo 30yr: 6.44% (from 6.48%) | Points: 0.34 (from 0.35)
FHA: 6.14% (from 6.14%) | Points: 0.74 (from 0.68)
5/1 ARM: 5.53% (from 5.65%) | Points: 0.49 (from 0.41)

Call them wretched or call them splendid, in Japan, robots and service bots run some restaurants and are indeed taking the place of humans, who have no doubt, been displaced. In displacement (and labor) news in the United States, call it posturing or real, the Trump Administration’s budget office is threatening mass firings if the federal government shuts down (with no back pay to be paid like in a furlough), and obviously if someone is out of work, they’re not buying a house. This month’s STRATMOR piece is titled, “No Lender Wants a Government Shutdown, but Just in Case…”. Today’s Last Word at 1PM ET may include shutdown ramifications for lenders, as well as delinquencies, student loans, trigger leads, and new credit scoring updates that are reshaping how lenders compete for borrowers in 2025. Another topic may be that, fortunately, the net production income for independent mortgage banks has been creeping up, although the number of IMBs has been gradually diminishing. (Today’s podcast can be found here and this week’s podcasts are sponsored by BeSmartee, the most innovative mortgage technology platform for banks, credit unions, and non-bank mortgage lenders. Hear an interview with Angel Oak’s Tom Hutchens on the impact of the Fed’s rate cuts on mortgage activity and the potential for increased demand for non-QM products like HELOCs.) Services, Products, Software, and Tools for Lenders and Brokers This October, FirstClose is heading to Las Vegas for the MBA Annual Convention & Expo. Just like the lights on the Strip, the opportunity is hard to miss: homeowners are sitting on trillions in untapped equity, and lenders who act now can capitalize even in a higher-rate environment. FirstClose solutions give lenders the edge, streamlining home equity lending, accelerating workflows, and enhancing borrower experience. In a market where efficiency and growth are always on the line, it pays to play with the right partner. With so much equity waiting, the odds have never looked better. Ready to deal yourself in? If you’ll be in Vegas, schedule time with the FirstClose team. Book your meeting here.

However, Rocket, which has been of the companies to participate, has not yet announced its intentions regarding a pre-FHFA announcement increase.

The CDFI Fund is updating definitions of eligible activity to be considered for the funds, including removing climate-focused financing and references to race and ethnicity.

Washington, D.C. and Denver lead the country with the largest share of mortgaged households, and will likely soon see a shift in buyer demand, Realtor.com said.

The recent decline in mortgage rates and rising incomes helped improve buyer affordability, but record home prices remain formidable obstacles.