If you are a member of the Federal Reserve Board’s Open Market Committee, you can surely understand that things never seem to go as planned.  Certainly, the pandemic was not expected — and neither was the sharp rise in worldwide inflation which accompanied the recovery from the pandemic. As that was happening the war in Ukraine took center stage. While the inflation rate was recovering from all this, we got hit with another great unknown – the implementation of tariffs which had the potential to temporarily reignite inflation.

And just as we were finding out how tariffs were going to affect inflation, they were struck down by the Supreme Court and implemented in through another avenue which remains in question.  Enough curves for you in just six short years?  Just to make sure that there was enough twist and turns we get hit with an all-out conflict in Iran over several weeks. This was followed by a cease fire, and peace talks which wound up being extended. Regardless of the result of these talks, the conflict had an immediate and severe impact on the price of oil, thus igniting our inflation stats for the month of March.

Today the Fed meets with this concern to consider — is the spike in oil a temporary phenomenon which will dissipate immediately after the conflict, or will increased inflation seep through the economy as the price of other goods rise?  Some analysts are concerned that the Fed will consider increasing rates as a result of these fears. Maybe not today, but sometime in the future.  To further complicate things, the economy is likely to slow down as higher gas prices have the potential to depress consumer spending. On the other hand, increased defense spending is likely to provide a boost to the economy in the long run. There is one thing for sure, we would not want to be a member of the Fed in this environment as they face very precarious concerns without appropriate “fiscal” solutions.

Weekly Interest Rate Overview

The Markets. Mortgage rates continued their recovery from their spike upwards following the start of the Iran conflict. According to the Freddie Mac weekly survey, 30-year fixed rates fell to 6.23% last week from 6.30% the previous week. In addition, 15-year loans decreased to 5.58%. A year ago, 30-year fixed rates averaged 6.81%, 0.58% higher than today. Attributed to Freddie Mac: “The 30-year fixed-rate mortgage declined again this week. Rates currently stand at their lowest level in the last three spring homebuying seasons. This improvement, coupled with a pickup in purchase applications and refinance activity, as well as an increase in monthly pending home sales, underscores signs of improving momentum in the 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

The latest housing data tell a nuanced but encouraging story about women and homeownership. In 2025, more than 20 million single women owned homes — the highest number on record. Yet the homeownership rate among single women edged down from 51.9 percent to 50.9 percent. At first glance, that modest decline may appear to signal a setback. A closer look reveals something different: even in a challenging affordability environment, more single women became homeowners. The key is understanding what the homeownership rate measures. It reflects the share of households that own their home. While the number of single women homeowners increased modestly from last year, the total number of single-woman households grew even faster. Household formation among women outpaced ownership growth, resulting in a dip in the rate. In other words, the rate softened not because fewer women owned homes, but because more women formed independent households. The continued growth in single, female-headed homeowner households reflects broader demographic and economic shifts that have been building for years. Women have increasingly pursued higher education, and higher educational attainment is closely linked to stronger earnings potential and greater likelihood of homeownership. The share of single women with a bachelor’s degree or higher has risen from 20 percent in 2000 to 35 percent in 2025, expanding the pool of financially prepared buyers. Income growth has reinforced that trend. Real median household income among single women has increased from $42,000 in 2000 to $51,000 in 2025 (in 2025 dollars), improving purchasing power over time. While affordability remains strained relative to historical norms, these structural gains in education and income provide a durable foundation for homeownership.  Survey findings help explain why women continue to pursue homeownership in greater numbers. According to a recent National Association of Realtors study, single women remain a growing and influential segment of the home-buying population. They account for a larger share of purchases than single men and cite stability as a key motivation.  Source: First American

RentCafe has identified 90,300 apartment units in the process of conversion from offices. That’s up 28% from a year earlier, setting another record. It’s also nearly four times more than in 2022. Office conversions account for almost half of all future adaptive reuse projects nationwide, at 47%. That’s up from 42% last year. There are 193,900 planned projects in the pipeline. Of the remaining projects, 18% are from hotels, 16% are from industrial properties, and healthcare facilities, schools, retail and government buildings make up 19%. “COVID-19 is to the office market what e-commerce was to retail. As a result, there is simply too much office space in the market right now,” observed Peter Kolaczynski, director of Yardi Research (RentCafe’s parent company). In early 2025, the national office vacancy rate was around 20% and the physical occupancy in many buildings was around 50-55%. And, one-third of U.S. office loans are set to mature by 2027, so owners are under pressure to figure out how to deal with underperforming properties. “A massive amount of office building loans–over $213 billion–are coming due by the end of 2026. When loans mature, borrowers need to either pay them off or refinance them. The problem is that many of these office buildings have lost significant value largely due to remote work trends reducing demand,” said Doug Ressler, senior analyst and manager of business intelligence for Yardi Matrix. However, many office-to-apartment conversions take a few years to complete, slowed by structural constraints, construction costs, financing issues and regulatory requirements.  The types of office buildings being converted into homes have also changed. Newer offices between the 1990s and 2010s make up 2% of completed projects but account for 6.4% of future conversions.  Source: The Mortgage Bankers Association

From 2020 to 2024, new construction added nearly 3.6 million owner-occupied homes, accounting for only 4% of total owner-occupied housing stock as of 2024. Relatively newer homes built between 2010 and 2019 made up around 9% of the stock, while those constructed between 2000 and 2009 constituted 15%. In contrast, around 47% of the owner-occupied homes were built before 1980, including around 34% built before 1970.  The median age of owner-occupied homes climbed to 42 years old in 2024, up from 31 in 2005 according to the latest data from the American Community Survey. The share of relatively newer owner-occupied homes (those built within the past 14 years) has declined greatly, from 18% in 2014 to only 13% in 2024. Meanwhile, the share of older homes that are at least 45 years old has increased significantly, rising from 39% in 2014 to 47% in 2024. This shift further reflects the ever-aging stock of homes in the U.S., highlighting the growing opportunities within the remodeling sector to address the needs of homeowners.  Source: The National Association of Home Builders

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Just a few more weeks. That is the message we have heard from the Administration for several weeks. If we assume this will be the case (give or take a few weeks), then we must ask this follow-up question—how long will it take to recover? We understand that it could take years for the recovery of the physical and psychological damage of war.  And we are not discounting these extremely severe factors. But our focus in this newsletter is upon the economic factors.

On the surface, the economic effects of war are obvious.  We have seen a sharp rise in the price of oil, a concurrent rise in mortgage rates and a drop in the value of the stock market. Additional factors are beneath the surface but are also easy to surmise. The price of oil has the ability to exacerbate the overall inflation rate – including gas, food, plastic and additional commodities. Additional defense spending will escalate government borrowing, which in turn could place additional pressure on interest rates. Higher interest rates have the potential to affect the real estate market.

Will these factors just reverse themselves automatically after the hostilities cease? Not likely. Some factors might rebound quickly, such as confidence in the stock market.  Other factors will take more time such as the calming of inflation. Still additional factors might depend upon the conditions which will prevail after the hostilities cease. For example, will shipping lanes reopen promptly and completely?  It is not just oil which moves through these conduits.  The entirety of these factors will be on the plate as the Federal Reserve meets next week. And because most of these questions cannot presently be answered, most market analysts are expecting the Fed to keep rates steady in a wait and see approach.

Weekly Interest Rate Overview

The Markets. Mortgage rates continued to decline in the past week as the conflict negotiations have brought hope for a settlement. According to the Freddie Mac weekly survey, 30-year fixed rates fell to 6.30% last week from 6.37% the previous week. In addition, 15-year loans decreased to 5.65%. A year ago, 30-year fixed rates averaged 6.83%, 0.54% higher than today. Attributed to Freddie Mac: “Mortgage rates declined this week to a four-week low of 6.30%. Compared to one year ago when rates were at 6.83%, this is a meaningful improvement for homebuyers during what is typically the busy spring homebuying season.” 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

How long does it take borrowers to achieve “very good” credit? And how much could borrowers save over the life of their loan? Those questions are the subject of a study released by AD Mortgage. The report from the Florida-based lender combines publicly available data with modeling scenarios to estimate how long it takes to improve credit to a 760 FICO score — Fair Isaac Corp.’s benchmark for “very good” credit, based on tiers used in the myFICO Loan Savings Calculator. In most states, it requires between 18 months and three years to reach a 760 FICO score, the study found. The fastest states to reach 760 on average, based on AD Mortgage’s estimates, are Minnesota, Wisconsin and Vermont at 0.9, 1.1 and 1.15 years, respectively. “This new data underscores just how critical credit education and early financial preparation are for today’s homebuyers,” stated Max Slyusarchuk, CEO of AD Mortgage, in the report. “A difference of 20 or 30 FICO points may seem small, but over the life of a mortgage, it can determine whether a borrower pays an extra $20,000 in unnecessary interest. Our goal with this report is to give lenders, brokers and consumers actionable insight into how credit impacts true buying power.”  According to the report, savings resulting from reaching the higher credit score threshold range from about $9,500 to $46,000 over the life of the loan.  The analysis used the average credit score as reported by Experian in September 2024. Calculations assumed a 30-year fixed-rate mortgage with a 15% downpayment — a national median figure AD Mortgage said was derived from the 2025 National Association of Realtors Home Buyers and Sellers Generational Trends Report.  Source: Scotsman Guide

As rising home prices continue to keep conventional buyers on the sidelines, Americans could benefit from returning to a well-trodden path to homeownership: manufactured homes. Manufactured housing now offers one of the most affordable and accessible entry points into the housing market, according to a Realtor.com report. House hunters in February could have picked up a mobile home for $141,450, the median list price. This is down 5.7% YOY and significantly more affordable than the median single-family home price of $410,000. At that price, with a 6% 30-year fixed-rate and 20% down payment, homeownership would only put families back $678 a month. “Mobile homes offer a unique opportunity to build equity with a significantly lower monthly housing payment. For those who prioritize flexibility and lower cost burdens, the current price dip in the mobile home sector provides a compelling window to move from renting to owning,” said Joel Berner, senior economist at Realtor.com. With median rents currently running $1,667, a manufactured home could help a large swath of Americans save money and provide an equity safety net for the future.  Popular in the 1990s, the share of factory-built houses declined in the lead-up to the Great Recession as site-built construction exploded in the early 2000s. They now account for about 10% of new housing, while the approximately 7.2 million occupied pre-fabs in the U.S. make up 5.4% of total lived-in homes.  Source: Realtor.com

The stand-off between aspiring homebuyers and well-positioned homeowners has forced young families into small homes while empty nesters remain in large houses. That’s according to a new Redfin analysis, which found that baby boomers with no children own 28% of three-bedroom or larger homes. That number jumps to 35% for households with three or more adults. Meanwhile, millennials with children own just 16% of big houses. The report notes that the issue might not reflect stingy boomers refusing to move. Many parts of the U.S. don’t have enough small, affordable houses for aging Americans, making downsizing unattractive. “I hear empty nesters say they want to downsize, but it’s hard to find move-in ready, small, one-story homes or condos in their price range—especially since many of them are living in a fully paid-off home,” said Brenda Beiser, a Philadelphia-based Redfin agent. For many boomers, though, there’s simply no reason to make a major life change. With almost 60% having already fully paid off their mortgages, remaining in the neighborhoods they call home, often near friends and family, makes more sense than upending their lives. Most (60%) of older adults surveyed by Pew Research said they would like to stay in their homes and have someone care for them as they age. Inventory is slowly increasing. Existing-home listings were up 2.4% in February, and builders continue to funnel new construction onto the market.  Source: The Mortgage Note

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There is no doubt that the war with Iran has caused damage to the economy.  Higher mortgage rates and oil prices coupled with a falling stock market and waning consumer confidence represent a lousy combination. In addition, the government is now accelerating spending which is going to have a negative effect on the federal budget deficit in the long term. The good news is that many of these factors are temporary. There is a chance that as soon as the conflict is resolved, we may very well see a fairly rapid recovery within many of these segments of the economy.

The fragile ceasefire which started last week gave us an indication of the markets’ potential resiliency.  Of course, the longer the conflict goes on, the longer the recovery is likely to take. Thus, we are all rooting for a conflict with a quick resolution. But at this point we can no longer label the timeframe as extremely brief.  On the other hand, the timeframe is not yet considered protracted by any means. There is a big difference between a few months and years of fighting. If you look at the market’s reaction to the Ukraine war, there was a recovery which took place over time as the markets adjusted to the fact that the war was not spreading to other countries, even though it has continued for years.

Regarding the real estate sector, initially we have not seen major negative implications. Certainly, higher interest rates are not ever welcome within the sector. But when rates rise initially, this factor often tends to attract prospects that were waiting for mortgage rates to fall. The longer interest rates stay elevated, the more likely the market will be affected adversely. Obviously, the refinance spigot tends to turn off more quickly, which we have already seen. The purchase side of the market is one sector which has the potential to rebound quickly if mortgage rates come back down as the conflict abates. Let’s hope for a quicker resolution and a return to falling rates.

Weekly Interest Rate Overview

The Markets. Mortgage rates eased a bit for the first time in several weeks as hope grew for a resolution with Iran. According to the Freddie Mac weekly survey, 30-year fixed rates fell to 6.37% last week from 6.46% the previous week. In addition, 15-year loans decreased to 5.74%. A year ago, 30-year fixed rates averaged 6.62%, 0.25% higher than today. Attributed to Freddie Mac: “Mortgage rates ticked down this week, averaging 6.37%. The decrease in rates represents a positive development for prospective homebuyers and could spark a more favorable spring homebuying season than last year.” 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

Annual spending on improvements and maintenance to owner-occupied homes is expected to gradually slow through 2026, according to the Joint Center for Housing Studies of Harvard University, Cambridge, Mass. The Joint Center’s latest Leading Indicator of Remodeling Activity report projects that year-over-year growth in home renovation and repair spending will be 2.9% in early 2026 before easing to 1.6% growth by the end of the year. “Single-family home sales and permitting activity have picked up modestly from very low levels, which should support a nominal increase in remodeling activity this year,” said Rachel Bogardus Drew, director of the Joint Center’s Remodeling Futures Program. “Even with some deceleration later in the year, overall annual homeowner spending on improvements is expected to reach $522 billion by the end of 2026.”  Chris Herbert, managing director of the Joint Center, noted that remodeling trends closely track the health of the broader housing market. “If interest rates begin to ease, that could provide a much-needed boost to both housing construction and retail sales of building materials, which for now continue to pose significant headwinds to homeowner improvement spending,” he said.  Source: The Mortgage Bankers Association

According to data from First American presents a complex but positive picture of women and homeownership. Over 20 million single women held homes in 2025, the most ever. However, the percentage of single women who own a home decreased somewhat from 51.9% to 50.9%. That slight decrease could initially seem to indicate a setback. However, a closer examination indicates something different: more single women became homeowners despite a difficult affordability situation.  Knowing what the homeownership rate measures is crucial. It shows the percentage of households that are homeowners. The overall number of single-woman families climbed even more quickly than the number of single women homeowners, which rose somewhat from the previous year. The rate decreased as a result of women’s household formation outpacing ownership expansion. Top four reasons women purchase properties: Desire to own home of own: 27%, Desire to be close to friends/family: 17%, Change in family situation: 12%, Retirement: 5%. One other possible explanation for why single women do better than single men when buying homes could be the occupants. Single women are slightly more likely to buy a multigenerational house and are more likely to have children under the age of 18.  Source: First American

The oldest homeowner demographic age 70 and above controlled 26% of the roughly $48 trillion in total U.S. real estate wealth as of the third quarter of 2025, according to a Redfin analysis of the most recent Federal Reserve data. That represents more than 15 years of consistent growth from around 16.5% in the first quarter of 2008.  The ascent of the 70-plus demographic has roughly matched the pace of 40- to 54-year-olds’ declining share of total real estate wealth, which is down from 35.1% at the start of 2008 to 26% in the third quarter of 2025. People in the U.S. under 40 saw their share shrink from 16% to 12.6%, the listings platform says. The findings underscore that while current homeowners continue to enjoy record levels of housing wealth, the overall concentration of wealth has shifted dramatically to favor older homeowners over the past 15 years. While the 70-plus and 40-to-54 age groups each had 26% share in the third quarter, the oldest homeowners surpassed the prime earning-age homeowners’ share of real estate wealth for the first time since the Federal Reserve started tracking the figures in 1989. Pressing affordability challenges have disproportionately favored current and older homeowners with access to equity from home sales, who can more readily afford to repurchase in today’s high-priced marketplace. The National Reverse Mortgage Lenders Association reported at the start of  the year that homeowners age 62 and older have seen their home equity rise from about $4 trillion in 2006 to around $7.5 trillion in the first quarter of 2020. That figure doubled to around $14.6 trillion as of the third quarter of last year.  Source: NRMLA

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The conundrum continues with regard to today’s employment situation. In years past, the current level of job growth would be associated with a concurrent or impending recession. Yet, after last week’s announcement of 178,000 jobs added to the economy in March, we now have 171,000 jobs added for the first quarter of the year, as the previous two months were revised downward by 7,000 jobs.  This follows a year in which only 181,000 jobs were added for the entire year.  Keep in mind that the economy added 2.2 million jobs in 2024, a year of moderate growth.

So why are we not in a recession at the present time?  The unemployment rate moved from 4.4% to 4.3% last month and it is merely 0.3% higher than the beginning of 2025.  Though it has moved upward, the movement has not been indicative of a recessionary economy.  Since we are no longer removing Federal jobs at a robust clip, we can only point to the reduction of legal and illegal immigration as factors which could have caused this phenomenon of tepid jobs growth without a spike in the unemployment rate. There may be other factors in play, but this is the most obvious factor to consider at the present time.

So how will the economy react to this new reality in the long run? Since we have not experienced this relationship before, the reaction of the economy is an open question. Thus far economic growth has been muted as well, which certainly should be expected in the immediate term. Plus, we are experiencing another factor – the conflict in the Middle East which will create at least a short-term rise in inflation. Hopefully these will be temporary factors which will certainly affect the numbers in the next few months. But certainly, these additional factors will make it harder to determine the answer to the “new reality” question.

Weekly Interest Rate Overview

The Markets. The rate increase was less pronounced this past week as hopefully the market is stabilizing somewhat. There is still a lot of volatility from day-to-day. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.46% last week from 6.38% the previous week. In addition, 15-year loans increased to 5.77%. A year ago, 30-year fixed rates averaged 6.64%, 0.18% higher than today. Attributed to Freddie Mac: “The 30-year fixed-rate mortgage edged up, averaging 6.46% this week. With spring homebuying season in full swing, aspiring buyers should remember to shop for the best 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

Cotality analyzed why more homebuyers are still opting for adjustable-rate mortgages even as rates begin to drop. ARMs made up 21% of the market in Cotality’s most recent data, the highest share in three years. Despite the falling rates, the savings between conventional mortgages and ARMs are significant, Cotality noted, with a 5/1 ARM in early 2026 at approximately 5.3% and a conventional 30-year loan at around 6.1%. These borrowers are “dating” their interest rate, not marrying it, Cotality stated, with many planning to refinance or sell before the fixed-rate period ends. ARMs are most popular in high-cost markets where the affordability gap is widest. “For many, choosing an ARM is less about preference and more about necessity–a bridge to affordability that comes with the expectation of refinancing or managing higher payments in the future,” said Archana Pradhan, Cotality principal economist. California sees the largest proportion of ARMs, at 31% of mortgage originations in 2025. Washington, D.C., has 28% and Massachusetts is at 24%. And ARMs are particularly popular in luxury markets or high-end sectors. By December 2025, almost half of all originations over $1 million were ARMs.  Source: Cotality

The best way to ease the nation’s housing affordability crisis is for policymakers to eliminate excessive regulations that are preventing builders from increasing the housing supply, the National Association of Home Builders (NAHB) told Congress. Testifying at a congressional panel hearing focusing on housing affordability, Buddy Hughes, chairman of NAHB and a home builder and developer from Lexington, N.C., said that in order to ease housing constraints for home buyers and renters, it is imperative to eliminate excessive regulations that hinder the construction of new homes and apartments. “Regulations account for nearly 25% of the cost of a single-family home and more than 40% of the cost of a typical apartment development,” said Hughes. “The time and costs associated with complying with a multitude of government regulations can be significant for small- and medium-sized builders and ultimately limit housing supply.” Increased regulations, including overly stringent mandatory energy code requirements, are impeding the ability of builders to boost housing production. In particular, Hughes cited a final determination by the Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA) that required new single-family and multifamily homes financed by these agencies to comply with the 2021 International Energy Conservation Code (IECC) or ASHRAE 90.1-2019, respectively. The Administration has delayed the effective date for both single-family and multifamily housing until May 2026.  “NAHB urges Congress and the administration to prohibit HUD and USDA from enforcing a minimum energy standard that increases housing costs during a nationwide affordability crisis,” said Hughes. For multifamily projects with federal assistance, a key challenge for builders and developers is the requirement to source domestically for construction. “While our members try to use products made within the U.S., it’s not always practical because of price or availability,” said Hughes. “Multifamily housing needs an exemption from this requirement to help avoid construction delays and additional costs.”   Source: The NAMB

The rising age of first-time homebuyers has dominated discussion of the housing market in recent months—and multiple sources offer varying estimates of how old the typical first-time buyer really is. Last year, the National Association of Realtors® reported, based on survey data, that the median age of first-time buyers had jumped to 40. That is the highest age on record, and up from age 33 just five years earlier. That figure has been widely cited by politicians and is a simple shorthand for capturing the painful affordability struggles that many first-time homebuyers face in the market.  But not everyone agrees with the NAR figure. The Federal Reserve Bank of New York used estimates based on credit reports that showed the age of first-time buyers trending lower over time to 36.3 in 2024, down from just under 38 in 2000. Recently, a separate estimate based on U.S. Census Bureau data was released by Redfin, asserting that the typical first-time buyer was 35 last year—down from 36 in 2024, but up from 34 a decade earlier. The varying estimates highlight the difficulty of precisely pinpointing first-time buyer age, with each of the various methods used in the three studies carrying certain benefits and drawbacks.  “Like a lot of questions that seem simple, the question of who is a first-time homebuyer can get murky,” says Realtor.com® Chief Economist Danielle Hale. “Yes, a family who has never purchased a home before is a first-time homebuyer, but what about the family that owned, then rented for a few years before buying again? In some estimates, this family would be considered a first-time homebuyer.”  Source: Realtor.com

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Let’s go back to the end of February.  After a year of tepid job gains, slow housing growth and higher-than expected interest rates, things were starting to look up.  We had a solid month of job growth in January and mortgage rates were moving down enough to entice prospective homebuyers to start shopping again. Plus, those who purchased more recently were starting to refinance in greater numbers. Even inflation, though it had not reached the Federal Reserve’s target, was stabilizing at a tolerable level. In other words, there were plenty of reasons for optimism.

Then the calendar moved on.  The first salvo was fired literally at Iran. Unlike the limited strikes of last year, this conflict represented a sharp escalation in intensity.  Immediately, oil prices surged, causing significant concerns about the future of inflation. Not surprisingly, mortgage rates rose from the recent lows, despite the labor department reporting that the growth of jobs we witnessed in January was erased the very next month.  The stock market reacted as we would expect, with heavy losses in reaction to slower growth and the fear of higher inflation.

 Thus, the term stagflation is being dusted off by market analysts. All this news is just a sober reminder that predictions are impossible. Plus, markets can change on a dime.  If the conflict is short-lived, the stock markets and mortgage rates could reverse their directions overnight.  If the conflict continues for a longer period, there is concern about long-term damage to the economy. One thing we do know is that the consumer is resilient. If mortgage rates head back down, there is a significant amount of pent-up demand for homes and there is still the potential for a bounce-back year in 2026.  

Weekly Interest Rate Overview

The Markets. Rates continued to march upward influenced by the war with Iran. Increased volatility continued as well. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.38% last week from 6.22% the previous week. In addition, 15-year loans increased to 5.75%. A year ago, 30-year fixed rates averaged 6.65%, 0.27% higher than today. Attributed to Freddie Mac: “Mortgage rates this week averaged 6.38%. The housing market continues to show gradual improvements compared to a year ago amid recent rate volatility. Purchase and refinance applications are up year-over-year, and rates remain lower than last year when they averaged 6.65%.” 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

According to First American experts and recent data, for homebuyers this year, spring break might come a bit early. For the first time in over three years, house-buying power exceeded the national median list price late last year. This could lead to a more active spring home-buying season than in previous years as more properties become affordable for buyers. This comes after housing affordability reached its highest level since the summer of 2022 and improved year-over-year for the ninth consecutive month in November 2025. Even though affordability is still more than 63% lower than its five-year pre-pandemic average, the improvement trend is becoming more pronounced and long-lasting. Fitting the mortgage payment inside their monthly budget, which is a function of their house-buying power, is more important to most families when purchasing a home than the list price. The ability to purchase a home increases when mortgage rates decline, along with rising household income. “House-buying power reached a significant milestone, surpassing asking prices at the national level for the first time in more than three years,” said Sam Williamson, Senior Economist for First American. Source: First American

The typical US homeowner now stays in their home for 12 years, up from 11.8 years a year earlier and close to the longest stretch on record, according to a Redfin analysis of county sales records through December 1, 2025. That longer stay, while short of the 2020 peak of 13.4 years, reinforces a years‑long pattern of households aging in place and throttling the supply of homes available to first‑time buyers. The real estate giant reported that homeowners in 2005 typically sold after 6.5 years, meaning tenure nearly doubled over two decades as the population grew older and millions of owners locked in cheap mortgage debt during the pandemic. Baby boomers and Gen Xers are especially likely to remain where they are, helped by paid‑off mortgages or monthly payments far below what a new buyer would have faced at current prices and rates. “High mortgage rates and home prices perpetuate a cycle that locks up housing inventory,” said Chen Zhao, Redfin’s head of economics research. “It can keep existing homeowners in place and financially discourage them from moving to a different home or a different neighborhood, which drives prices up even higher for first‑timers trying to break into the market. But there is good news: Homebuying affordability has improved as mortgage rates have come down, dropping below 6% for the first time in over three years last week. And home‑price growth has lost steam, and we expect it to improve more. That should push more Americans to move.”  Source: Redfin

In 2025, ground was broken on an estimated 1.36 million homes, a .6 percent drop from 2024. Many experts believe that is far below the number of starts needed to help address the housing shortage in the U.S. “It’s been a disappointing year for home construction,” said Robert D. Dietz, chief economist at the National Association of Home Builders.  According to research by Goldman Sachs, the country needs to build “3-4 million additional homes beyond normal construction” to alleviate the country’s housing crisis. To hit that mark, the number of annual housing starts would need to be a lot closer to two million in the coming years.  Not all that long ago, two million annual housing starts did not seem like an especially heavy lift. But there is good reason for the much more cautious approach many today take toward building homes.  When the housing bubble burst in 2008, it caused the devastating global financial crisis.  Since then, builders and banks have tried to avoid the kind of speculation that brought the American economy to the brink. But that caution has taken a toll on housing availability. In recent years, starts have hovered between 1.6 million and 1.3 million, with a peak in 2021 when builders were responding to a surge in demand spurred by the coronavirus pandemic.  “There are so many broken parts of the housing market right now,” said Ali Wolf, chief economist at Zonda. Dietz, of the home builders’ association, identifies these parts as five Ls: labor, land, loans, lumber and legal fees.  In response, despite their many differences, liberals and conservatives are uniting around the concept of “Yes in my backyard” (YIMBY).  Source: The New York Times.

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The Federal Reserve met last week and, as we indicated in our last commentary, it appeared to be a whole new ball game.  In the past several weeks news has been quite tumultuous, to say the least. First, our country started an all-out assault upon Iran in the Middle East. Considering the circumstances, it is no wonder that oil prices started to escalate immediately. Of course, higher energy prices are quite certain to exacerbate the threat of inflation, which is concerning to a Federal Reserve whose primary objective is to bring down the rate of inflation.

In addition, a prolonged military conflict will have an inflationary impact upon the economy in the long run because war is expensive. For example, in the first days of the assault, we were burning through a billion or so dollars per day because missiles are expensive. The result will be increased government spending which will mean that the government will have to borrow more money which also puts additional upward pressure on interest rates. Thus, higher energy prices will affect rates and inflation in the short-run but the long-term effects can be just as severe if the conflict continues.

It is no wonder that the stock market reacted so negatively to the on-going conflict. All this means that the Fed should have been more reticent to lower rates last week.  However, there were other intervening factors. The government also released a jobs report showing that the economy lost 92,000 jobs last month. In addition, retail sales fell in January, indicating that consumers are spending less money. This economic news certainly supports the argument for lower interest rates. Together, these factors certainly put the Fed in a very unenviable position. What did they do? The Fed decided to keep rates unchanged which was no surprise, especially considering the latest producer price report showing inflation continuing to be stubborn.

Weekly Interest Rate Overview

The Markets. Rates continued to increase this past week as the markets continued to react to energy prices rising due to the conflict in the Middle East. This is causing volatility across the markets. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.22% last week from 6.11% the previous week. In addition, 15-year loans increased to 5.54%. A year ago, 30-year fixed rates averaged 6.67%, 0.45% higher than today. Attributed to Freddie Mac: “The 30-year fixed-rate mortgage edged up this week to 6.22% but remains nearly half a percentage point lower than the same time last year. Potential homebuyers are poised for a more affordable spring homebuying season than last with the market experiencing improvements in purchase applications and pending home sales.” 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 today’s first-time homebuyers, getting a toehold into the pricey housing market increasingly means buying a townhome. Townhomes are making up a growing percentage of the for-sale market around the country, a testament to their relative affordability compared to single-family homes, as well as how homebuilders are leaning into growing demand for cheaper homes and higher-density neighborhoods.  Townhomes are proliferating not only in denser regions where they’ve been a major presence, like Baltimore and Philadelphia, but also in smaller cities from Lancaster, Pa., to Sioux Falls, S.D. They’re likely to become an even bigger part of the market in the coming years: Attached homes made up nearly 20% of single-family housing starts in the third quarter of last year, averaging their highest market share in recent quarters since 1985. “I’ve been pointing to it as one of the bright spots in a housing market in 2025 that disappointed,” said Robert Dietz, chief economist at the National Association of Home Builders.  Kailen Yost, a real estate agent in Johnstown, Colo., said the dream for most of her buyers is still a detached single-family home. But in the Northern Colorado counties where she works, average prices range from $537,000 to $659,000 — out of reach for many first-time buyers. “Single-family homes still are probably the most popular option,” Yost said. “First-time homebuyers, though, are definitely leaning in more towards the townhome because it’s more affordable. Single-family is more for that second leap.”  The cost savings for purchasing a townhome instead of a detached single-family home can be substantial. In recent years, through both the pandemic boom and the more recent market freeze, townhomes have been roughly 10% cheaper on average than single-family homes, Realtor.com found. “It’s positioning itself against single-family homes as an easier maintenance option at a better price,” said Joel Berner, senior economist at Realtor.com.  Source: Yahoo Finance

The U.S. housing supply gap widened to an estimated 4.03 million homes last year, increasing from 3.8 million in 2024, according to the 2026 Housing Supply Gap Report from Realtor.com. The report noted new construction once again fell short of household formation and pent-up demand from younger households persisted. Approximately 1.41 million households were formed in 2025, compared with 1.36 million housing starts. While the annual shortfall of roughly 50,000 units may appear modest, it adds to more than a decade of underbuilding that has constrained supply, fueled home price growth and pushed homeownership further out of reach, particularly for younger Americans. “Even when annual construction and household formation are roughly balanced, the market is still digging out from more than a decade of underbuilding,” said Danielle Hale, chief economist at Realtor.com. “A supply gap exceeding four million homes underscores how deeply rooted the shortage has become.” Hale noted that, without a sustained increase in housing supply, particularly in areas with strong job growth and persistent demand, affordability challenges will continue to sideline many would-be buyers. 2025 marked the third-largest annual deficit since 2012, trailing only 2020 and 2023. “Although the largest single-year gap occurred in 2020 during pandemic-related disruptions, recent deficits reflect more persistent structural imbalances between supply and demand and the difficulty of making sustained progress against the gap,” the report said.  Source: Realtor.com

Home equity moved from a dormant asset to an active retirement lever, not a last-resort cash line. Consumers recalibrated their thinking about reverse mortgages, and originators watched the shift because it changed who qualified as a viable client. “I think people are looking at their home equity as they get closer to retiring, and they’re wondering how they can use that money during retirement, especially since it’s the largest asset for a lot of people,” Ben Sillitoe, president of Retire Right Mortgage, told Mortgage Professional America. “A lot of consumers are starting to see reverse mortgages for exactly what they are. They’re just another financial tool that might be useful to them during retirement.”   Legitimacy was fueled by a decade-plus of analysis in retirement research circles.  “There have been a lot of improvements to the product over the years, but I believe the main development that has been the emergence of research in the past 10 to 15 years, which has shown the reverse mortgage to be very effective at mitigating one of the main risks during retirement, which is running out of money during a potentially long retirement,” Sillitoe said. “And research has shown the HECM to be pretty effective at reducing that risk when it’s used appropriately. So, the financial planning industry is starting to notice that, especially with the unprecedented amount of home equity. that people have accumulated over the last several years.”  The evidence base put structure around when and how to use home equity alongside investment portfolios, and that framing resonated within planning circles.   With costs rising and longer horizons at play, the borrower’s profile widened. “The new borrower profile is pretty much anyone in the right age range with enough equity to qualify for the HECM,” he said. That included households that were not strained monthly cash flow but wanted a buffer against market shocks. “Even if your client might not be worried about running out of money during retirement, it could still be used to preserve their net worth in retirement.”   Source: Mortgage Professional America

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The Federal Reserve’s Open Market Committee meets this week. A few weeks ago, market prognosticators were absolutely sure there would be no further movement by the Fed to lower rates again for the foreseeable future. Afterall, we have seen some positive economic news, and it is obvious that the fight against inflation is not finished by any means. Oh, we have had a plethora of economic news to chew on in addition to the inflation data – including the most recent jobs data showing that the economy had lost over 90,000 jobs last month.

 But as we always warn our readers, predictions are futile because there is always the imposition of unknowns hitting us when we least expect it.  Two weeks ago, we had no idea that the Fed would be meeting in the middle of a regional war sparked by our own country.  It is not unusual for the Fed to act to calm the markets when there are significant occurrences causing major disruptions.  And certainly, the situation in the Middle East qualifies as such.

Of course, with the Fed there are also counterbalancing forces. In this case the price of oil is one such phenomenon. Surging oil prices certainly have the ability to cause a rekindling of world-wide inflation. And it is not just the price of energy that could be affected, as wars have a direct effect of increased government spending for such things as military hardware and reconstruction of affected countries. Thus, the Fed faces a major conundrum.  The stability of the markets will be paramount, but the long-term effects of war are going to factor into the equation. Certainly, these are very interesting and sober times we are experiencing today.

Weekly Interest Rate Overview

The Markets. Rates increased in the past week as the markets reacted to energy prices rising due to the conflict in the Middle East. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.11% last week from 6.00% the previous week. In addition, 15-year loans increased to 5.50%. A year ago, 30-year fixed rates averaged 6.65%, 0.54% higher than today. Attributed to Freddie Mac: “The 30-year fixed-rate mortgage returned to last month’s level of 6.11%. Despite the modest uptick, buyers are responding to rates in this range, with existing home sales increasing 1.7% in February. Purchase applications also increased this week, a welcome sign as buyers enter spring homebuying season with rates down more than half a percentage point compared to the same time last year.” 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 median-income American household can now afford a $331,483 home, a $30,302 improvement since last year and the highest affordable price since March 2022. a new Zillow analysis shows. According to the analysis, a median-income household has seen roughly 82,300 more homes come into its budget than a year ago. Lower mortgage rates and rising incomes have made the difference. Zillow said it forecasts further dips in mortgage rates this year and that could lead to additional improvements in buying power. Improving affordability points to a more active home shopping season this spring, Zillow noted. The typical mortgage payment — excluding taxes and insurance, and assuming a 20% down payment — is 8.4% lower than a year ago, Zillow’s analysis stated. According to the analysis, home value growth has flattened, and mortgage rates have fallen from an average of 6.96% in January 2025 to 6.10% last month. Incomes have edged higher, Zillow said.  Together, Zillow noted that it gives a median-income household an extra $30,302 in buying power. Zillow stated that affordability is still challenged — a median-income household would spend 32.3% of that income on a typical mortgage payment — but that additional $30,000 in buying power can mean the difference between settling and choosing for home buyers this year. Buying power is at its highest level since March 2022, when mortgage rates were still below 5%, Zillow stated. Improving affordability and rising inventory indicates that buyers should have more options within reach than in recent years. A $30,000 increase in buying power can make available a different neighborhood, a bigger home, or a home with fewer compromises. Source: MP Daily

Are lower prices mixed with lower rates the winning combo? More builders and sellers are hoping a lower price will boost sales. Home buyers are gaining more negotiating leverage—and many are zeroing in on the price of listings. They’re increasingly finding discounts, too. As home sales remain sluggish this winter, more sellers are reducing their asking prices. In the new home market, homebuilders are leaning heavily on price cuts and incentives—more than at any point in recent years—in trying to bring more buyers to the closing table. In February, 36% of builders reported cutting prices, with an average price reduction at 6%, according to the National Association of Home Builders. Another 65% offered incentives such as closing cost assistance, mortgage rate buydowns or design upgrades.  The new home market’s growing concessions are putting pressure on sellers of existing homes to stay competitive. Nationally, about 18% of existing home listings had a discount as of late 2025. What’s more, nearly 11% of active listings, as of January, had at least three price cuts, according to a new analysis from realtor.com® of homes listed at its site.  While price cuts are increasing, most homeowners are still sitting on significant equity gains over the past several years. Since January 2020, the typical homeowner has accumulated $130,500 in housing wealth, according to National Association of REALTORS® research.  For buyers, “affordability conditions are improving,” says Lawrence Yun, NAR’s chief economist. NAR’s Housing Affordability Index shows housing is at its most affordable level since March 2022, largely because wage growth has outpaced home price gains and mortgage rates are at the lowest level in three years. Source: NAR

Millennials and Gen Zers are willing to significantly reduce discretionary spending to be able to buy their first home, according to a new survey, but many are unsure that will be enough to overcome affordability barriers. The survey, conducted in January by a third-party research panel commissioned by Mercury Insurance, found that 73% of respondents would cut back on discretionary purchases to afford a home. The most common items they were willing to give up were luxury items (73%), sporting event tickets (64%), food delivery (61%), alcohol (60%) and concert tickets (52%). The millennial generation is typically defined as people who are currently between the ages of 30 and 45, while adults in the Generation Z cohort are 18 to 29. Collectively, 32% of respondents in those cohorts indicated they are unsure if they will ever own a home, while 97% said their respective generation faces greater homeownership hurdles than previous generations.  Prospective homebuyers from younger generations are flexible on location, the survey found. Among millennials, 28% were willing to move more than 50 miles from their desired location. Among Gen Zers, that figure was 23%. About a third of both generations are willing to get a second job, delay having kids or temporarily move in with their parents if it means becoming a homeowner, the survey found. But many drew a line in the sand on other concessions, with just 19% saying they would delay further education and just 21% willing to move to a “less desirable area.”   Source: Scotsman Guide

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The February employment report was released on Friday of last week. For the month of February, the economy lost 92,000 jobs and the unemployment rate rose to 4.4% from 4.3% the previous month. The previous two months of job gains were revised downward by 69,000 jobs.  Following a solid month of jobs gains in January and a weak year of gains in 2025, this report can be seen as significantly disappointing, especially considering the adjustments made to the previous two reports. 

In addition to the headline numbers, wage growth was 0.4% higher month-over-month and 3.8% higher on an annual basis.  This data was in line with the previous month. Obviously, inflation continues to be a concern and wage growth is an important factor within the overall inflation picture. In the last month we saw an encouraging Consumer Price Index (CPI) report, but also a concerning release of the Personal Consumer Expenditures Index (PCE) – which tells us that the news on inflation continues to be mixed at best. We won’t have to wait long for the next reading of the CPI, as it is scheduled to be released this week along with a delayed PCE index for January. 

Moving from employment growth and inflation, the topic of tariffs is back in the news in the wake of the Supreme Court’s recent ruling.  Though the ruling was cheered by those who are not a fan of tariffs, initial reports are that tariffs are not going away as the Administration is intent on using different avenues for implementation.  And no sooner did the markets digest the tariff situation, the conflict with Iran moved to the forefront of world news.  While previous strikes in Iran were limited, this time around the size of the conflict was sure to cause more significant market reactions. In addition, while we can’t be sure of the timing, it looks to be a major factor which will be with us for some time.

Weekly Interest Rate Overview

The Markets. In the past week, average mortgage rates held at their lowest levels of the past three-plus years. According to the Freddie Mac weekly survey, 30-year fixed rates rose slightly to 6.00% last week from 5.98% the previous week. In addition, 15-year loans decreased slightly 5.43%. A year ago, 30-year fixed rates averaged 6.63%, 0.63% higher than today. Attributed to Freddie Mac: “Mortgage rates held steady at 6% this week, hovering near their lowest level since 2022. In fact, rates are down nearly a full percentage point from this time in 2024, spurring activity from buyers, sellers and owners. As a result, refinance activity is up, and purchase applications are ahead of last year’s pace.” 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

Coming up with a home down payment is often the biggest obstacle buyers face when purchasing a home. It can take years to save, putting potential buyers’ homeownership aspirations farther out of reach. Down payment assistance (DPA) programs can help fill the void, but many buyers don’t know these programs exist or how to use them. According to Down Payment Resource’s (DPR) Homeownership Program Index, there were 2,619 homebuyer assistance programs in the U.S. in the fourth quarter of 2025, up 6% over a year ago, with an average benefit of $18,000 per borrower.  As of December, the national median existing home sales price was $405,400, according to the National Association of Realtors (NAR). Meanwhile, the average 30-year fixed mortgage rate remains near 6%, leaving many buyers struggling to come up with ample cash for a down payment and closing costs. Depending on the home loan you choose, you might have to come up with 3% to 5% of a home’s purchase price for a down payment, and an additional 2% to 6% of the loan amount in closing costs.  “Affordability will remain the defining challenge for homebuyers in 2026, and down payment programs are one of the most practical tools lenders have to address it,” said DPR Founder and CEO Rob Chrane. “When DPA lowers loan-to-value ratios and helps cover upfront costs, it doesn’t just improve borrower eligibility; it improves loan quality.”  Recognizing the bind many homebuyers are in, DPA programs are growing — and offering more flexibility in their guidelines. This includes higher income limits, expanded programs for repeat and military buyers and more options for manufactured homes and multifamily properties. Down payment assistance programs help buyers cover upfront costs, including the down payment and (in some cases) closing costs. The assistance typically falls into two categories: forgivable grants or repayable second mortgages. Forgivable grants don’t require repayment if you meet certain conditions, such as living in the home for a certain period of time as your primary residence.  Repayable assistance, on the other hand, usually involves a second mortgage, which comes in second lienholder status behind your primary mortgage.  Down payment assistance programs are operated by state, county and local public housing agencies, as well as nonprofits.  Source: Quartz

Hispanics had a record year for both homeownership and household formation in 2025, according to key findings from the soon to be released 2025 State of Hispanic Homeownership Report by the National Association of Hispanic Real Estate Professionals (NAHREP). While the overall homeownership rate declined slightly in 2025 across nearly all demographic groups for the second consecutive year, NAHREP noted that Hispanics had a record year for both homeownership and household formation, adding 441,000 net new homeowners and 1,094,000 overall households. Latinos accounted for 139.6% of total U.S. homeownership growth and 92.6% of household formation growth nationally, the findings show. The U.S. homeownership rate ended 2025 at 65.7%, flat from 2024’s year-end mark, according to Census Bureau data. Without the strength of Hispanic homebuyers, that rate would have declined, NAHREP observes.  “Hispanics had a record year for both homeownership and household formation, while the broader U.S. housing market continues to struggle with affordability challenges,” stated Gary Acosta, NAHREP’s co-founder and CEO, in a press release. “Latinos are driving demand and strengthening communities, while tight inventory, interest rates and higher home prices are keeping many qualified families on the sidelines.”  Source: Scotsman Guide

More than three in five borrowers say they completely understand how a mortgage escrow account works. But confusion remains around how escrow can affect the monthly total payment, according to LERETA.  “Rising property taxes and insurance premiums continue to reshape what homeowners experience month to month, and escrow is often where that impact shows up first,” LERETA CEO Katie Brewer said. “This year’s survey reinforces that many borrowers feel confident in their understanding of escrow, yet misconceptions still persist and that gap can lead to real frustration when payments change.” LERETA’s third annual escrow survey found that 39% of borrowers mistakenly believe their total monthly mortgage payment cannot change if they have a fixed-rate mortgage and an escrow account, up from 36% last year. Nearly all borrowers (93%) believe escrow includes funds to pay property taxes, up from 91% last year. Borrowers are less consistent on insurance, although more than four in five (85%) believe escrow includes funds to pay homeowners and or flood insurance. Even as awareness improves in some areas, payment changes still catch borrowers off guard, the LERETA report said. Among borrowers who experienced a payment increase, three in five (60%) said they were surprised, up from just over half who said that a year ago. Property taxes remain the most frequently cited driver of payment increases, rising from 57% last year to nearly two-thirds (62%) this year. Insurance-related impacts also increased, with nearly half citing higher homeowners insurance premiums and about one in five (21%) citing higher flood insurance premiums. The report noted that more than two-thirds of borrowers (70%) say their mortgage company has communicated how rising property taxes and or insurance costs could change their monthly payment, up from 56% who said this last year. Source: The Mortgage Bankers Association

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Unless there is another delay because of the previous government shutdowns, we will see another reading on the employment situation this Friday.  In January there was a surprise increase of 130,000 jobs – the first time the economy added over 100,000 jobs in a month since April of last year. While this number is encouraging, we caution reading too much into one report for two reasons.  First, one month does not make a trend. We would have to see a quarter of solid job gains in order to declare that the jobs machine on its way to recovery. For example, even though there were 130,000 jobs added in January, the previous year of gains were revised downward, mitigating the impact.

Secondly, we have obviously lowered our expectations. During the years 2023 and 2024, the economy added approximately 190,000 jobs per month.  During 2025, after the aforementioned revisions, the economy added approximately 15,000 jobs per month.  That is a precipitous drop, even considering the loss of over 300,000 Federal Government jobs.  In other words, an increase of 130,000 jobs in 2023 or 2024 would have been considered a weak report.  Thus, are left with two questions – will this level be sustained in 2025, and if so, will this be the new level of job growth going forward?

As a reminder, the employment sector was not only affected by the loss of government jobs but also lower levels of legal immigration. It will be interesting to see where we head in 2026 within the employment sector.  If January’s levels are sustained, the growth of jobs for 2026 would come in around 1.5 million, which most likely suffice considering the lower overall population growth.  On the other hand, as we stated, one month does not make a year.  Let’s hope this potential momentum continues with the report covering the employment situation for February.  If we get the numbers together in time for Friday’s release.

Weekly Interest Rate Overview

The Markets. Average mortgage rates moved to below 6.00% for the first time in over three years. According to the Freddie Mac weekly survey, 30-year fixed rates fell to 5.98% last week from 6.01% the previous week. In addition, 15-year loans also increased to 5.44%. A year ago, 30-year fixed rates averaged 6.76%, .78% higher than today. Attributed to Freddie Mac: “For the first time in three and a half years, the 30-year fixed-rate mortgage dropped into the 5% range, falling even lower than last week’s milestone. This rate, combined with the improving availability of homes for sale, is meaningful and will drive more potential buyers into the market for spring homebuying season.”  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 latest homeownership rate rose to 65.7% in the last quarter of 2025, according to the Census’s Housing Vacancy Survey (HVS). Compared to the peak of 69.2% in 2004, the homeownership rate is currently 3.5 percentage points lower and remains below the 25-year average rate of 66.3%. It is also important to note that the fourth quarter’s data is accompanied with a higher level of uncertainty. Due to the government shutdown, the Census only collected data for the last two months of 2025.  Compared to the previous year, homeownership rates increased in two age groups. Among younger households, the homeownership rate for those under 35 increased 1.6 percentage points to 37.9% in the last quarter of 2025. This age group is particularly sensitive to mortgage rates and the inventory of entry-level homes. Homeownership rates for householders ages 55-64 inched up by 0.4 percentage points over the same time. Householders ages 45-54 experienced the largest drop, declining 1.5 percentage points from 71.0% to 69.5%. The 35-44 age group saw a 0.5 percentage point decrease, decreasing from 61.4% to 60.9%.  Homeownership rates for householders aged 65 years and over declined 0.5 percentage points from a year ago.  The national rental vacancy rate inched up to 7.2% for the fourth quarter of 2025, on a steadily increasing trend since 2023. Meanwhile, the homeowner vacancy rate stayed at 1.2%. The upticks in both homeowner and rental vacancy rate signal an increase in the existing home supply.  The housing stock-based HVS revealed that the number of total households increased to 133.7 million in the last quarter of 2025 from 132.2 million a year ago. This increase was driven by both owner and renter household growth. The number of renter households rose by 0.46 million, while owner-occupied households increased by around 1 million over the same period.  Source: National Association of Home Builders

Nearly half of homes for sale now come with a monthly HOA fee, according to a recent study of the U.S. housing market. Some 43.6 percent of listed homes have homeowners association (HOA) fees, with a median monthly cost of $135, the study, from Realtor.com, found. In some areas, the HOA was more than five times that amount, adding another financial stressor for average Americans. HOA fees, used to fund amenities, roads, and other services, were typically for condo buildings and new communities, but have been spreading. Roughly one-third (33.4%) of single-family homes now carry HOA fees, and that share is on the rise, the study noted.  Not only are more neighborhoods launching HOAs, but the fees are rising due to several factors, Realtor.com Senior Economist Joel Berner said in a statement.  “HOAs are no longer confined to condos or brand-new developments,” Berner said. “Rising insurance costs, stricter building safety standards and higher labor and material prices are pushing associations to raise dues, making monthly HOA fees a much more common – and more costly – feature of homeownership than they were even a few years ago.”  From 2019 to 2025, the median HOA fee increased from $108 to $135. The study found that median fees can be much higher in certain areas, especially those popular with retirees.  Source: The Independent

The “yes in my backyard” (YIMBY) movement, backed by supply-and-demand dynamics, offers a simple solution to the housing affordability crisis — just build more houses. But some analysts believe that increased supply may arrive through a separate, more inevitable channel. The baby boomer generation is the largest cohort of seniors in United States history. As they age out of homeownership, some have predicted that a “silver tsunami” of housing supply will cascade onto the market. Cotality’s analysis of the latest national deed records gives some support to this narrative. A new indicator of inheritance events shows that a record-breaking 340,000 homes were inherited in the 12 months ending in October 2025. This represents more than 7% of all property transfers, higher than the share for any previous year. Are we seeing the beginning of a demographically destined tsunami? Maybe. But Cotality’s analysis of the latest U.S. Census data indicates the wave may not be as big, or arrive as soon, as some hope. The current generation of seniors is staying in their homes longer than previous generations. More than 22% of homeowners born in 1938 left their homes between the ages of 65 and 75. But only 17% of homeowners born in 1946 left their homes during the same decade of life. If seniors opt to age in place rather than downsizing or moving in with children, their homes will arrive on the market later. If heirs choose to keep parents’ homes for their primary residences those properties may skip the open market entirely. Inheritance is likely to play an increasingly important role in the transfer of property in the U.S. going forward. While this will be a boon for beneficiaries, demographics alone are unlikely to significantly improve affordability in the near term. Source: Scotsman Guide

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Regardless of whether the Federal Reserve continues to lower their benchmark interest rate, there is no doubt about the fact that interest rates would be lower if inflation were not a continuing concern.  In the past few weeks, we have analyzed the questions surrounding the ongoing decrease in the growth of jobs and the effect this trend might have upon economic growth. It seems we are moving into unchartered territory in this regard.  Similarly, the questions surrounding the direction of inflation are just as confounding.

The economic changes brought about by the pandemic were unprecedented. We had never had an economy shut down overnight.  Ancient history, but the concern then was deflation as the price of many goods fell significantly – though certainly not the price of toilet paper. Turns out it was not so easy to restart the economy just as quickly and the resultant supply chain shortages contributed to hyper-inflation.  This inflationary period was also fueled by accompanying record low interest rates and stimulus dollars. Inflation peaked around 9.0% in early-to-mid-2022 and started down rather quickly. Within 12 months, it was close to the Fed’s goal of 2.0%.

Despite a brief period of approximately 24 months, the damage was done to the economy.  Costs from housing to health care weighed on the lives of average Americans, as well as those around the world as this inflation, like the pandemic, was a world-wide phenomenon. And the effects are not gone because — even though inflation at close to 3.0% is more “manageable” – prices are still much higher than they were in 2020. Thus, we have a period of time in which wage growth must catch up.  And at 3.0%, it appears the progress we experienced during that 12-month decline has either slowed or stalled, depending upon your perspective.  This is the question the Fed is grappling with – what will it take to move the last mile down to 2.0% and is this last bit of progress going to be worth a concurrent risk to economic growth?

Weekly Interest Rate Overview

The Markets. Mortgage rates moved to a two-year low in the past week. According to the Freddie Mac weekly survey, 30-year fixed rates fell to 6.01% last week from 6.09% the previous week. In addition, 15-year loans also decreased to 5.35%. A year ago, 30-year fixed rates averaged 6.85%, .84% higher than today. Attributed to Freddie Mac: “Mortgage rates dropped again this week, now down to their lowest level since September of 2022. This lower rate environment is not only improving affordability for prospective homebuyers, it also is strengthening the financial position of homeowners. Over the past year, refinance application activity has more than doubled, enabling many recent buyers to reduce their annual mortgage payments by thousands of dollars.” 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

According to the U.S. Census Bureau’s latest estimates, the U.S. resident population grew by 1,781,060 to a total population of 341,784,857 in 2025. The population grew at a rate of 0.5%, a sharp decline from the near 1.0% growth in 2024. The growth rate was the lowest since 2021 when it grew at 0.2%. The vintage population estimates are released annually and represent the change in the U.S. population between July 1st of 2024 and 2025. The primary source of population growth continued to be net international migration. For 2025, the level of net international migration was less than half of its level in 2024, falling from 2.7 million to 1.3 million. Natural change, represented as births minus deaths, was up marginally from 514,277 to 518,858 in 2025. The decline in net international migration and stable natural change led to lower population growth nationally between 2024 and 2025.  Each region in the U.S. experienced population growth over the period. The South led in population growth at 0.9%, followed by the Midwest at 0.4%. Meanwhile, the West grew 0.3%, while the Northeast grew the least at 0.2%. California remained the most populous state with a population of 39,355,309. The next most populous state was Texas at 31,709,821. To round out the top five states by total population, the proceeding highest were Florida (23,462,518), New York (20,002,427), and Pennsylvania (13,059,432). Source: Eye on Housing, NAMB

The National Association of Realtors (NAR) Realtors Confidence Index showed an increase in the Market Outlook for both buyers and sellers, compared to the previous month and year. Average days on the market listed grew to 39 days, yet sellers continued to receive an unchanged average of 2.2 offers. While first-time buyers have decreased to 29%, cash purchasers continue to hold a steady 28% share of the market. Some 31% of those surveyed anticipate a year-over-year (YoY) rise in buyer traffic over the next three months, up from 22% last month and 27% a year ago. An estimated 28% of those surveyed anticipate a YoY rise in seller traffic over the next three months, up from 18% last month and 27% a year ago.  In certain housing markets, supply remains constrained compared to demand, leading to 16% of homes being sold above the list price. However, this figure is unchanged from last year and has decreased from 18% one month ago. The share of terminated contracts over the past three months stood at 5%, which is comparable to the previous month’s figure of 6% and last year’s figure of 5%.  First-time buyers made up an estimated 29% of purchasers, a slight decrease from 30% last month and 31% a year ago. Among all buyers, 18% made purchases for non-primary residence use, which is flat compared to last month and an increase from 16% last year. The share of home purchases for vacation use rose to 7%, compared to 5% a month prior and 4% a year prior. Source: MP Daily

In Q4 of 2025, foreclosure auction supply increased year-over-year, including a more than three-year high in conversion of scheduled foreclosure properties into completed auctions. Meanwhile, auction buyer activity weakened, led by a lower sales rate and fewer saves per property brought to auction, according to Auction.com. Foreclosure properties brought to auction (BTA) were up 7 percent quarter-over-quarter and up 48 percent year-over-year to a 23-quarter high, reaching 61 percent of the Q1 2020 level, Auction.com said. Meanwhile, Q4 2025 marked the fourth consecutive quarter with an annual increase in foreclosure BTA, and the 48 percent increase was the biggest since Q3 2022. Pricing signals were mixed, Auction.com said, with buyers paying slightly more relative to estimated value at foreclosure auction, but seller asking prices rose faster, contributing to a wider foreclosure bid-ask spread. Auction.com said that a survey of its buyers in early January 2026 shows a slight increase in willingness to buy compared to the previous quarter: 23 percent of those surveyed said market conditions were making them more willing to buy at auction, up from 19 percent in the previous quarter. There was early data showing that buyers were willing to pay more at auction, at least in some markets, Auction.com said. That might be a sign of recovering confidence in the housing market, Auction.com noted. Foreclosure auction buyers paid an average of 67.4 percent of estimated value in Q4 2025, up from 66.2 percent in the previous quarter and 66.6 percent a year ago.   Source: Auction.com

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