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

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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®

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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

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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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With all the focus in the media upon the efforts of the Administration to reduce the population of illegal immigrants, as well as tighten up the borders – there has been little focus in the media upon the effects of the reduction of legal immigration. According to the Cato Institute, the reductions of legal immigration are approximately 2.5 times as large as the reduction of illegal immigration. For example, legal permanent visa issuance has been cut by about 50%. The focus of this column is not to argue whether we should be allowing more immigration, but rather how this reduction might affect the economy as a whole.

The Harvard University Joint Center for Housing Studies has indicated that Census Bureau data shows that the nation’s population growth has slowed sharply and this slower growth is fueled by a reduction in immigration together with lower birth rates. We have already seen evidence of slower population growth within the monthly employment data.  During the past 12 months the economy has added less than 40,000 jobs per month, a significant slowdown over previous years.  What is really telling is that the unemployment rate has not increased significantly. Why?  Because there is less population available to feed employment and unemployment growth.

Turning to the housing market, we have already seen early effects of a stagnant population in the form of the lack of skilled labor available to build new homes – which contributes to rising prices. The term stagnant can also be applied to the concept of mobility as the population has turned stagnant as they reside in their homes for a longer period of time. Looking at the long-term, lower population growth could potentially lead to lower demand for housing, initially for rentals but in the long-run within the purchase sector. This has the potential to wipe out the present housing shortage we have experienced. With the aging of the population and fewer younger people reaching working age, there will be even more pressure upon the social security system. Could these factors lead to a rise in the number of legal immigrants in the future? The possibility is certainly plausible.

Weekly Interest Rate Overview

The Markets. Mortgage rates rose in the past week as hostilities in the Middle East continued. The resumption of the conflict outweighed good inflation news because oil prices rose in reaction to the re-closing of the Strait of Hormuz. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.55% last week from 6.49% the previous week. In addition, 15-year loans also increased to 5.93%. A year ago, 30-year fixed rates averaged 6.75%, 0.20% higher than today. Attributed to Freddie Mac: “Purchase application demand has weakened recently, but housing affordability is more favorable, and housing inventory continues to rise, thus the backdrop for prospective homebuyers is modestly improving.” 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

Roughly 3 in 5 U.S. homeowners (59%) are very satisfied with their living situation, compared with 34% of renters. That is according to a survey commissioned by Redfin, and conducted by Ipsos, in May 2026.  Key takeaways from the survey include the fact that homeowners are more likely to love where they live, but overall, most renters report they’re at least somewhat satisfied with their living situation. Homeownership typically provides greater financial security: 62% of homeowners say they can easily afford their monthly housing payments, versus just 29% of renters. In addition, people who own their home also find contentment in putting down roots in their neighborhoods and customizing their houses. Even though homeowners are significantly more likely to love where they live, most renters report overall contentment. Nearly 7 in 10 renters (69%) say they’re either “very satisfied” or “somewhat satisfied” with their current living situation, as do nearly all homeowners (90%). On the flip side, just 5% of homeowners are dissatisfied with their living situation, compared with nearly 1 in 5 renters (18%).  Owning a home allows people to customize their space to their liking, and personalizing a home by decorating, painting, landscaping, or remodeling can foster emotional connections to where you live. Nearly three-quarters (74%) of homeowners say their current home is a reflection of who they are, compared with 46% of renters.  Source: Redfin

The NAR has released a report that examines how the fixed capital gains exclusion interacts with long-term home price growth and homeowner tenure. It documents the current level of capital gains exposure among U.S. homeowners and evaluates how that exposure could change under different price growth scenarios. The purpose is to provide a factual, data-driven assessment of the scale and distribution of exposure and to clarify how it may influence housing mobility and local market conditions. The capital gains exclusion was established in a housing market with lower prices, shorter ownership tenures, and less cumulative appreciation than exists today. Key findings of this report include the fact that filing status plays a significant role in determining when homeowners cross the exclusion threshold and with fixed thresholds, each additional dollar of home price growth expands capital gains exposure.  In addition, capital gains exposure is no longer limited to the highest-cost markets. As home prices rise, more states are seeing a growing share of homeowners approach or exceed the exclusion thresholds.  Capital gains exposure reflects when homeowners bought, not just where they live or how expensive the market appears today. Housing supply depends not only on new construction, but also on the willingness of existing homeowners to move.  Source: The National Association of Realtors

The nation’s housing shortage is often framed as a challenge for first-time buyers and growing families. But another group is increasingly feeling the impact — older homeowners who want to downsize yet find themselves with few practical options. Across the country, many seniors remain in large family homes long after their children have moved away. While aging in place is often portrayed as a lifestyle choice, housing professionals quoted in a Realtor.com article said many older Americans are staying put because moving no longer makes financial sense. “We have quietly created a generation of ‘lonely nests,’” said Wendy Newman, a Northern California–area real estate agent. “Many boomers aren’t choosing to age in place. They’re trapped there economically.”  For decades, downsizing offered retirees a chance to reduce housing expenses while moving closer to family or into a home better suited to their needs. Today, however, many smaller homes, condominiums and townhouses carry price tags that rival or exceed the value of longtime family residences.  As affordability challenges persist, multigenerational living is becoming an increasingly popular alternative. According to the NAR 2026 Home Buyer and Seller Generational Trends Report, 14% of buyers purchased a multigenerational home in 2025.  Redfin reported in March 2025 that nearly one in five Americans now live in multigenerational households.  Source: HousingWire

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With the signing of the “Memorandum of Understanding” things seemed to have quieted down in the Middle East. This was great news for the markets as immediately the price of oil and interest rates fell. And as we have mentioned previously, the stock market continued to perform well even when things did not look so rosy within the region. Of course, we all knew that the permanent road to peace would take some time and the road traveled ahead might contain several hiccups. But as long as oil and other goods were flowing through the Strait of Hormutz, the markets would continue to benefit.

Well, the path out of the strait is apparently not that straightforward, if you will excuse the pun. We were warned by analysts that it would take some time for things to get moving and it was understood that the reaction of the markets was in anticipation of better things ahead. Among other impediments was the fact that ships that were marooned within the strait for months had accumulated mussels and barnacles which had to be cleaned off. What we did not anticipate, but perhaps we should have, was the fact that shooting at the ships would occur – accompanied by escalating reprisals. Certainly, this occurrence has provided quite a deterrence to free and easy shipping.

What does all of this mean?  While we can hope for a favorable endgame that includes a permanent peace agreement, the road ahead is likely to continue to be bumpy. The markets’ initial reaction was very positive, so as reality sets in, we can expect some volatility in the markets as these bumps hit. But we expect that the consumers’ reaction during these times will be much more positive than when we were participating in an intense conflict.  Consumer confidence is the key with regard to keeping the economy, and especially the real estate markets, moving in the right direction during the summer months.  Let’s hope for a long, hot summer in this regard!

Weekly Interest Rate Overview

The Markets. Mortgage rates rose in the past week as hostilities in the Middle East reemerged after a quiet period. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.49% last week from 6.43% the previous week. In addition, 15-year loans also increased to 5.82%. A year ago, 30-year fixed rates averaged 6.72%, 0.23% higher than today. Attributed to Freddie Mac: “Mortgage rates have not changed much recently, but economic growth and housing affordability continue to improve for homebuyers as they shop for homes in today’s 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

Mortgage Research Network found that nearly 360,000 women under age 45 purchased homes on their own last year, representing 11.4% of all home purchase loans nationwide. The study analyzed purchase mortgages across the nation’s 50 largest metropolitan areas and found significant differences in where single women are most likely to become homeowners. The findings suggest affordability remains one of the strongest factors influencing homeownership opportunities for single-income borrowers. “Where women are buying on their own varies dramatically by market, and affordability appears to be one of the strongest drivers,” said Tim Lucas, lead analyst and report author at Mortgage Research Network. The report found that single women purchased homes at nearly twice the rate in the top-ranked metros compared with the lowest-ranked markets. Across the top five metropolitan areas, single female buyers accounted for an average of 15.8% of purchase mortgages, compared with just 7.6% across the bottom five.  While affordability helps determine where single women buy homes, income continues to play a significant role in who can enter the market. Across the highest-ranked metros, single female homebuyers earned substantially more than the typical single woman in their local market.  The study found that affordable markets in the South, Midwest, and Northeast dominated the rankings.  Source: National Mortgage Professional

Did you know there are more households with pets than children? And these beloved pets are a driver of economic activity, namely, home buying. About one-fifth of recent home buyers considered their pet when choosing a neighborhood, a share that increases among unmarried couples and single women buyers. According to the U.S. Census, the share of families with children under the age of 18 living in their home has continued to decline. The share of families with children under the age of 18 in 2024 stood at 39%, down from 52% in 1950. This is likely due to two reasons: Birth rates, overall, have been declining, and a large share of baby boomer households have already seen their children leave the nest.  This trend is also reflected among home buyers. In 1985, 58% of home buyers had children under the age of 18 in their homes. In 2024, just 27% of home buyers had a child under the age of 18 in their home. This is an all-time record low.  While the number of children in U.S. households has declined in the last 20 years, there has been a rise in pet ownership. According to the American Pet Products Association, 71% of American households own a pet. This is up from 56% in 1988. Given the increasing share of pets in households and the growing time and resources devoted to them, it is no surprise that many home buyers consider their pets the most important factor when making homebuying decisions. Factors such as proximity to a veterinarian and outdoor space for pets are important considerations for buyers with pets. Among all unmarried couples, 24% of home buyers considered their pet when deciding on a neighborhood in which to purchase, compared to 15% of married couples.  Source: NAR

A record 25.2 million adults under 35 lived with their parents in 2025, surpassing even the pandemic peak, as housing costs continue to price young adults out of independent living, according to a new Realtor.com® report. One in 3 adults under 35 now shares a roof with a parent, a rate that has held near its 2020 record high with little sign of easing. The numbers reflect the accumulated weight of more than a decade of housing underproduction, which has kept persistent upward pressure on housing costs. Had early-2000s co-residence patterns held, 4.86 million fewer young adults would be living with their parents today. The United States currently faces a deficit of approximately 4 million homes, a gap that has widened since the construction slowdown following the 2008 financial crisis. “The adults living with their parents today are largely employed, and many hold college degrees. What’s holding them back isn’t a lack of qualifications, but rather, at least in part, a lack of housing they can actually afford,” said Hannah Jones, Senior Economist at Realtor.com®. “This is a supply story, not an employment story.” The adults living with their parents in 2025 do not fit the stereotype. Among those aged 25 to 34, approximately 70% are employed. In 2000, roughly 1 in 9 adults in their late 20s were both employed and living at home; by 2025, that ratio had grown to nearly 1 in 7, even as employment rates within the group held steady. The divergence points directly at housing costs, not labor market conditions. Roughly 9 in 10 adults aged 25 to 34 living with parents have never been married, up from 79% in 2000.  “Twenty-five million adults living with their parents represent a generation of latent demand the market hasn’t absorbed,” said Jones. “Every adult still in a childhood bedroom is a household not formed, a lease unsigned, a starter home unpurchased.” Source: PR Newswire

The post July 14, 2026 – Getting The Story Strait appeared first on Starwest Mortgage Corporation.

The year 2026 has certainly been an eventful one and, believe it or not, we are only half-way through. Who knew that we would spend several months of our 250th anniversary year in a conflict over 6,000 miles away. That conflict had significant economic implications as prices for energy and other goods accelerated as shipping was interrupted for the duration of the conflict. This situation almost made us forget that we had plenty of economic uncertainty due to the on-again, off-again, on-again tariff debate.

And last week we received evidence of how the economy performed during the first half of the year in the form of the June jobs report.  During the month of June, the economy created 57,000 jobs.  In addition, the previous two months of jobs gains were revised downward by 74,000 jobs.  According to the Bureau of Labor Statistics (BLS), the economy has added just over 400,000 jobs during the past year, or an average of 36,000 jobs per month.  These numbers are subject to revision over the following two months.

The unemployment rate eased to 4.2% last month as the labor force participation rate fell and wages increased by 0.3% on a monthly basis. Wages also increased 3.5% year-over-year. Wage inflation is especially important at this juncture because of the recent increase in the inflation due to the aforementioned conflict.  When the Federal Reserve met a few weeks ago, there was plenty of speculation regarding possible interest rate increases during the second half of the year.  Hopefully as the effects of the conflict subside, the pressure will wane in this regard.  Overall, the jobs report was seen as a lukewarm report to end the first half of the year and may ease pressure on the Fed to raise rates in the coming months.

Weekly Interest Rate Overview

The Markets. Mortgage rates eased moderately in the past week as the markets continued to experience day-to-day volatility.  According to the Freddie Mac weekly survey, 30-year fixed rates fell to 6.43% last week from 6.49% the previous week. In addition, 15-year loans also decreased to 5.79%. A year ago, 30-year fixed rates averaged 6.67%, 0.24% higher than today. Attributed to Freddie Mac: “The 30-year fixed-rate mortgage eased slightly this week averaging 6.43%. With rates at a seven-week low and purchase demand continuing to edge higher, it’s an encouraging sign as prospective homebuyers respond to modest improvements in affordability.” 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

A recent NAHB analysis found that fewer older homeowners are choosing to transition out of their homes or downsize, a trend known as the “silver tsunami.” This shift is limiting the expected wave of housing stock released, affecting the availability of homes for new buyers. A majority (79%) of the members of the Boomer and Silent generation, U.S. adults 65 years or older, are homeowners and currently own more than a third (34%) of owner-occupied housing units in the U.S. “As older Americans stay in their homes longer, the silver tsunami phenomenon won’t solve the housing shortage on its own; therefore, expanding the housing supply becomes more urgent, not less,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. “We must create pathways for all generations who aspire to achieve homeownership by reducing barriers to housing attainability.” An NAHB analysis found that the “silver tsunami,” which generally releases housing stock, varies sharply by region. Coastal metros and popular retirement areas have both high shares of older households and a lower number of young adult households. NAHB also found that older homeowners tend to live in some of the most supply-constrained markets.  Another complicating factor of the silver tsunami narrative is the age of the housing stock held by older homeowners. In the top 100 metro areas, markets with larger shares of older homeowners also tend to have older housing stock. These homes are unlikely to be direct substitutes for newer construction, as when they enter the market, many may require significant renovation and, in some cases, redevelopment.  Source: NAMB

When real estate agents around the country describe housing market conditions where they are, their stories are increasingly unique to their particular areas. It’s a big shift – a return to the “all real estate is local” reality that held true up until the subprime bubble of the early aughts made everyone followers of a national housing market narrative. “There is no national market anymore at all,” said Selma Hepp, chief economist for real estate data firm Cotality.  “It’s all about locality, right? It’s sort of slow and steady on the national level, but there’s a lot going on when you look under the hood.”  In a recent report, Hepp wrote that “the national trend hides a complex and increasingly fractured regional landscape.”  Toni Moss, founder of housing consultancy EuroCatalyst, was one of the early analysts who called the subprime bubble decades ago. Moss agrees that trends in globalization and housing are reverting from the national and international stage to the local. Buyers and investors will increasingly have to weigh not just local job markets or weather or amenities, but also how safe those areas may be from natural disasters and regional disruptions. As the federal government increasingly cedes disaster relief to states and localities, Moss thinks that the burden of managing risk is “incrementally moving local – to regional and statewide levels, and to city and community levels,” she told USA Today.   Source: USA Today

Only 30% of Americans know their neighbors beyond a casual level, according to a new Rocket survey. Despite this, Americans value the importance of strong community, with nearly 80% saying strong neighborhoods improve their quality of life. 50 years ago, neighborhoods were the center of belonging, culture and identity, with 80% of Americans saying they were once places where people naturally connected. Today, that dynamic has dramatically shifted, with hesitation emerging as the most prominent barrier to connection. Four in 10 (41%) say knocking on a neighbor’s door feels too bold, while 22% say they feel awkward making the first move. “We have tools at our fingertips that connect us with anyone on the planet, but we don’t know the person next door,” said Sarah Tarraf, Senior Vice President of Knowledge & Data Insights at Rocket. “At the heart of this paradox is something very basic. People want connection, but they fear being intrusive and being rejected. Americans are ready to be better neighbors. They just want someone to lead the way.” Only 17% of Americans say they intentionally seek out neighborly interactions, yet 68% report receiving support from a neighbor in the past year. The data suggests that while people may not actively pursue connection, they still show up when it matters – 58% say they would turn to a neighbor in an emergency, and 65% feel comfortable offering help. Nearly 42% of Americans say people in their neighborhoods tend to keep to themselves. Part of that shift may be tied to the decline of traditional “third spaces” – neighborhood spots like restaurants, parks and libraries where connection once happened naturally.  Source: MP Daily

The post July 7, 2026 – The First Half of the Year Comes to a Close appeared first on Starwest Mortgage Corporation.

We started the month of June in something we described as akin to a June gloom. Oil prices and interest rates were higher and the real estate market had softened.  We also said that June glooms in California are typically replaced by a sunny and hot July.  We asked if our June gloom could be such a precursor.  Well, we think that it is apropos that we move into July celebrating the country’s 250th anniversary.  We can think of no better time to witness a turnaround that could propel the economy upward during the second half of the year.

This country was built upon the premise that people could come to our country attracted by the availability of land. Land which was not accessible in their home countries.  For generations, Americans have built their wealth upon this land. And today, real estate remains the primary builder of wealth for the average American with nearly 70 percent of households owning real estate.  And for the vast majority of these owners, their real estate has become their most important asset, as well as their home. It is interesting to read coverage in the media that ownership has lost its luster in the short run. However, in the long run ownership is always a primary piece of the America dream.

We enter July with pride regarding our 250th anniversary.  But also, with the recognition that interest rates have fallen off their highs as the situation in Iran, while not resolved, has calmed down significantly.  While we are not expecting a 180-type turnaround, we move into the second half of the year hopefully shifting in the right direction. This week we will see the June’s employment numbers. Thus far the second quarter has seen an improvement in terms of the number of jobs added. A decent report would help with regard to building momentum as those who are working are the ones who are more likely to be on the hunt for real estate.  Meanwhile, happy anniversary America!

Weekly Interest Rate Overview

The Markets. Mortgage rates rose slightly in the past week as the situation in Iran was calmer while negotiations progressed.  According to the Freddie Mac weekly survey, 30-year fixed rates rose slightly to 6.49% last week from 6.47% the previous week. In addition, 15-year loans also increased to 5.84%. A year ago, 30-year fixed rates averaged 6.77%, 0.28% higher than today. Attributed to Freddie Mac: “The average 30-year fixed mortgage rate was little changed this week at 6.49%. Rates have remained relatively stable over the last six weeks. Meanwhile, purchase activity eased modestly, and refinance activity has continued to pick up recently, reflecting borrowers’ responsiveness to current rate levels.” 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

A recent NAHB analysis found that fewer older homeowners are choosing to transition out of their homes or downsize, a trend known as the “silver tsunami.” This shift is limiting the expected wave of housing stock released, affecting the availability of homes for new buyers. A majority (79%) of the members of the Boomer and Silent generation, U.S. adults 65 years or older, are homeowners and currently own more than a third (34%) of owner-occupied housing units in the U.S. “As older Americans stay in their homes longer, the silver tsunami phenomenon won’t solve the housing shortage on its own; therefore, expanding the housing supply becomes more urgent, not less,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. “We must create pathways for all generations who aspire to achieve homeownership by reducing barriers to housing attainability.” An NAHB analysis found that the “silver tsunami,” which generally releases housing stock, varies sharply by region. Coastal metros and popular retirement areas have both high shares of older households and a lower number of young adult households. NAHB also found that older homeowners tend to live in some of the most supply-constrained markets.  Another complicating factor of the silver tsunami narrative is the age of the housing stock held by older homeowners. In the top 100 metro areas, markets with larger shares of older homeowners also tend to have older housing stock. These homes are unlikely to be direct substitutes for newer construction, as when they enter the market, many may require significant renovation and, in some cases, redevelopment.  Source: NAMB

If there’s room for agreement on anything in Washington, it’s that lawmakers need to do something to make homeownership more affordable. Last week Congress passed the largest piece of housing legislation in decades. The bill is titled the 21st Century Road to Housing Act. In an interview with NPR, Sen. Elizabeth Warren, a co-sponsor of the bi-partisan bill, said housing affordability has become a priority for Congress. “Every time every member of Congress goes back home they hear how urgent it is to bring down home prices. And that’s what the bill does,” she said. But the main issue this bill tries to address is that the U.S. does not have enough houses to keep up with demand. Realtor.com estimated that last year the U.S. was short by more than 4 million housing units. “Supply is the key problem here,” said Jeanna Kenney, assistant professor of economics, finance and real estate at Villanova University. “Anything you can do to make supply easier is going to be helpful in the long term.” Rather than making a single change, the bill is a hodgepodge of provisions designed to either encourage housing construction or make it easier for home seekers to buy. One part of the package is a ban that prevents corporate investors from buying up more single-family homes to rent out. If one of those groups already owns at least 350 houses, they won’t be able to buy others.  While the legislation doesn’t provide new federal dollars for homebuilding, it streamlines some of the regulations homebuilders must follow in order to get existing federal financing. For example, it allows builders to skip the environmental review when a housing project is going up between two buildings that already went through the process.  Another is aimed at making manufactured homes more affordable by getting rid of the rule that those houses must have a permanent chassis, or a steel frame that makes them moveable. Source: NPR – Note: As of Friday, the President had not signed the bill.

Only 30% of Americans know their neighbors beyond a casual level, according to a new Rocket survey. Despite this, Americans value the importance of strong community, with nearly 80% saying strong neighborhoods improve their quality of life. 50 years ago, neighborhoods were the center of belonging, culture and identity, with 80% of Americans saying they were once places where people naturally connected. Today, that dynamic has dramatically shifted, with hesitation emerging as the most prominent barrier to connection. Four in 10 (41%) say knocking on a neighbor’s door feels too bold, while 22% say they feel awkward making the first move. “We have tools at our fingertips that connect us with anyone on the planet, but we don’t know the person next door,” said Sarah Tarraf, Senior Vice President of Knowledge & Data Insights at Rocket. “At the heart of this paradox is something very basic. People want connection, but they fear being intrusive and being rejected. Americans are ready to be better neighbors. They just want someone to lead the way.” Only 17% of Americans say they intentionally seek out neighborly interactions, yet 68% report receiving support from a neighbor in the past year. The data suggests that while people may not actively pursue connection, they still show up when it matters – 58% say they would turn to a neighbor in an emergency, and 65% feel comfortable offering help. Nearly 42% of Americans say people in their neighborhoods tend to keep to themselves. Part of that shift may be tied to the decline of traditional “third spaces” – neighborhood spots like restaurants, parks and libraries where connection once happened naturally.  Source: MP Daily

The post June 30, 2026 – July Celebration appeared first on Starwest Mortgage Corporation.

Last week we had the first meeting of the Federal Reserve Board’s Open Market Committee under a new Chairman – Kevin Warsh.  Though Kevin Warsh replaces Jerome Powell as the Chairman, Powell still remains a Board of Governor as his term does not expire until early in 2028.  Expecting big changes in the direction of interest rates due to the leadership of a new Chairman?  The first meeting resulted in no change in the Fed’s benchmark interest rate, which was expected.

The statement released by the Fed was simpler and featured the removal of language regarding future projections. But included in this simplified format was the removal of the bias towards lowering rates. Though the decision not to change rates was unanimous, the market read the atmosphere as leaning towards future rate increases based upon recent inflation trends. We will find out more about the tone of the meeting when the minutes are released in a few weeks.  But generally, those who are expecting immediate relief from high interest rates are likely to be disappointed.  There are generally two reasons for this likelihood. 

First, Chairman Warsh has indicated a preference for shrinking the Fed’s $6.7 trillion dollar balance sheet. This activity is known as quantitative tightening and can put upward pressure upon interest rates. Secondly, it is not likely that the Fed will be disposed to lower interest rates anytime soon due to the fact that inflation is currently elevated. The recent strong jobs report gives the Fed room to stay neutral at this juncture because the economy is showing no signs of slipping into a recession.  Of course, geopolitical events in places such as Iran could always alter this scenario.

Weekly Interest Rate Overview

The Markets. Mortgage rates fell slightly in a very volatile week influenced by the Iran “agreement” and the Fed meeting.  According to the Freddie Mac weekly survey, 30-year fixed rates eased to 6.47% last week from 6.52% the previous week. In addition, 15-year loans also decreased to 5.81%. A year ago, 30-year fixed rates averaged 6.81%, 0.34% higher than today. Attributed to Freddie Mac: “The 30-year fixed-rate mortgage decreased this week averaging 6.47%. Incoming data continues to reflect a resilient consumer, with retail sales improving and pending home sales strengthening, suggesting purchase demand is continuing to modestly improve.”  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

For parents, helping a child buy their first home used to be a question: Should you step in, or should they do it on their own? But after years of first-time buyers being priced out, a new consensus seems to be forming: If you can help, you probably should. Nearly three-quarters of parents with children at home (74%) say they would consider or have already started financially planning to help their kids buy a home one day, according to a recent Northwestern Mutual survey. For cash-rich parents, that help may come through “giving while living”—passing liquid assets to children now, rather than waiting for an inheritance later. The practice is already having a measurable effect on the housing market. In 2025, 22% of first-time buyers said they used a gift or loan from a friend or relative for their down payment, according to the National Association of Realtors®. But not every parent has a large pile of cash to hand over. What many do have, however, is home equity. And that raises a more complicated question: Should parents use the value they’ve built up in their own home to help their child buy one of their own? As Jacob Dayan, managing partner at Dayan Capital LLC, puts it, the decision has two parts: “First, how do you obtain the money, and second, how do you transfer the money?”  Dayan says parents typically have three main ways to pull money from their home: a home equity loan, a home equity line of credit, or a cash-out refinance. Part of parents’ decision on how to protect their home equity is how to transfer funds once they tap them. Dayan says families generally have two options: a documented gift or a documented intrafamily loan. A gift is often the simpler route, especially if the goal is to help a child with a down payment or closing costs without adding another monthly obligation. But larger gifts can come with tax-reporting considerations, so parents should speak with a tax adviser before moving money. An intrafamily loan can make sense if parents want the child to repay them over time. But it should be treated like a real loan, with written terms, a repayment schedule, and an interest rate that satisfies IRS rules.  Source: Realtor.com

The median age of first-time homebuyers hit a record high of 40 last year, according to data from the National Association of Realtors. To make housing more affordable, some people are embracing a nontraditional path to owning a home: co-buying with a friend. “This is a new and interesting way to get into real estate,” says Brett Humphrey, CEO of Joynt, a platform that helps people buy and manage property together. “I firmly believe this is a viable way to get into the housing market.” Six in 10 renters say they are open to the idea of purchasing a home with a friend, according to a survey of nearly 2,000 renters conducted by Rocket Mortgage. Of those, 64% say affordability is what drives them to consider this route. About two-thirds of those who would buy a home with a friend are from the Gen X and millennial generations, perhaps signaling that middle-aged Americans are tired of waiting for the time when they can afford a house on their own.  Here’s what you should know if you want to buy a house with a friend:

• You should fully disclose all your finances first.
• It’s smart to rent together before buying together.
• There should be a written agreement for shared expenses, taxes and house rules.
• Having an exit strategy in place before making the purchase is essential.
• Both applicants’ financial information will be reviewed.
• You can buy a house as an LLC, although mortgage options may be limited. Source: US News and World Report
•  

Existing-home sales increased by 0.2% month-over-month in April, according to the National Association of REALTORS® Existing-Home Sales report. The report provides the real estate ecosystem—including agents, homebuyers and sellers—with data on the level of home sales, price, and inventory. “Despite mixed macroeconomic signals—including a record-high stock market and historically low consumer confidence—home sales were modestly boosted by the continued improvement in housing affordability,” said NAR Chief Economist Dr. Lawrence Yun. “Mortgage rates are lower from a year ago, and average income growth is outpacing home price gains.” “Inventory still remains tight,” Yun added. “Multiple offers, though not as intense as a few years ago, are still occurring. At the same time, days on market are lengthening on average, implying that consumers are taking their time before making decisions.”  Source: NAR

The post June 23, 2026 – The New Look Fed appeared first on Starwest Mortgage Corporation.

We have been on a very consistent merry-go-round this year and it all revolves around the conflict in Iran. It seems like every few days we are close to a breakthrough, but then we hear reports of missiles landing. And even the reports of a breakthrough are conflicting as we hear of an agreement which is really an extension of the pact to temporarily halt hostilities – which has limited but not eliminated the hostilities. One side says we are close, the other says we are not there.  This increases confusion and uncertainty.

One thing the markets do not like is increased levels of uncertainty.  And we have seen the markets reacting to this uncertainty in different ways. The most severe reaction has been seen in the volatility of oil prices as the supply of oil travelling through the Strait of Hormuz has fallen dramatically. The price of oil has increased significantly, yet it falls every few days on reports of this elusive breakthrough. The higher price of oil causes higher inflation which in turn has raised interest rates, a major factor affecting the real estate market.

One sector which has been incredibly resilient has been the stock market. While stock prices fell initially due to the news surrounding the conflict, stock indices have not only recovered these losses, they have also added further gains. While oil prices and interest rates have been riding the merry-go-round, stocks have taken the escalator.  While analysts fret about an inflation fueled recession, apparently stock investors are not too worried. Should we take a clue from the stock market and perceive that better times are right around the corner?  The Fed meets today and it is their first meeting with a new chairman. Most believe that current elevated inflation rates will keep the pause on rate decreases going for quite some time.

Weekly Interest Rate Overview

The Markets. Mortgage rates rose slightly in the past week as events in Iran continued to dominate the headlines.  According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.52% last week from 6.48% the previous week. In addition, 15-year loans also increased to 5.84%. A year ago, 30-year fixed rates averaged 6.84%, 0.32% higher than today. Attributed to Freddie Mac: “Stronger employment momentum has helped existing home sales reach a five-month high. Importantly, homebuyers are looking past the short-term rate fluctuations and actively entering the market, signaling renewed confidence in homeownership opportunities.” 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 same generational shifts reshaping the housing market are changing something even more foundational to American life: driving. It’s well known that younger adults are delaying homeownership under intense affordability pressure. What’s less discussed is that they’re also delaying car ownership and driving less overall. Meanwhile, as more Americans age in place, a growing number of older adults are expected to age out of driving, raising urgent questions about mobility and independence. That quiet retreat from the driver’s seat could have major consequences for the future of housing. Even as demand grows for neighborhoods where daily life can be lived on foot or by transit, most new homes are still being built for a lifestyle that assumes a car is not only desirable but also required. Vehicle miles traveled per capita have declined 2.3% since 2019, according to data from the Federal Highway Administration. And today, the average American drives nearly 5% less than they did two decades ago—proof that the slow fade of car dependency was already underway even before the COVID-19 pandemic rewired daily routines.  The trend is especially sharp among younger adults. From 2001 to 2017, vehicle travel among this group dropped 19%, nearly double the decline seen in their older peers. From 2017 to 2022, the shift accelerated even more dramatically: Daily trips among young adults fell nearly 50%, according to research from UCLA.  And while turning 16 used to be synonymous with a trip to the DMV, it no longer is today. Only 1 in 25 licensed drivers is 19 or younger, a marked decline from a decade ago, according to data from the Department of Transportation. Online shopping, remote work, and the rise of streaming services are all seen as playing a role in these trends.  Fewer willing drivers introduces a huge question for the housing market: Where will these nondrivers live? Transit-oriented development (TOD) is one solution.  TOD is almost exactly what it sounds like: housing and land use designed around transit, to create compact, walkable communities where people can get around without relying on a car.  Source: Realtor.com

A small but growing share of Gen Zers managing to buy a home despite historically unaffordable prices, and when the average age of first-time buyers has climbed to 40. They are outpacing millennials, many of whom also struggled to buy at the same age. They’re less likely to use help from parents and far more likely to be single buyers, especially women. “Gen Zers seem to have learned from millennials,” said Jessica Lautz, deputy chief economist at the National Association of Realtors, which tracks buying trends. She also credits their use of social media for financial planning. “They’re embracing the knowledge that is at hand.”  The rise in the youngest homeowners is noteworthy because of the odds stacked against them. A massive housing shortage has pushed prices to record high unaffordability for both renters and owners. People in their 20s remain a sliver of buyers overall, but they’re growing. The National Association of Realtors found last year 4% of homebuyers were Gen Z, up from 3% the year before. Overall, Gen Z homebuyers had an average household income of $76,000 dollars, according to the Realtors association. And they are financially savvy.  “They’re taking advantage of government [down-payment assistance] programs at higher rates than all other generations,” said NAR economist Lautz. “They seem to be a little more reticent when it comes to student loan debt, which has historically been one of the biggest hurdles for millennials to enter into homeownership.”  Also, the share of single Gen Z buyers is double that of millennials at the same age. “I asked around the office to try and understand what’s happening here and I was reminded, COVID,” Lautz said. “So. I think perhaps delays in getting marriage started, and partners started, could be one of the things going on here for these young adults.”  Source: WAMU 88.5/NPR

Buyers of newly built homes save an average of $25,335 over the first 10 years of ownership compare to buyers of 20-year-old homes. That’s according to new research from Realtor.com, which said the savings are driven by lower energy bills and fewer major repairs. “Homeownership is not a one-time expense, and the ongoing costs of owning a home are where new construction really shines,” said Joel Berner, senior economist at Realtor.com®. “Buyers who focus only on the listing price are missing a significant part of the financial picture.” Realtor.com said the findings show a wide geographic divide, with states in New England offering the greatest advantage and Southern states the least. It identifies 16 metros where a decade of savings from new construction fully erases the price gap with existing homes. New construction savings come in two forms, Realtor.com said — lower utility costs from more energy-efficient construction, and delayed replacement of major systems such as HVAC, roofs, and water heaters.  To help buyers see these savings in action, Realtor.com said it is introducing interactive total cost of ownership content through a dedicated cost of ownership hub and experience on new construction listings, showing personalized 10-year savings estimates on utilities, roof replacement, HVAC, and water heater costs compared to a comparable resale home. Source: MP Daily

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