New home sales took a notable step back in January, reversing much of the prior month’s strength and highlighting the volatility that often defines this data series. The Census Bureau reported a seasonally adjusted annual rate of 587,000 , down sharply from December’s 712,000 and 11.3% lower than January 2025. For-sale inventory moved slightly higher to 476,000 , up 0.4% from December but still 4.0% below year-ago levels. At the current sales pace, months’ supply jumped to 9.7 months , up from 8.0 months in December and 9.0 months one year ago. The increase reflects the combination of softer demand and relatively steady inventory levels. Prices declined on both a monthly and annual basis. The median sales price fell to $400,500 (-4.5% MoM; -6.8% YoY), while the average price dropped to $499,500 (-5.9% MoM; -3.6% YoY). The pullback suggests a shift in the mix of homes sold, with less upward pressure from higher-priced transactions.
Sales (MoM): -17.6%
Sales (YoY): -11.3%
Inventory (YoY): -4.0%
Months’ Supply: 9.7 (up from 8.0 prior month; 9.0 YoY)

Builder confidence ticked slightly higher in March according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), though sentiment remains subdued as affordability concerns continue to weigh on the single-family market. The headline index rose one point to 38 , following a small upward revision to February’s reading. While the increase marks a modest improvement, builder sentiment remains well below the breakeven level of 50 that separates positive from negative market conditions. The underlying components all posted gains during the month. The index measuring current sales conditions increased one point to 42 , while the gauge tracking prospective buyer traffic rose three points to 25 . The index measuring future sales expectations climbed two points to 49 , moving closer to the neutral threshold. “Affordability for buyers and builders remains a top concern,” said NAHB Chairman Bill Owens. He noted that many prospective buyers remain on the sidelines awaiting lower interest rates and greater economic clarity, while builders continue to grapple with elevated land, labor, and construction costs. NAHB Chief Economist Robert Dietz echoed those concerns, pointing to ongoing affordability challenges and uncertainty surrounding global events and energy prices as potential headwinds for the housing market. At the same time, he noted that recent efforts to reduce regulatory burdens on homebuilding could help improve long-term housing supply.

A first look at the capital plan suggests it moves the real estate finance industry closer to changes it lobbied for, but the devil may be in the details.

Household net worth climbed $2.2 trillion from the prior quarter to $184.1 trillion, a Federal Reserve report showed Thursday.

Terms of the deal were not disclosed but both firms are nationwide mortgage originators, with CrossCountry claiming it is the top retail lender.

Housing economists at ICE Experience 2026 predict mortgage growth but also say the home finance industry has yet to fully adapt to the disruption of this decade.

The Ohio-based lender is accusing Atlantic Coast Mortgage of stealing customers, while a Chicago bank is accusing Lower of raiding a Maryland branch.

The FHFA announced that Fannie and Freddie will remove ‘certain’ homeowners insurance requirements which may reduce costs. But what are people saying about where their industry-facing priorities are? Both are focused on leveraging technology and reminding lenders of their existing products. For example, Fannie offers a construction to perm program, as does Freddie Mac, and has “MH Advantage” for manufactured homes; Freddie has something similar. Both have the problem of educating the market about their products. Undisclosed debt and occupancy fraud are still issues, and appraisal automation and moving to UAD 3.6 are big deals. Both have very good ARM prices for the first time in a business cycle… ever? Certainly our industry goes through business cycles, and on today’s The Big Picture at 3PM ET Bill Cosgrove, CEO of Union Home Mortgage, discusses leadership through changing market cycles, maintaining discipline, managing margins, and positioning lenders to stay competitive as the market evolves. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Ocrolus. Ocrolus is transforming the mortgage industry with AI-powered data and analytics, featuring cutting-edge tools for automated indexing, income analysis, and now automated conditioning. Ocrolus helps mortgage teams move at the speed of automation with the precision of human oversight. Hear an interview with Storable’s Holly Fiorello on how mortgage rate “lock-in” is reshaping housing mobility, borrower expectations, workforce relocation, and the future of homeownership, while examining whether new lending products could unlock significant pent-up housing demand.)

Volatile Day Thanks to Central Banks And, Eventually Oil

Bonds took a break from their lock-step tango with oil prices for most of today’s session instead focusing on European Central Bank (ECB) policy news. Key considerations included a sharply higher inflation forecast, warnings of additional upside risks, and a repricing of rate hike (not cut) expectations for 2026. Combined with yesterday’s bad reaction to the Fed, the front end of the yield curve got hit hard–especially in the morning–and the pain radiated outward from there. During the selling spree, oil prices were staying well behaved. It wasn’t until the end of the day that geopolitical headlines helped oil prices drop sharply, bringing bond yields along for the ride.

Econ Data / Events

Continued Claims (Mar)/07

1,857K vs 1850K f’cast, 1850K prev

Jobless Claims (Mar)/14

205K vs 215K f’cast, 213K prev

Philly Fed Business Index (Mar)

18.1 vs 10 f’cast, 16.3 prev

Philly Fed Prices Paid (Mar)

44.70 vs — f’cast, 38.90 prev

Market Movement Recap

08:20 AM moderately weaker overnight. with most of the losses seen in the last 2 hours. MBS down a quarter point and 10yr up 4.7bps at 4.308. 2yr yield is up twice as much as market reacts to Fed day

10:17 AM Back to unchanged in MBS and up half a bp in 10yr at 4.267

02:41 PM Off best levels. MBS down 6 ticks (.09) and 10yr up 2.3bps at 4.284

03:08 PM MBS back to unchanged and 10yr now down 1.8bps at 4.245 on headlines suggesting Strait of Hormuz could reopen. 

At almost any moment in March 2026, a glance at the “10yr vs oil price” chart has revealed sufficient correlation to blame the bond rout on the energy price spiral. But the correlation is spotty at times and today is one of the starkest examples. Oil is essentially flat while bonds surged to higher yields overnight. We don’t normally focus much on 2yr Treasuries, but the selling there is much worse than in the 10yr, reflecting a rapidly changing outlook for the Fed Funds Rate. Indeed the odds of a rate HIKE (not cut) in April rose from just over 4% to just over 10% this morning. The big shifts in the 2s vs 10s yield curve speak to the same phenomenon. Oil prices and econ data are easily being drowned out by this large scale repositioning for “higher for longer” short-term rates.