By now, we’ve already said quite a bit about this week’s scarcity of scheduled events with the power to motivate meaningful changes in the bond market. With that being the case, one might be tempted to consider today’s FOMC Minutes as one of the biggest potential flashpoints and the first real opportunity to break this week’s monotony. But that’s probably wishful thinking. While we can’t ever rule out the possibility that something in the Fed Minutes will catch the market’s eye, the Minutes have been progressively minimized by the ever-increasing campaign for transparency–one that (dare we say) seems akin to “over-sharing” at times. In other words, we’ve heard from most Fed speakers in the 3 weeks since July 30th (the meeting that today’s Minutes will speak to). Moreover, on July 30th, we had yet to see the bombshell jobs report, or the two relatively interesting inflation reports.  Bottom line: don’t confuse the Minutes with “new news” from the Fed. Our only shot at such things this week remains Powell at Jackson Hole.

“I asked a German girl if Germans are afraid of numbers. She said 9!” Numbers make up the bond market, and a steeper yield curve (the difference between short-term rates and long-term rates… steeper = more of a difference) tends to help banks and credit unions since they are paying less on deposits and can lend the money out at a higher spread. Brokers and independent mortgage banks aren’t fans, however, as they tend to be beat up (a technical term) by borrowers doing comparison shopping. Unfortunately for any mortgage loan originator, comparing renting and ownership isn’t going so well. Ownership costs like insurance, property taxes, and assessments for condos are going up, while rents are not. Realtor.com reports that median rents declined YOY for the 23rd straight month. Median rents are about 2.7% below their 2022 peak, so rents have basically flatlined. Rents have increased on a YTD basis, however that might be nothing more than normal seasonality. The current median asking rent is $1,711. (Today’s podcast can be found here and this week’s is sponsored by FirstClose. FirstClose provides fintech solutions to HELOC and mortgage lenders nationwide, increases profitability, and reduces costs for mortgage lenders through systems and relationships that enable lenders to assist borrowers more effectively and ultimately shorten closing times. Hear an interview with NEXA’s Mike Kortas on the advantages of the wholesale channel, the evolving needs of borrowers, and how technology will change the scope of employment in the mortgage industry.)

Mortgage application activity eased last week, but not in a statistically significant way.  One might be inclined to note a very slight uptick in mortgage rates, but it’s just as fair to say that rates held steady near longer-term lows.  The Mortgage Bankers Association’s weekly survey showed a 1.4% decline in the seasonally adjusted Composite Index for the week ending August 15, 2025. “Mortgage rates increased slightly last week, with the 30-year fixed rate now at 6.68 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. VA applications fell 16%, while FHA refinance applications increased as FHA rates remained comparatively competitive. The Refinance Index decreased 3% week-over-week but remains about 23% higher than the same week a year ago. The Purchase Index was essentially flat (+0.1% seasonally adjusted) and is running about 23% ahead of last year’s level. The refinance share of total mortgage applications slipped to 46.1%. ARM share decreased to 8.6%. FHA share rose to 19.1%, while VA share declined to 13.4%. Mortgage Rate Summary:
30yr Fixed: 6.68% (from 6.67%) | Points: 0.60 (down from 0.64)
15yr Fixed: 5.96% (from 5.93%) | Points: 0.70 (up from 0.63)
Jumbo 30yr: 6.64% (from 6.70%) | Points: 0.60 (up from 0.56)
FHA: 6.39% (from 6.40%) | Points: 0.66 (down from 0.77)
5/1 ARM: 6.01% (from 5.80%) | Points: 0.63 (down from 0.67)

New residential construction increased 5.2% last month to an annualized rate of 1.43 million homes, according to government figures released Tuesday.

Senate Banking Committee Chairman Tim Scott, R-S.C., asked crypto firms to keep spending in elections, and said that they “literally” put Bernie Moreno, Sherrod Brown’s successor in Ohio, in the Senate.

Fed Vice Chair for Supervision Michelle Bowman warned that focusing too much on technology risks could make banks lose relevance with customers.

Fannie Mae economists toned down their housing and economic outlook in August, predicting fewer home sales and less mortgage origination volume versus July.

Home Depot Inc. sales returned to growth in the second quarter as shoppers invested in smaller projects, such as lighting and gardening.

The latest Residential Construction report from the Census Bureau showed a sharp rebound in July, with overall housing starts climbing 5.2% to a 1.428 million annual pace. Multifamily activity led the way, jumping to 470k—its highest level since May 2023—while single-family starts rose 2.8% to 939k. At the same time, permits slipped to 1.354 million, marking the lowest level in five years and underscoring a clear split between current activity and the forward-looking pipeline. The surge in multifamily starts fully reversed June’s decline and drove the bulk of July’s improvement in total starts. Single-family activity also improved modestly but remains well below earlier peaks. Completions were somewhat higher, but the more meaningful takeaway lies in the growing gap between permits and starts. Permits, by contrast, have been much more even-keeled—showing none of the sharp swings seen in housing starts. The steady decline in total permits—now at a five-year low—suggests builders remain cautious despite the recent rebound in activity. Single-family permits edged up 0.5% to 870k, but that gain was not enough to offset weakness in multifamily approvals. While July’s data highlights both the volatility of housing starts and the outsized role of multifamily construction, the deeper story is the widening divergence between starts and permits—pointing to persistent affordability issues, elevated mortgage rates, and lingering builder uncertainty about demand ahead.

Builder sentiment remains deeply subdued, as the National Association of Home Builders (NAHB) and Wells Fargo’s Housing Market Index (HMI) dipped one point in August to 32—its 16th straight month below the key 50 mark, and matching the lowest level since December 2022.
Current sales conditions fell one point to 35
Sales expectations for the next 6 months remained steady at 43
Buyer traffic ticked up two points to 22
High mortgage rates (hovering around 6.58%), elevated new-home prices, and affordability pressures continue to weigh heavily on builder sentiment. In August, 37% of builders reported price cuts averaging 5%, while 66% offered sales incentives—the highest share seen in the post-COVID era. Affordability and demand remain persistent challenges, and despite slight improvements in buyer traffic, the overall outlook remains weak. Builders are leaning more on incentives than confidence to attract buyers. Regionally, confidence was weakest in the West, where affordability pressures are most acute and sentiment fell to its lowest since late 2022. The South also declined but continues to hover near the national average, while the Midwest held steadier and the Northeast was little changed. The divergence highlights that high-cost markets are bearing the brunt of buyer hesitation, while lower-cost regions remain relatively more resilient.