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.

Mortgage rates spiked on Wednesday (yesterday) after reports suggested a prolonged blockade of the Strait of Hormuz. As has been the case for most of the past 2 months, interest rate movement was clearly correlated with oil prices. Now today, both are moving back in the other direction though not for reasons that are as obvious as yesterday’s. The rally began just after 2am ET with both oil prices and bond yields dropping in concert. Lower bond yields mean lower rates, all else equal. After hitting 6.50% for top-tier 30yr fixed rates, the average lender is back down to 6.45–roughly where they were yesterday morning before a round of mid-day increases in the afternoon. [thirtyyearmortgagerates]

Home price appreciation remained subdued in early 2026, according to the latest data from both FHFA and S&P Cotality Case-Shiller. The two reports show prices still edging higher nationally, but with momentum slowing further as affordability constraints and elevated mortgage rates continue to weigh on the market. FHFA’s seasonally adjusted House Price Index was unchanged in February from the prior month, following an upwardly revised 0.2% gain in January . On an annual basis, prices were up 1.7% versus February 2025, slightly below the pace seen in prior months and consistent with a cooling appreciation trend. Regional FHFA data showed continued divergence across the country. Monthly price changes ranged from -1.1% in the Mountain division to +0.6% in the South Atlantic division. Over the past year, appreciation ranged from -0.7% in the Mountain region to +4.2% in the Middle Atlantic, highlighting a growing split between softer Western markets and firmer Northeastern areas. The S&P Cotality Case-Shiller U.S. National Home Price Index posted a 0.7% year-over-year gain in February, down from 0.8% previously and marking another step lower in annual appreciation. The 10-City Composite rose 1.5% , while the 20-City Composite increased 0.9% , both slowing from January readings.

Federal Reserve Chair Jerome Powell told reporters Wednesday that he would remain on the Fed board after his term as chair expires next month, resolving the last and most significant open question about his departure and the onset of Kevin Warsh’s leadership at the central bank.

One-time Rocket exec Mike Fawaz founded brokerage and tech firm Origna8 with his former adversary’s backing, which both say will enable it to quickly scale.

Kevin Warsh’s nomination to be the next chair of the Federal Reserve passed through the Senate Banking committee in a party-line vote.

Eligible purchases with the Better Home Equity Card, which lets homeowners instantly spend funds drawn from a home equity line of credit, earn 1% cashback.

President Biden had issued a rule in 2024 requiring newly constructed homes to abide by an energy mandate to be eligible for FHA- or USDA-backed mortgages.

Today’s Weakness Mostly War-Related With Small Boost From Fed

Because today was was a “Fed day” and because bonds hit their weakest levels of the day after the Fed announcement, we may look back on the selling and blame the Fed. In actuality, the Fed was only a small piece of the puzzle. Specifically, 10yr yields had already moved up from 4.34+ to 4.40 before the Fed announcement. At the 3pm CME close, there was only 1 more basis point of selling (4.41). The overnight/morning weakness was already covered in the morning commentary, but as a reminder, it had to do with the potential for a longer-term blockade of The Strait of Hormuz. There were no major issues with the Fed, but the market didn’t like the fact that 3 dissenting voters preferred to abandon the vague reference to future rate cuts via the “additional adjustments” verbiage. 

Econ Data / Events

MBA Purchase Index (Apr)/24

177.7 vs — f’cast, 175.6 prev

MBA Refi Index (Apr)/24

977.9 vs — f’cast, 1023.1 prev

Mortgage (Mar)ket Index (Apr)/24

298.5 vs — f’cast, 303.3 prev

Building Permits (Mar)

1.372M vs 1.39M f’cast, 1.538M prev

Building Permits (Feb)

1.538M vs — f’cast, 1.386M prev

Core CapEx (Mar)

3.3% vs 0.5% f’cast, 0.6% prev

Durable goods (Mar)

0.8% vs 0.5% f’cast, -1.4% prev

Housing starts number mm (Mar)

1.502M vs 1.40M f’cast, — prev

Market Movement Recap

08:31 AM weaker overnight and modest additional selling after 830am data.  MBS down 3 ticks (.09) and 10yr up 2bps at 4.369

10:07 AM MBS down 10 ticks (.31) and 10yr up 5.3bps at 4.402

12:01 PM Some volatility in response to news that the US is considering renewed strikes in Iran, but losses have been erased since then. MBS still down about 30bps and 10yr up 5bps at 4.398

02:16 PM Slightly weaker after Fed announcement. MBS down 14 ticks (.44) and 10yr up 5.8bps at 4.406

02:53 PM Weakest levels. MBS down nearly half a point. 10yr up 7bps at 4.42

Mortgage rates jumped higher today at the fastest pace in weeks to the highest levels since March 30th. There were two key motivations for the increase, but one accounted for a vast majority of the damage. News came out overnight that spoke to the possibility of a prolonged blockade of the Strait of Hormuz. Markets took this seriously because it involved conversations with oil executives to assess the the impact of a prolonged blockade on domestic energy markets and fuel prices. Bond yields (which correlate with rates) and oil prices lurched higher again this morning after a White House official reiterated/corroborated the overnight news. The supporting actor in today’s rate drama was the Fed announcement. While the Fed didn’t hike rates, 3 voters voiced their opposition to the wording of the Fed’s statement because it tacitly implies the Fed is more inclined to cut rates vs hike them in the near future. Those 3 voters would prefer to indicate that rates could go either way depending on inflation and the economy. The market took this as a minor negative indication for rates. Measuring in terms of 10-year Treasury yields, more than 80% of today’s rate spike was in place before the Fed announcement came out. The average mortgage lender is back to 6.50% for top tier 30-year fixed scenarios, up from 6.38% yesterday. Most lenders made mid-day adjustments to even higher rates as the underlying bond market continued to suffer into the afternoon.