Last week we addressed the issue of inflation and inflation’s influence on interest rates. The Federal Reserve’s policy is to keep inflation at a 2.0% level as elevated inflation has a detrimental effect upon the economy.  Certainly, elevated inflation has a detrimental effect upon every American’s pocketbook. The Fed tries to ease inflation by tightening monetary policy which can mean that they are raising their benchmark interest rate (the Federal Funds Rate) and/or decreasing the supply of money in circulation. These actions are designed to slow the economy at the same time.

Of course, the decision to tighten monetary policy is problematic if the economy is not strong. This is where the Fed’s balancing act comes in because the Fed’s goal is also a healthy economy.  In other words, we don’t want to give the patient too much medicine, which would cause additional or even worse problems.  To add another factor into the equation, there is the possibility that the Fed could raise interest rates as they did a few weeks ago but long-term rates such as rates on mortgages could go down as a result. How is that possible? First, the Fed controls very short-term rates. However, it is also not unusual for rates to rise in anticipation of the Fed’s action, which is exactly what is happening. Federal Funds Rate is the rate that banks charge each other to borrow funds overnight to make sure their balance sheets are “balanced.” That is very short-term.

Long-term rates are affected more by the prospects of inflation, as discussed previously. When the Fed raises their benchmark interest rate, the markets could perceive that the Fed is acting to bring inflation under control, which is a good thing. Therefore, it would not be unusual for the markets to react positively to this Fed action. It is also not unusual for rates to rise in anticipation of the Fed’s action, then easing back somewhat after it happens. Going back to the economy, on Friday we have a report being issued which will give us a good idea if the Fed feels like the economy is strong enough to withstand higher short-term rates. That report is the monthly employment report for September. Last month we had a strong jobs report. Two strong reports in a row could denote the start of a trend after a long period of slow job growth. We expect the markets to watch this report closely in this regard.

Weekly Interest Rate Overview

The Markets. Mortgage rates continued to rise sharply in the past week following government bond rates which were moving higher. They continued to rise after the Freddie Mac survey was released. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 7.03% last week from 6.95% the previous week. In addition, 15-year rates increased to 6.42%. A year ago, 30-year fixed rates averaged 6.30%, 0.73% lower than today. Attributed to Freddie Mac: The housing market remains supported by a solid labor market and an economy that is growing at a healthy rate. Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

Zillow’s August data show the result: Home sales fell 0.6% from a year earlier, while newly pending listings, a more current sign of buyer activity, fell 2.6%. The pullback follows a brief period of improving conditions earlier this year, when lower rates helped revive activity. Earlier this year, rising mortgage rates began to erode affordability gains even as the housing market showed signs of renewed momentum. That seems like bad news, but for some, it might be an opening. Buyers who can make a move today are encountering conditions that were scarce during the frenzied years: more homes to consider, more time to decide and sellers who are increasingly cutting prices to attract buyers. There were 1.41 million homes for sale nationwide in August, 3% more than a year earlier, and 26.3% of listings carried a price cut. “Affordability is putting the brakes on the for-sale market, but it is also changing the experience for buyers who remain active,” said Mischa Fisher, Zillow chief economist. “Less competition gives well-prepared buyers a better chance to compare options and negotiate with confidence.”  For sellers who are battling for the buyers who can make this market work, everything comes down to preparation. Pricing competitively from the start matters when buyers are taking more time.  Source: Zillow

Clever Real Estate released a report finding that 50% of Americans report living paycheck to paycheck. Seventy-four percent believe they will still be living that way a year from now. However, homeowners report being slightly more satisfied. Two-thirds (68%) of homeowners say they are satisfied with their finances while only 47% of non-homeowners say the same. More than one quarter–27%–of respondents describe themselves as over-spenders, but only 49% of those who describe themselves that way own a home, compared with 62% who don’t overspend. Thirty-nine percent of non-homeowners point to housing costs as impacting their money troubles, compared with 22% of homeowners. They’re also twice as likely to lack an emergency fund, at 61% for non-homeowners compared with 30% of homeowners. Forty-four percent of respondents report having missed a bill because of overspending on nonessentials. Half report having had to delay major life milestones–10% report having put off buying a home, and 19% said they have delayed saving for retirement. The vast majority (88%) of Americans admit to making impulse purchases, with 59% admitting they have knowingly made a purchase they couldn’t afford. And the majority, 68% (and 97% of self-reported over-spenders) have regrets about their spending habits. Source: Clever Real Estate

About one in four Americans is already using self-storage and just as many are actively searching for a unit online currently. Across the 150 largest U.S. cities, self-storage searches rose 23% year-over-year in 2025 — nearly triple the growth recorded the previous year, up from around 8% in 2024. Extra space has evolved from a convenience into an increasingly important part of household planning for a growing share of the population. What’s driving the shift? A housing market that remains challenging, homes that are becoming more compact, and lifestyles that require greater flexibility. Current housing conditions have made moving more difficult for many Americans giving homeowners with lower existing rates a strong incentive to stay put — even when their space no longer fully suits their needs. Buyers entering the market face a different challenge: New construction is delivering less square footage at higher prices, a trend some analysts have called housing shrinkflation.  Gen Z is navigating these pressures from another angle. Homeownership, long regarded as a generational milestone, can feel increasingly distant when saving for a down payment competes with rent, student debt, and everyday living expenses. Whether renting or preparing to buy, many young adults are building full lives in more compact spaces.  Remote and hybrid work have added another layer to the equation. For a growing number of Americans, a home office has become a practical requirement, meaning every corner devoted to work leaves less room for storage and other household needs.  Source: StorageCafe

The post September 29, 2026 – Addressing Rising Rates appeared first on Starwest Mortgage Corporation.

This is a topic that we have visited before in the past, however with the latest bond market volatility, it is an opportune time to address the subject again with the Fed acting to address the issue this past week.  When you view headlines such as the 30-year bond yields hitting their highest levels in close to 20 years, certainly going deeper is warranted. We start with this question – why are interest rates rising again? There are two main answers to this question. First, there are fears that inflation will continue into the future.  There is a term for this inflationary condition, and it is called embedded inflation.  Embedded means it is becoming a permanent or long-term part of the equation. 

Why is inflation tied to higher interest rates? The simplest example is that inflation causes money to lose value in the future.  If I lend you $100 for one year and the inflation rate is 10%, when you pay me back in one year, that $100 will only pay for $90 worth of goods. Therefore, I must charge an interest rate of 10% in order to break even.  And we will state the obvious here—banks are not in the business to break even, thus the interest rate should be higher than 10%. Obviously, these numbers are fictitious, but they make the point.

The second answer is the fact that government borrowing is soaring. Why is the level of government borrowing an issue?  We have record Federal budget deficits. Actually, mind-blowing deficits. That is what happens when you lower tax revenue and continue to spend. That is very simple math. Here we are talking about supply and demand. If the government sells more bonds to fund the deficits, they will need to promise a higher interest rate to investors if demand is strong enough.  This forces other interest rates higher as well because the government is flooding the markets with supply. These problems are not ours only as inflation and government borrowing is happening around the world.  Though the U.S. has some unique issues such as the aging of our population which is putting additional pressure on the deficits and especially the social security system.

Weekly Interest Rate Overview

The Markets. Mortgage rates rose sharply in the past week as the Fed meeting approached. They eased the day after the Fed meeting and after the survey period closed. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.95% last week from 6.76% the previous week. In addition, 15-year rates increased to 6.26%. A year ago, 30-year fixed rates averaged 6.26%, 0.69% lower than today. Attributed to Freddie Mac: The 30-year fixed-rate mortgage continues to fluctuate as markets assess economic data.  Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

If you’ve been waiting for the housing market to get more affordable before buying a home, 2027 may not bring much relief. The latest forecasts suggest 30-year fixed mortgage rates could remain closer to 7% next year, keeping borrowing costs high for prospective buyers.  Fannie Mae and the Mortgage Bankers Association now expect rates to average 6.7% in 2027, a notable jump from recent forecasts. In other words, forecasters who had expected mortgage rates to ease now expect them to remain roughly where they are today. “Most of the recent affordability challenges have come from increased mortgage rates. Home prices have been falling on a year-over-year basis throughout 2026 at the national level,” says Joel Berner, senior economist at Realtor.com. “Behind the scenes though, inflation is the real culprit.” When inflation remains high, investors typically demand higher yields on Treasury bonds, which can keep mortgage rates higher, too. High inflation can also leave buyers with less spending power and make homes more expensive to build. For would-be buyers, that means waiting until 2027 may not make buying a home much cheaper. “Economic reality has forced even the most optimistic interest rate forecasters to project a higher rate environment than anticipated earlier this year,” says Marty Green, a residential mortgage lending attorney at Polunsky Beitel Green. The Fed’s preferred measure of inflation rose 3.7% in July from a year earlier, according to the Bureau of Economic Analysis, well above the central bank’s 2% annual target. Green points to renewed tariffs and the war in Iran as factors that could keep inflation high and make lower mortgage rates harder to forecast.  Source: CNBC

Renting a starter home remains the cheaper option in every one of the 50 largest US metro areas, but a new report suggests that advantage is quietly eroding. The national median asking rent for properties with up to two bedrooms fell to $1,695 in July. That’s a decline of 1.4% from the same period last year, according to the Realtor.com July 2026 Rent Report. It was the 36th consecutive month of annual rent decreases. Despite that persistent slide, rents remain $225, or 15.3%, above July 2019 levels, a reminder that the pandemic-era price shock has not fully unwound.  The monthly cost of buying a starter home across the same 50 metros averaged $2,553 in July, leaving renting $858 cheaper per month. A year earlier, that gap stood at $923. Starter home listing prices fell faster than rents over the past year. Buying costs dropped $89 in total, $57 of that from lower typical listing prices and $33 from a modest decline in the 30-year fixed mortgage rate, which moved from 6.72% in July 2025 to 6.54% last month. “Renters have gained meaningful financial breathing room over the last three years, and that advantage is still real in many major metros,” said Jiayi Xu, senior economist at Realtor.com. “But the savings gap is no longer moving in just one direction. Starter-home prices are falling faster than rents in many places, giving households who are ready to buy a stronger reason to stay engaged with the market.” Source: Mortgage Professional America   Editor’s Note: These comparisons do not take into account economic factors that favor purchasing such as principal reduction and tax advantages

According to the latest Realtor.com New Construction Insights Report, more than two-thirds (67.2%) of views to new-construction listings in the second quarter of 2026 came from shoppers from a different metro area than the home for sale. Realtor.com noted that the share exceeds the 65.4% of views to existing home listings coming from outside the listing metro, underscoring the outsized role of long-distance shoppers in new-home demand. According to the report, the strongest cross-metro interest is concentrated in Southern markets where new construction is often priced at or below the national median. “New construction is increasingly a destination for buyers who are willing to look beyond their current metro in search of more attainable options and a different lifestyle,” said Joel Berner, Senior Economist at Realtor.com. “The markets drawing the most distant attention are largely in the South, where buyers can often find a newly built home at a price that compares favorably with more expensive nearby and coastal metros.”  Realtor.com noted that the national median listing price for a newly built home was $450,256 in the second quarter, essentially unchanged from a year earlier, down 0.1%.  Source: MP Daily

The post September 22, 2026 – The Inflation Picture appeared first on Starwest Mortgage Corporation.

The Federal Reserve’s new Chairman, Kevin Warsh, has promised changes in their modus operandi under his realm.  Specifically, he has made pulling back on economic forecasting a cornerstone of his tenure. In his highly anticipated speech at the Jackson Hole Economic Symposium last month, Warsh explicitly criticized the Fed’s heavy reliance on “forward guidance”—the practice of telegraphing future interest rate paths.  We agree with his assessment that “accuracy in economic forecasting is still just an aspiration.”  After all, many times we have stated within this commentary that predictions of the future are futile.

On the other hand, how many Federal Reserve members have made speeches in the past several weeks, calling for a rate increase based upon their predictions that inflation is not going to get better without some intervention?  While we don’t have an exact count, enough of them have come out on this side of the equation that the markets were predicting a 60% chance of a rate increase around the first of this month. Another prediction of the future. Our point here is not to insert our own prediction of a rate increase, but to point out that the prediction game is not going away under Warsh’s tenure. As a matter of fact, with so many currently playing in the prediction markets, we as a culture are currently getting more invested in predictions, not less.

Two factors could keep the Fed from raising rates this week. First, the feeling that the Middle East conflict is not only going to quiet down, but oil and other commodities are going to start flowing freely again through the Strait of Hormuz. Secondly, evidence that our inflation rate is slowing and the economy is slowing with inflation. Warsh’s Jackson Hole speech indicated that the economy was strong. The most recent quarter’s 1.5% growth rate does not seem that strong to us, and the latest jobs report was evidence that, while unemployment remains low, job growth is still below normal despite a rebound last month. Also, last week’s inflation reports were elevated as expected.  Will the Fed raise rates? We will get our answer tomorrow. 

Weekly Interest Rate Overview

The Markets. Mortgage rates persisted higher in the past week as the conflict in the Middle East continued to flare up and the next meeting of the Fed approached. The 10-year Treasury continued its upward climb, and mortgage rates are following this trend as the markets stayed nervous about inflation expectations in response to oil prices climbing to recent highs. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.76% last week from 6.71% the previous week. In addition, 15-year rates increased to 6.09%. A year ago, 30-year fixed rates averaged 6.35%, 0.41% lower than today. Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

New condominium lending rules from Fannie Mae and Freddie Mac could make loan approval easier for some borrowers while adding complexity for others says NAR Director of Conventional Housing Finance and Valuation Policy Ken Fears.  Changes include the elimination of a streamlined process for project approvals, waivers available for buildings with 10 or fewer units and increases in homeowners association (HOA) reserve requirements.  With streamlined approvals eliminated, many have expressed concerns about transaction delays. Fears says Fannie Mae’s condo project manager app, introduced in 2025, should lessen the burden for lenders seeking project approvals, because once a building is approved for one loan, subsequent loans will no longer have to go through the full review.  Jodi Horne, Fannie Mae’s director of collateral risk management, says the new changes are aimed at preventing deferred maintenance, special assessment and long-term affordability issues, and she encourages real estate professionals and HOAs to verify condo eligibility to help avoid closing delays. Source: Realtor.com

Following a year characterized by elevated interest rates and sluggish sales, home sellers are finally confronting the reality this summer and becoming pragmatic about home pricing. Now, a year later, instead of opposing the cooling market, sellers have started to recalibrate their expectations and reduce their initial asking prices. Further, in July, the median listing price experienced a decline of 2.4% compared to the previous year. Additionally, less than 40% of the active listings underwent a price reduction, in contrast to 54% of listings in July 2025—indicating that sellers are now pricing homes more competitively from the outset. “Last year, sellers were still pricing for the market they remembered, not the one buyers were actually facing,” said Jake Krimmel, Senior Economist at Realtor.com. “This summer, they’ve been more realistic from day one—and more willing to adjust when necessary.”  In addition, the proportion of active inventory categorized as “on sale” or price-reduced decreased in all 50 of the largest metropolitan areas from July 2025 to July 2026. In instances where price reductions are required, sellers are initiating their first cut three to four days earlier than the previous year—averaging 34 days in comparison to 38 days last year—with reductions averaging at least one percentage point smaller across all regions. “That is good news for buyers, who are seeing lower asking prices and more room to negotiate, but it is also good news for sellers: Pricing to today’s demand is helping homes move and keeping more transactions alive in a high-rate environment,” Krimmel said.  Source: MP Daily

Mortgage rates haven’t moved much lately, but some would-be home buyers may be waiting on the sidelines based on misconceptions about mortgage rates, financing and what it really takes to buy a home.   A recent survey of about 1,000 prospective home buyers by Neighbors Bank found that nearly half—45%—believe mortgage rates are higher than they are. Meanwhile, 72% of prospective buyers say they’ve delayed their home search while waiting for rates to improve, putting their plans on hold for an average of 13 months.   Some may be beginning to question that strategy. Forty-one percent of potential home buyers who are waiting say they regret not buying before mortgage rates or home prices climbed further. Another 17% say they would have bought sooner if they could redo the past year.   About half of survey respondents also say rising rents have made it more difficult for them to save for a home. Many would-be buyers say they’ve been holding out for mortgage rates to drop to 5%, a level the market hasn’t seen since 2022, according to the Neighbors Bank survey. But “buyers who understand where rates actually stand may be positioned to move sooner than they thought,” says Ashley Harris, director of homebuyer education at Neighbors Bank. “The most useful move is usually to work with the market as it is.” The rate-perception gap is part of a broader issue Neighbors Bank has identified in its recent surveys around what prospective buyers think they need to qualify for a home.  In a separate survey of about 1,000 middle-income renters, 45% believed they needed a credit score of at least 700 to buy a home. More than half—55%—believed they needed a 20% or larger down payment, while another 29% thought they needed between 10% and 19%. In reality, the median down payment among first-time buyers was 10% last year, according to NAR.  Federal Housing Administration loans, a popular choice among first-time home buyers, can require as little as 3.5% down. Yet, 94% of renters surveyed said they didn’t know a down payment could be as low as 3% to 3.5%. Source: Neighbors Bank

The post September 15, 2026 – The New Fed Is Not So New appeared first on Starwest Mortgage Corporation.

Over Labor Day weekend the markets were able to ponder the latest employment report. The job sector has been up and down for the past eighteen months and after a dismal report in July, there was hope for an upturn with regard to the August numbers. As it turns out, in August the economy added 162,000 jobs.  In addition, the past two reports were revised upward by 55,000 jobs resulting in a net gain of 217,000 for the month. The headline unemployment rate remained at 4.1%.  Overall, these numbers were seen as a definite rebound from the lackluster July report.

On the inflation side, wage growth increased by 0.3% from July and 3.1% year-over-year.  These numbers are vitally important because it is imperative that the American consumer’s wage growth meets or exceeds the growth in prices that consumers are experiencing.  We are not only talking about everyday gas and other commodity prices, but long-term costs such as housing.  Strong wage growth helps make mortgage and rent payments more affordable in the long run. Of course, strong wage growth can also fuel inflation, which is something that the Federal Reserve is watching very closely.

Speaking of the Fed, they are meeting next week for the first time since their July get together.  The minutes of their July meeting were released in mid-August and there was certainly some inclination towards raising their benchmark interest rates. The August jobs report will likely add to this sentiment.  Despite the concern regarding increasing inflation, we had a fairly benign consumer price index report released last month.  The CPI index for August is due to be released this Friday and will serve as another important reading for the Fed to chew on when they meet next week. Another bit of good inflation news would be a good bit of ammunition to hold the hawks off at this meeting.

Weekly Interest Rate Overview

The Markets. Mortgage rates continued higher in the past week as the conflict in the Middle East flared up and expectations for continued inflation stayed relatively high. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.71% last week from 6.66% the previous week. In addition, 15-year rates increased to 6.04%. A year ago, 30-year fixed rates averaged 6.50%, 0.21% lower than today. Attributed to Freddie Mac: The 30-year fixed-rate mortgage averaged 6.71% this week. Purchase demand has remained relatively stable indicating steady interest from buyers adapting to evolving market conditions.  Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

Despite lagging sales, current homeowners remain in a strong position, continuing to benefit from the home price appreciation of recent years. Earlier this spring, NAR’s data showed that price growth has helped the typical homeowner accumulate about $128,000 in housing wealth over the past six years alone. Housing inventories remain limited in many markets, allowing sellers to retain an advantage in pricing their home while buyers contend with fewer choices this summer. The number of homes for sale in July fell 1.9% compared to June, and inventories are down 0.6% from July 2025’s already low levels. Facing little competition, owners are selling relatively quickly: Nationally, the median time on market in July was 29 days, according to NAR’s latest data. Entering the housing market remains tough for first-time buyers. Without equity from a previous home sale toward a purchase, many are having a hard time competing as higher prices and mortgage rates stretch affordability. First-time buyers comprised 29% of existing home sales in July, down from 33% in June but still up from 28% a year ago, according to the July 2026 REALTORS® Confidence Index Survey. Meanwhile, investors, second-home buyers and repeat buyers who can leverage cash from a previous sale are using their buying power: About a quarter of the market in June and July paid cash. Source: NAR

Cash buyers are losing some of the ground they gained during the pandemic housing boom, creating a slightly more favorable market for borrowers relying on mortgage financing. All-cash purchases accounted for 31.4% of home sales during the first four months of 2026, down from 32.3% during the same period last year, according to a new Realtor.com report. The change was modest, but the underlying sales figures showed cash buyers pulling back faster than the market overall. The number of cash transactions fell 11.2% year over year, compared with an 8.5% decline in total home sales. “Cash buyers aren’t disappearing; they’re simply becoming less dominant as the housing market finds its footing,” said Hannah Jones, senior economist at Realtor.com. “More inventory and moderating prices are giving financed buyers more opportunities to compete.” The national median sale price rose only 0.2% year over year during the period covered by the report. That was down from 1.8% growth in 2025 and well below the 15.4% increase recorded at the market’s 2021 peak. Slower price growth, improving inventory, and fewer bidding wars may reduce some of the pressure on borrowers who cannot waive financing contingencies or close as quickly as cash purchasers.  Still, a 0.9-percentage-point decline in cash share does not represent a wholesale reversal. Buyers without financing continued to account for nearly one in three transactions nationally, and the prevalence of cash varied widely by market and price range.  Source: National Mortgage Professional

Clean homes with high-end filtration systems for air and water are among the top three most important features sought by home hunters in America. More than one-third (36%) of U.S. house hunters say a “clean” home, one with high-end filtration systems for air, water, etc., is among the top three most-important features in the next place they live. This is based on a Redfin survey conducted by Ipsos. Redfin noted that makes it the most common priority for prospective homebuyers, along with security systems out of a list of 22 features. Redfin said, in fact, that clean homes and security systems outrank every other feature it asked about, by a longshot. Views come in third, with one-quarter (25%) of prospective buyers saying they’re a top priority, followed by smart-home technology (20%). Backup power generation — such as solar panels or generators—round out the top five, with 19% of house hunters ranking it as a top three priority. Redfin noted that climate resilient upgrades or features also are important to prospective buyers, with one in seven (14%) ranking it as one of their top considerations. Features that take health and climate risks into account are ranked higher than luxurious upgrades like home theaters (7%) and outdoor kitchens (10%). The survey wasn’t conducted in response to wildfire and smoke emergencies, but the results underscore a broader trend. Prospective homebuyers are placing a premium on features that help create a healthier indoor environment. For example, high-end air and water filtration systems can help reduce exposure to smoke and other pollutants, while growing interest in climate-resilient upgrades suggests buyers are increasingly looking for homes that can better protect them from the impacts of extreme weather and environmental risks.  Source: MP Daily

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This upcoming Labor Day weekend will have a special meaning with regard to the American labor force. Always held on the first Monday in September, this particular Labor Day is on the very last possible day – September 7th.  Why is that important?  Typically, the August jobs report is released after Labor Day.  But this year, Labor Day weekend will feature both the August jobs report on Friday and Labor Day on Monday.  Thus, Labor Day weekend will really have an extra focus on the labor market.  Considering the weak employment report released for July, we will be hoping for a last-minute surge as the summer comes to a close.

Of course, Labor Day weekend is also the unofficial end of summer, even though fall does not start for a few weeks. Kids are back in school and that means that summer vacations are over. Traditionally this weekend represents the start of the fall real estate season as well. The fall real estate season is usually not as strong as the spring market, however in our present economy the direction of interest rates could have as much influence on the real estate market as the calendar. We had an early real estate spring this year because rates eased, but late spring and summer were a bit quieter as mortgage rates reacted to higher energy prices caused by the conflict in the Middle East.

The economy has certainly slowed a bit as the year progressed. Last week the estimate of the second quarter’s economic growth was not revised from the original estimate. The 1.5% growth rate by itself is indicative of an economy muddling along, which is not surprising considering the tepid employment sector. In any other time, a slow economy would have brought interest rates down from today’s levels, but elevated energy prices have kept the markets on edge. Theoretically, a slower economy should reduce energy consumption which would counterbalance somewhat the influence of the Middle East conflict.  But markets don’t always react in concert with theory. Regardless of this conundrum, we hope everyone had a great summer and happy Labor Day!

Weekly Interest Rate Overview

The Markets. Mortgage rates were mostly unchanged this past week.  According to the Freddie Mac weekly survey, 30-year fixed rates rose one tick to 6.66% last week from 6.65% the previous week. In addition, 15-year rates increased to 5.98%. A year ago, 30-year fixed rates averaged 6.56%, 0.10% lower than today. Attributed to Freddie Mac: The economy remains resilient, demonstrated by steady consumer spending and rising household incomes. More homes coming on the market and slower price growth in many areas are giving buyers better options and helping create a more balanced housing market. Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

Over half of new single-family homes built in 2025 were two or more stories, according to the Census Bureau’s Survey of Construction. But the share of homes started with two or more stories fell in 2025, reflecting increased building activity in regions that prefer single-story homes. Nationwide, the share of new homes with two or more stories fell from 52.5% in 2024 to 51.4% in 2025, while the share of new homes with one story rose from 47.5% to 48.6%. This share varied significantly across the nation. Two-story homes remain more popular in most areas of the country. But the areas seeing the most new homes built tend to prefer single-story homes. The Northeast and the West had higher shares of two or more stories, while the entire Central time zone saw more single-story homes.  Even in areas that prefer multistory homes, the single-story share is growing. For example, the single-story share in the Pacific has increased in seven of the last eight years, from 32.7% in 2017 to 47.5% in 2025. This could reflect the increased cost to build homes and developers focusing more on moderate and low-cost housing.  Source: National Association of Home Builders

Moving is never easy, but lately, more people are trying to keep the process quick, small, and breezy. In the first four months of 2026, bookings for help with a partial move were up 37% from the same period last year, while short-distance relocations jumped 29%, according to data shared by Taskrabbit. In addition, same-day bookings for moving help jumped 19%. These stats indicate that more people are moving smaller loads faster across fewer miles. In other words, micro-moves are on the rise.  “We’re definitely seeing a shift toward smaller, more frequent moves—people are moving for more immediate opportunities like a new job, a better apartment deal, a roommate situation changing, or simply wanting to try out a new city or neighborhood,” says Nick Friedman, co-founder of College HUNKS Hauling Junk & Moving. “We’re also seeing more people make decisions quickly—instead of planning a move months in advance, some customers are reaching out within days because they have more flexibility and fewer belongings to coordinate.” This tracks with the micro-moving trends Taskrabbit identified, especially, but not solely, in urban centers.  “While cities like New York, Chicago, and San Francisco are seeing strong growth in studio and small-unit moves, we’re seeing even faster growth in smaller, suburban markets, leading short-distance and local move bookings to rise nationally,” says Chris Ager, chief commercial officer at Taskrabbit. “This tells us that the idea of moving lighter and faster is resonating across many geographies, whether that means leaving a city for a suburb, moving between neighborhoods, or simply downsizing within an area.”  Source: Taskrabbit

Carson Austin began to worry after his home had been sitting on the market for a couple of months with barely any interest from potential buyers.  It was early 2025, and he had listed the 4,600-square-foot Georgetown, Texas, property for $1.6 million, which he thought was a competitive price, comparable to other large homes in the area. But mortgage rates were hovering around 7%, keeping buyers out of the market and sales stagnant. So Austin decided to try something a bit unconventional. He offered seller financing — an agreement in which the seller acts as the lender, typically providing the buyer with a short-term home loan. In Austin’s case, he held firm on the home’s sale price but offered a below-market interest rate to entice buyers. As soon as he offered the creative financing option, interest picked up. Within two days, the house was under contract with a buyer who agreed to a 35% down payment and a six-year seller-financed loan with a 4% interest rate. Seller or owner financing gained popularity in the 1970s and 1980s, when interest rates were sky-high, but it developed a bad reputation for lacking sufficient protections, particularly for low-income buyers. However, as mortgage rates have soared since 2022, the creative financing strategy has regained popularity, despite remaining a niche offering. The practice is increasingly common in higher-end home sales, according to Realtor.com. Sales involving seller financing grew by 8% in dollar volume to more than $30 billion between 2023 and 2024, according to Note Investor. ” Seller financing often appeals to buyers who want a below-market interest rate or who are struggling to qualify for a traditional mortgage. The so-called bridge loan from the seller, typically lasting about three years, provides the buyer with time to wait for rates to come down and find a traditional mortgage. Meanwhile, sellers can get an edge in the market and benefit from earning interest on the loan.  “At its best, seller financing creates genuine win-wins,” said Ryan Leahy, who founded MORE Seller Financing. But the practice can be financially and legally risky without the right protections. Leahy said that seller financing can have “lots of pitfalls and risk if it’s not done right.” Source: Business Insider

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In our last commentary we discussed the Federal Reserve’s reaction to what they termed “elevated inflation.”  The recently released minutes from their last meeting and several speeches delivered since that meeting have served to indicate that there are Fed Governors who are ready to increase interest rates in the near future. Instead, they woke up to a big surprise during the early part of August. Employment data for the month of July revealed that 23,000 jobs were shed, In addition, the previous two months of job gains were revised downward by 103,000 jobs.

Taken together, that is a loss of 126,000 jobs. Since the economy has been adding only about 30,000 jobs per month over the past year, that number is extremely significant. Taken together with recent data showing a 1.5% growth rate for the economy during the second quarter (subject to revisions) – the Fed has another worry on their hands.  That worry is slowing economic growth. It will be that much harder for the Fed to raise interest rates if the economy is not growing strongly enough. They can’t lower rates in the face of elevated inflation, and they can’t raise rates because of slow economic growth. That is called being between a rock and a hard place.

The good news is that the Fed is not meeting in August. Their next meeting is in mid-September. By that time, we will have another jobs report to chew on, as well as one revision of the measure of economic growth for the second quarter. Plus, there will be a few inflation readings as well. Let’s hope that the economy reverses some of these job losses and inflation eases as the situation in the Middle East calms down. Leaving rates steady would not be as much of a concern if these two scenarios come to fruition. In the above forementioned “rock and hard” place situation, this is the best we can hope for. We won’t have to wait very long to see some evidence as the Fed’s favorite inflation statistic is due out this week and the jobs report for August will be released at the end of next week.

Weekly Interest Rate Overview

The Markets. Mortgage rates eased slightly again this week. Two conflicting forces caused a significant amount of volatility. The lack of progress in the Middle East pressured rates higher while the Treasury initiated an expanded bond buyback program which helped alleviate this pressure. According to the Freddie Mac weekly survey, 30-year fixed rates fell to 6.65% last week from 6.67% the previous week. In addition, 15-year rates decreased one tick to 5.95%. A year ago, 30-year fixed rates averaged 6.58%, 0.07% lower than today. Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

Home prices rose in 80% of metro markets in the second quarter of 2026, up from 71% last quarter, according to the National Association of REALTORS®’ latest report. The data points to stronger homeowner equity and continuing affordability challenges for buyers.  The median price for a single-family existing home in America is now $434,900, up 1.5% compared to this time last year.  NAR Chief Economist Lawrence Yun explained how home prices fit in the larger context of closed transactions, weighing additional economic forces.  “Home sales increased despite mortgage rates rising. This testifies to the potential housing demand building up from steady job and income gains,” Yun said. “Sales rose in three of the four major regions, with the South leading the way due to faster job growth. The Northeast was the exception, held back partly by slower job growth and faster-appreciating home prices, which hurt affordability.”  Yun added, “It is welcoming to see incomes rising faster than home prices, which has helped boost affordability—but the big short-term challenge to affordability is coming from rising mortgage rates.” NAR data shows that year-over-year the typical monthly mortgage payment is down. Those who bought an existing single-family home with a 20% down payment in the second quarter of 2026 are paying roughly $52 less per month than last years’ buyers. Housing costs are also eating up less of those groups’ household incomes. Typical families are now spending 23.8% of their income on their mortgage payments, down from 25.5% last year.  Source: MP Daily

Americans need to earn nearly $110,000 a year to comfortably afford the typical home for sale in the United States, even as housing affordability has shown modest signs of improvement over the past year. A  Redfin report found that a household would need an annual income of $109,796 to purchase the median-priced U.S. home in June 2026 while spending no more than 30% of said income on housing costs. That’s 0.5% lower than the record high of $110,382 a year ago, meaning the income needed to buy a home has changed very little over the past year. The stabilization comes as household incomes have continued to rise alongside home prices. Redfin estimates the median U.S. household earned $87,599 in June, up 4% from a year ago, while the median home sale price increased 2.2%. Mortgage rates also eased slightly but remained in the mid-6% range, keeping borrowing costs elevated.  Even with those gains, according to Redfin, the typical household still earns about $22,200 less than what’s needed to purchase the median-priced home and be financially comfortable. That’s an improvement from the roughly $26,100 gap a year ago, and nearly $28,900 two years ago.  Redfin Senior Economist Yingqi Xu said that the market has become “a bit more manageable” for buyers because it is now a “buyer’s market” in much of the country, giving shoppers more options and stronger negotiating power.  Source: USA Today

If the Baby Boomer generation had a theme song for today’s housing market, it might be “Born to Run” – and the numbers back it up. According to the 2026 Home Buyers and Sellers Generational Trends Report, buyers aged 61 to 79 remain the largest generational force in home buying, accounting for 42% of buyers (unchanged from last year) and an impressive 55% of sellers. Behind those numbers is a generation using its market power with purpose, making moves guided as much by lifestyle and relationships as by financial leverage. Many Boomers are making moves rooted in relationships and lifestyle. Like the road trips of “Easy Rider,” proximity matters: 31% of Older Boomers (ages 71–79) and 23% of Younger Boomers (61–70) bought homes to be closer to friends and family. Downsizing is also part of the story. Sixteen percent of Older Boomers said they purchased a home specifically to downsize, compared to 11% of Younger Boomers. Meanwhile, 15% of Younger Boomers bought homes with retirement in mind. Flexibility is a hallmark of this life stage, and often housing equity makes that choice easier. Veterans make up a significant share of this group. Twenty-eight percent of Older Boomers and 18% of Younger Boomers served, with VA loans playing a key role: 16% of Older Boomers and 14% of Younger Boomers used VA financing. Boomers are also more likely to own additional property. Six percent of both Younger and Older Boomers own one or more vacation homes. Senior-related housing is especially popular, with 23% of Older Boomers and 13% of Younger Boomers choosing these communities. Financially, many Boomers are entering their “cash-is-king” era. Thirty-nine percent of Younger Boomers and 46% of Older Boomers paid all-cash for their homes. Among those who financed, more than half used proceeds from selling their prior residence for the down payment. Source: National Association of Realtors

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A few weeks ago, the Federal Reserve’s Open Market Committee met to discuss Fed policy. All eyes were on the Fed as recent events in the Middle East had unleashed further pressure upon inflation. In the meantime, the Chairman of the Federal Reserve, Kevin Warsh, was conducting his first meeting. At the end of the day (or precisely Wednesday early afternoon), the Fed decided to keep their benchmark rate steady for the fifth straight meeting, which was not a surprise. It was also not a surprise that three members of the committee voted to increase interest rates in light of recent events.

Even though the Fed kept rates steady, the bond market forced longer term interest rates higher immediately. Thus, the question was – why did interest rates rise when the Fed kept their rates steady? When considering the circumstances, it is important to remember that the Fed’s benchmarks rates are very short-term and the interest rates which rose were longer-term rates. Thus, the spread between short-term rates and long-term rates widened. This explains what happened technically but does not explain the poor reaction from the bond market. To achieve that answer, we must dig deeper.

The Fed’s statement after the meeting acknowledged that inflation was elevated. That statement by itself would worry the bond markets, even though the Fed was stating the obvious. Moving further, in the face of elevated inflation, the Fed did absolutely nothing. It kept status quo. The bond market expects the Fed to be more vigilant in this regard. A stronger statement would have helped mitigate the reaction. Meanwhile, from a political standpoint, the Administration for months has been putting a lot of pressure on the Fed to lower interest rates and since the new chairman was the Administration’s pick, the markets are worried that the Fed won’t be vigilant enough. This concern comes despite the fact that Chairman Warsh has a history of being quite conservative in this regard.

Weekly Interest Rate Overview

The Markets. Mortgage rates eased slightly this week and continued to move lower after the survey period closed due to the encouraging inflation reports.  According to the Freddie Mac weekly survey, 30-year fixed rates fell to 6.67% last week from 6.69% the previous week. In addition, 15-year rates decreased to 5.96%. A year ago, 30-year fixed rates averaged 6.58%, 0.09% lower than today. Freddie Mac noted that housing affordability has improved from a year ago, and recent increases in purchase and refinance applications suggest that borrowers continue to respond to even modest changes in mortgage rates.  Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

Perhaps the most consequential piece of the new landmark housing legislation involves an astonishingly simple change to a 50-year-old federal law. Manufactured houses, or mobile homes, no longer must have a permanent chassis, the steel under-frame used to transport the house and then left attached. The U.S. desperately needs more affordable starter houses for low- and middle-income folks currently priced out of the market, and some builders and housing advocates say this little tweak could help do the trick. Manufactured homes can cost from 27% to 65% less than comparable houses built on site, according to an estimate from the Niskanen Center. While most U.S. homes are “stick-built” on site, manufactured homes get built in factories. There are economies of scale — standardized materials, centralized purchasing, controlled weather conditions and a stable workforce (crucial at a time when construction labor is in short supply due to the immigration crackdown). Proponents say there’s more to it. Shedding the bulky steel structure under a house opens up a whole new array of design opportunities for these often-stigmatized homes. The change could make multi-story manufactured homes, lower-to-the-ground designs and basement installations easier and less costly — amping up their appeal. What they’re saying: “I think we’re going to see a lot of clever ways that people decide to use these homes,” says Joel Berner, a senior economist at Realtor.com. For example, it could make manufactured housing a more practical option for accessory dwelling units, or ADUs, which more states and cities are allowing as they face housing shortages. Yes, but: There are still roadblocks ahead. Many local zoning laws restrict the placement of manufactured housing, partly due to the stigma. HUD still has to write the standards to adopt the change, and states have one to two years to align their laws.  Source: Axios

Foreign buyers continue fleeing the U.S. housing market, with their activity falling 14 percent between April 2025 and March 2026 to the second-lowest level since the National Association of Realtors (NAR) started tracking purchases in 2009. Paige Terryberry, a senior research fellow at the conservative think tank Foundation for Government Accountability, made the point in a recent opinion piece for Fox News that “each home bought by someone from outside the U.S. leaves one fewer home for Americans to buy.”  Their decline in activity, then, should offer some modest relief to U.S. buyers, who are facing less competition for the available for-sale inventory across the country. Foreign buyers purchased 67,100 homes in the 12 months between April 2025 and March 2026—the equivalent of 1.7 percent of all home sales. That was down 14 percent from a year earlier.  In dollar terms, their purchases totaled $45.3 billion, or 2.0 percent of all home sales within that period, down 19 percent from a year earlier. Because they represent only a very small share of all U.S. home purchases, the withdrawal of foreign buyers from the market will have a limited impact on Americans. “The decline in foreign homebuyer activity mirrors the decline in international visitors and tourists to the United States,” NAR chief economist Lawrence Yun said in a statement.  The homes they bought were relatively more expensive than the ones purchased by U.S. residents—for a median price of $465,000 compared to $413,600—and nearly half of these (48 percent) were paid all-cash—something that, in the overall market, only happens in 28 percent of deals.  Source: Newsweek

Gen Z mortgage shoppers in the nation’s 50 largest metros plan to put down far less than any other generation, according to an analysis of more than 130,000 mortgage purchase inquiries submitted through the LendingTree platform.  However, not all younger shoppers plan to put down less. Millennials join baby boomers, the oldest generation in our analysis, in planning to make the largest down payments of any age group across the nation’s largest metros. Planned down payments also vary widely by metro, with Gen Z shoppers in two locations planning to make six-figure down payments. Key findings include the fact that, across the nation’s 50 largest metros, Gen Z mortgage shoppers plan to put down a median of $41,250, the lowest of any generation analyzed and 25% below the overall median of $55,000. Millennials and baby boomers tie for the highest median planned down payment at $65,000, while Gen X shoppers plan to put down a median of $56,250.  The gap is consistent with broader financial differences across age groups. On average, Gen Z adults tend to have lower incomes, lower credit scores and less home equity than older generations, making saving for a down payment a Herculean task for many people that age. Even so, the inquiry data shows many Gen Z shoppers are preparing to buy homes despite those challenges.  Source: Lending Tree

The post August 18, 2026 – In Case You Are Wondering Why appeared first on Starwest Mortgage Corporation.

Sure, there is a lot more to the economy than these two factors. But we can’t think of two headlines which have garnered more attention this year. Obviously, the Iran situation affects the economy, and the next result of the conflict has been higher energy prices, rising interest rates and flagging consumer confidence. But overall, the economy has kept moving forward, buoyed by a resilient stock market.  The employment sector is a primary indicator of the health of the economic sector. That is why last week’s report was being watched so closely.

So how did the employment report come out?  The economy lost 23,000 jobs in June.  This number was significantly below expectations. In addition, the previous two months of job gains were revised downward by 103,000 jobs, making the net loss for the month 126,000 jobs. Despite the loss of jobs, the unemployment rate fell by 0.1% to 4.1%, which is a continued anomaly related to the sluggish workforce growth.  On the inflation front, wage growth increased by 3.2% annually, lower than expected. Overall, this was seen as a weak report and creates additional concern regarding the economy overall at a time when the conflict overseas remains a major factor contributing to this concern.

Which leads us back to the conflict in Iran which has spread throughout the Middle East. After weeks of heavy attacks and counter attacks, it appears that the parties have started talking again and a cease fire could be in the works. Of course, we have heard and lived through this story several times before. Let’s hope cooler heads will eventually prevail, and a ceasefire becomes the basis for a permanent truce. The markets could use some good news because we are due for the July inflation reports this week and it is not likely that this news is going to be good. Remember, the markets are not reacting to what happened last month, they will react to what they think will happen next month. That’s where hope comes in.  The phrase “hope is eternal” means that optimism never dies!

Weekly Interest Rate Overview

The Markets. Mortgage rates started to ease this week as news of an agreement to open the Strait of Hormuz was circulated, though 30-year rates rose slightly from last week.  According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.69% last week from 6.66% the previous week. In addition, 15-year rates decreased to 6.01%. A year ago, 30-year fixed rates averaged 6.63%, 0.06% lower than today. Freddie Mac noted that, while mortgage rates continue to influence affordability, the housing market is showing signs of adjustment, with listing prices modestly below year-ago levels and for-sale inventory improving from the limited supply seen in recent years. Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

The spate of wildfires, hurricanes, tornadoes and floods fueled by man-made climate change that have plagued vast swaths of the country in recent years is changing the housing industry. That’s because people who are seeking to rebuild in disaster-prone regions are searching for greater peace of mind. As a result, they’re turning away from stick-builds and embracing prefabricated homes that are made using materials that are fire-resistant and can withstand extreme weather, and that are now considered standard, and are often more affordable.  Manufacturers are meeting that demand with innovative and safer alternatives. Many companies are designing prefab houses that can withstand category 5 hurricane winds — up to 250 mph — earthquakes, hailstorms, massive snowfall and fire. Depending on customizable preferences, prices can vary from below $100 per square foot to over $500 per square foot, excluding land. But even those prices often fall under traditional on-site building costs in many parts of the country. The Manufactured Housing Institute reports that as of 2024, nearly 21 million people in the U.S. live in manufactured or mobile homes. Manufactured homes made up more than 9% of new home starts in the same year. Meanwhile, consumer prices have remained largely unchanged over the past three years, making them increasingly attractive to first-time buyers.  Given the escalating climate risks across the country, Harrison Langley, CEO of MDLR Brands, believes that traditional on-site building is unsustainable. His company has built single-family prefabricated homes, apartment buildings and commercial structures following 2019’s Hurricane Dorian in California, Tennessee and North Carolina. Source: NPR

Redfin released a survey querying why U.S. residents might be looking at out-of-state moves. The top reason reported by movers was weather, at 22%. No. 2 was concern about climate change, at 21%. Next were concerns about safety/crime at 20% and moving for a job or job relocation at 19%. Reported at 18% each were folks looking to be with/nearer to family, for lower overall cost of living and to upgrade to a better home or neighborhood. Rounding out the top 10 were wanting more space (16%), concerns about job security (15%) and for lower rental/home prices (15%). Americans searching for better weather are consistently moving from the northern parts of the U.S. to areas like Florida, Las Vegas and Sacramento. Of the respondents who are planning to move out of state, 14% are moving to Florida, 13% are moving to Texas and 11% are moving to California. “Many movers are looking for a location that aligns with their ideal lifestyle, and weather can play a meaningful role in that decision,” said Redfin Economist Yingqi Xu. “Whether it’s escaping harsh winters, the desire for year-round outdoor recreation or looking to sunshine as a mood booster, weather is an important consideration for many Americans who are relocating.” But movers within their current state point to different reasoning. For those respondents, 29% say they’re seeking a better home or neighborhood and 29% say they want more space. Twenty-one percent say they are concerned about safety or crime, 14% are concerned about natural disasters or climate risk and 9% are looking for better weather.  Source: Redfin

There are two kinds of homebuyers: those with pets and those without. And for pet owners, a home purchase can hinge on whether a listing works as well for their pet as it does for them, according to new data. A new survey from Realtor.com® finds that buyers with pets often evaluate homes through an animal-first lens, prioritizing features like a secure outdoor space, durable interiors, and communities where pets are allowed.  “I see pet needs influence decisions all the time,” echoes Miltiadis Kastanis, executive director of sales at Compass. “A buyer might really like a home, but if it does not feel right for their pet, whether it is the lack of outdoor space or the overall environment, they will walk away.” For many buyers, pets were not a side consideration but a real force in the home search—one strong enough to shape decisions and even justify paying more for the right features.  The survey answers pointed to a strikingly consistent definition of what makes a home truly pet-friendly: secure outdoor space, durable and easy-to-clean interiors, and neighborhoods or developments where pets are clearly allowed. “Pet friendly means having a good-sized backyard that is secured well with a fence or wall,” said Katey, a millennial first-time homebuyer.  And when buyers find those features, some are willing to pay more for them, the research found—a reality that agents say mirrors what they see in home searches every day. And that demand didn’t stop at closing. The survey found that while many buyers didn’t make major pet-related changes after moving-in, others invested in upgrades that made the home more durable, convenient, or comfortable for their animals.  Source: Realtor.com®

The post August 11, 2026 – Its All These Two Factors appeared first on Starwest Mortgage Corporation.

First, we thought that the employment sector was recovering from a period of lackluster gains.  Then we thought that the conflict in Iran was winding down. In July we found that both thoughts were quite premature. In early July we found out that the economy added only 57,000 jobs in June and the previous two months of gains were revised downward by 74,000 jobs, a net loss of almost 20,000 jobs for the month.  Then in mid-July, the agreement between Iran and the U.S. collapsed as the rockets began firing again and traffic was disrupted within the Strait of Hormuz.  Moving into August, the hope is that both trends are reversed again.

We begin August with the July employment report, which will be released this Friday. During the past 12 months, the economy has added an approximate average of 32,000 jobs per month. This average is significantly below the pace of previous U.S. economies which were non-recessionary.  As we have previously mentioned, the sluggish population growth is one factor contributing to these low averages, which explains why the unemployment rate is not rising.  This leads to a key question – If job gains remain subdued, will the unemployment rate start trending higher? Friday’s report might provide a clue to this puzzle.

Meanwhile, the situation in Iran has threatened to escalate even further than when it intensified during the initial conflict.  Our military bases throughout the Middle East were being hit in the middle of July.  Shipping was again disrupted and energy prices once again headed upward. This news came on the heels of the tamest inflation reports we had seen all year, which was quite ironic. Long-term wars are harbingers of inflation even when energy supplies are not disrupted because of increased government defense spending.  Again, ironically this spending can cause an increase in the rate of job creation. Regardless, it is everyone’s hope that the war does not evolve into a long-term engagement.

Weekly Interest Rate Overview

The Markets. Mortgage rates were very volatile after the Fed announced its decision to hold rates steady, despite acknowledging that inflation was elevated.  According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.66% last week from 6.58% the previous week. In addition, 15-year rates also increased to 6.04%. A year ago, 30-year fixed rates averaged 6.72%, 0.06% higher than today. Freddie Mac noted that the housing market continues to benefit from more available inventory, providing prospective homebuyers with additional options and helping support buyer activity as mortgage rates fluctuate. Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

Gen Z is no longer an emerging homebuyer segment — it’s becoming a primary source of purchases. New Intercontinental Exchange (ICE) data shows the generation accounted for a record 20% of purchase rate locks in the second quarter, while Millennials and Gen Z now make up two-thirds of financed purchases. The ICE Mortgage Monitor report suggests that even with affordability remaining a challenge, younger buyers continue finding ways into homeownership through government-backed financing and increasingly creative approaches to funding down payments. At the same time, home price appreciation accelerated in June, underscoring that affordability pressures remain even as inventory continues to improve. “Gen Z’s rise to nearly 20% of rate locks is one of the clearest signs yet of a generational handoff in the homebuying market,” said Andy Walden, head of mortgage and housing market research at ICE. “Despite facing one of the tougher affordability environments in decades, younger buyers are finding ways to become homeowners.” ICE said Gen Z’s market share is likely to continue climbing because much of the generation is only beginning to enter its prime homebuying years. The oldest members of Gen Z are approaching age 29, placing more of the generation squarely within prime first-time homebuying years. ICE found the cohort now represents nearly one-third of all first-time homebuyer mortgages and 27% of FHA purchase lending, highlighting continued reliance on government-backed financing to overcome affordability constraints.  Source: National Mortgage Professional

Rising foreclosures offer an opportunity for affordability-stressed buyers to find steep discounts, especially in hot markets as housing costs strain American homeowners. That’s according to a new report from Realtor.com, which found that foreclosures are increasing from extreme pandemic lows, with the current rate bouncing back to roughly 2019 levels. While this increase reflects the difficulties many homeowners are facing in today’s economy, it remains far below the spike during the 2008 financial crisis. The rise in foreclosures is tied to increasing housing costs. Buyers who purchased their homes after 2023 are at a higher risk of foreclosure because they have built less equity and have not benefited from price appreciation.  Some may owe more than their home is worth, making it harder to sell or refinance if they run into financial trouble. “Homeowners who purchased near the peak of the market with small down payments are most exposed when prices soften, because they had very little equity buffer to begin with. If the estimated value of their home falls while their loan balance stays largely fixed, they can slip into negative equity territory quickly,” Realtor.com senior economic research analyst Hannah Jones explained in a related report.  Realtor.com notes that, after foreclosure, homes are typically auctioned. If they do not sell at auction, they become “Real Estate Owned” (REO) properties and are listed for sale by the lender.  As of April 2026, REO homes made up about 1.3% of all homes for sale, and final prices were 27.2% below estimated market value.  Source: The Mortgage Note

When you drive through neighborhoods in the U.S., you might not expect that a number of those homes are empty. In fact, according to a new study from LendingTree, 14.5 million U.S. homes — roughly 1 in 10 nationwide — are unoccupied. But, LendingTree said, that doesn’t always mean availability. It said that some empty homes are used seasonally, while others are available for rent — and fewer than 800,000 are listed for sale. LendingTree said that the differences in vacancy type help explain why housing can feel scarce even when millions of homes sit empty. LendingTree said it analyzed U.S. Census Bureau data to see where vacancy rates are highest, how they’ve changed over time, and what they may reveal about local housing markets.   Of the 14.5 million U.S. homes which are vacant, 4.7 million are used seasonally or recreationally and 2.6 million are available to rent.  The national vacancy rate fell by 0.31 percentage points, or about 302,000 homes, between 2023 and 2024. Generally, a vacancy rate between 7% and 8% is considered consistent with a balanced real estate market, providing enough available housing to accommodate buyers and renters without creating significant shortages or surpluses.  “A healthy level of vacancy is generally a good thing because it gives buyers and renters more options and helps reduce competition for available homes,” said Matt Schulz, LendingTree Chief Consumer Finance Analyst.  Source: Scotsman Guide

The post August 4, 2026 – Employment Report in Focus appeared first on Starwest Mortgage Corporation.

The Federal Reserve has new leadership in the form of Chairman Kevin Warsh.  But that does not mean that the direction of this government entity is changing all that much.  Sure, Chairman Warsh brings a new perspective to the Fed. He is intent on changing how the Fed communicates with the markets, the size of the Fed’s balance sheet and even its view on inflation, as reported by CNBC. For example, we can expect less in terms of projections from the Fed in the future and a move towards a smaller balance sheet. He would also like the Fed to embrace changes that AI could bring.

However, amongst all these planned changes, there are still fundamental differences between the thinking of the Fed Governors. The minutes from the last meeting – the first chaired by Warsh – is a prime example of this discordance. There are members of the Fed who would like to raise interest rates now in light of the present elevated level of inflation. There are others who believe that this inflationary period is temporary and we should wait it out by keeping rates level.  And there are some who believe that lower rates are warranted due to slower economic growth which could portend a recession. The result was a stalemate, and the Fed kept rates right where they are at the last meeting.

The Federal Reserve Open Market Committee meets again this week, and the economic situation has not changed all that much. Iran is still vacillating between war and armistice. Inflation is still elevated. Long-term interest rates remain elevated. Yet, the economy does not appear to be slipping into recession territory. Instead, the economy seems to be humming along at a slow but positive pace, being held back by muted hiring but being supported by continued consumer spending. So, what will the Fed do when they meet this week?  Most are betting on another split decision which will result in the Fed keeping rates where they are.  In other words, the more things change, the more they stay the same. Stay tuned for the announcement early Wednesday afternoon.

Weekly Interest Rate Overview

The Markets. Mortgage rates continued to rise in the past week as hostilities in the Middle East intensified. Oil prices continued to react to threats on shipping in the Middle East, fueling the rise in rates. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.58% last week from 6.55% the previous week, with further increases occurring after the survey period. In addition, 15-year loans also increased to 5.96%. A year ago, 30-year fixed rates averaged 6.74%, 0.16% higher than today. Freddie Mac noted that market conditions continue to evolve. Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

Realtor.com report finds investors accounted for 11.3% of home purchases in 2025, as small investors gained market share and institutional buyers continued to retreat. As existing-home sales remained near multi-decade lows in 2025, real estate investors continued buying at a steady pace, according to a new report from Realtor.com. The Realtor.com Investor Report found that investors accounted for 11.3% of all home purchases in 2025, up slightly from 11.0% in 2024. Roughly 534,000 homes were purchased by investors last year, a 0.7% increase from the prior year, even as non-investor home sales fell 2.1%. At the same time, investor selling activity slowed. Investors sold approximately 442,000 homes in 2025, down 1.5% year over year and the lowest level since 2020. The gap between investor purchases and sales widened to roughly 92,000 homes, suggesting investors remain committed to accumulating residential real estate despite elevated rates and affordability challenges. “The investor market has found a new equilibrium,” said Hannah Jones, senior economist at Realtor.com. “With small investors now comprising nearly two-thirds of all investor purchases and large institutional players continuing to pull back, the dynamics shaping competition in entry-level housing are shifting — but that competition hasn’t gone away.”  Mega investors made up just 7.5% of investor purchases by 2025, which is their lowest percentage since 2011. Since then, their purchase volumes have decreased by over 70%. Source: National Mortgage Professional

Nearly three-quarters (74%) of U.S. homeowners would rather be at home than anywhere else, according to a recent Redfin-commissioned survey.  Redfin reported on how Americans feel about their homes and their neighborhoods. Redfin commissioned Ipsos to conduct the survey of 4,000 U.S. residents, including 2,280 homeowners and 1,431 renters. Results in this report are based on a single question which asked respondents to answer how likely they were to agree or disagree with a set of statements about how they relate to their current home and neighborhood. Homeowners were about as likely to agree that their home is a reflection of who they are (74%), and that they feel a sense of belonging in their neighborhood (72%). By contrast, most renters (57%) said their home is just a place to live. Just 35% of homeowners said the same. “For many homeowners, a home is more than a place to sleep and store belongings—it’s a reflection of who they are,” said Redfin Principal Economist Sheharyar Bokhari. “Homeownership can help people put down roots, build relationships and create a space that feels uniquely their own. Those emotional benefits are a big reason why owning a home remains a cornerstone of the American Dream. While affordability remains a challenge, today’s buyer’s market is giving some house hunters more negotiating power. Buyers are increasingly able to secure concessions and include inspection contingencies, helping them make more informed decisions before taking the leap into homeownership.”  Source: Redfin

Meet the real-life Golden Girls. In the much-loved 1980s sitcom the four wisecracking women who share a house in Miami met through an ad on a supermarket bulletin board. Present day in Denver, the housing matchmaker is Sunshine Home Share Colorado, a local nonprofit that Alison Joucovsky, a senior services administrator, founded in 2016 when the problem became urgent. “My phone was ringing off the hook,” she said, recalling anxious pleas from older residents spending most of their Social Security checks on rising rent or facing years-long waiting lists for subsidized senior housing. Home sharing “is a really efficient way to create affordable housing and to support older people who want to age in place,” Ms. Joucovsky said. Carefully vetting both “home providers,” who may be rattling around in family houses now too big and too empty, and “home sharers” seeking reasonable rents, Sunshine facilitated 31 shares last year, a record for the nonprofit.  “The cost of developing and building new housing is astronomical, and so is the length of time it takes,” said Laura Fanucchi, president of the National Shared Housing Resource Center and an administrator with HIP Housing, a home-share organization in San Mateo County, Calif. “Why not make use of existing housing stock?” About 55 organizations around the country offer these services — and demand is growing, driven by housing shortages, rising rents and sales prices that affect both the old and the young. Legislators in several states are working to promote home sharing as an option.  The need is acute. About a third of households headed by someone 65 or older were “cost-burdened” in 2024, according to an analysis by the Harvard Joint Center for Housing Studies. That means they spent more than 30 percent of their income on housing. To help increase their reach, some home-share programs now supplement or replace the traditionally labor-intensive matching process with online platforms. Source: The New York Times

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