Welcome to CMRE's latest market update, where we cut through the noise to bring you the essential trends shaping today's mortgage and real estate landscape. The market continues to navigate a complex environment, marked by rising mortgage rates, shifting home price dynamics, and varying regional performance.
Home Prices: Modest Gains, Stark Regional Splits
May saw a modest uptick in home price appreciation, with both FHFA and S&P CoreLogic Case-Shiller Home Price Indices reporting slight improvements from April. The FHFA data showed U.S. house prices increasing 0.3% on a seasonally adjusted basis in May, reversing a previous decline. Annually, prices were up 2.2% from a year earlier, a slight improvement from April's 2.0% pace. However, this growth still trails inflation, underscoring persistent affordability challenges.
The story isn't uniform across the nation. A significant regional divide continues to define the market. Monthly price changes ranged dramatically, from a robust 1.4% increase in the East South Central division to a 0.6% decline in the Pacific division. Over the past year, the Middle Atlantic division led the nation with 4.5% appreciation, while the Pacific division was the only region to post an annual decline at 0.3%. This highlights a widening gap between stronger Northeastern markets and softer conditions in much of the West.
Mortgage Rates Continue Upward March, Applications Retreat
Borrowing costs are once again making headlines, with mortgage rates continuing their upward climb. For the week ending July 24, the Mortgage Bankers Association (MBA) reported a 6.4% decrease in total mortgage application volume on a seasonally adjusted basis. This pullback was a direct response to higher rates, with the 30-year fixed rate increasing to 6.76%—its highest level since August 2025.
Both purchase and refinance activity felt the squeeze. Purchase applications decreased 4% from the previous week, though they remained 3% higher than the same week one year ago. Refinance activity saw a steeper decline, falling 10% from the prior week and dropping 2% below year-ago levels. As Joel Kan, MBA’s Vice President and Deputy Chief Economist, noted, "This upward trajectory in rates continues to significantly impact refinance borrowers... Despite housing inventory increasing in certain markets, higher rates have added to ongoing affordability challenges for many homebuyers, which drove the decrease in purchase activity over the week."
New Home Sales Regain Ground, Prices Adjust
The new home market showed a glimmer of recovery in June, with sales rebounding modestly by 1.6% from May. This brought the seasonally adjusted annual rate to 628,000, recovering some of the previous month's decline. However, new home sales activity remained 5.6% lower than one year earlier.
Inventory in the new home sector edged slightly lower, with 485,000 new homes for sale, translating to a 9.3-month supply. Interestingly, new home prices declined in June. The median sales price fell to $398,300, a 3.3% drop from May and 2.7% below June 2025 levels. The average sales price also saw a significant decrease, falling to $475,400.
It's worth remembering that price declines in this specific data set can sometimes reflect builders offering smaller homes or different product mixes.
The CMRE Takeaway
Today's housing market is a tapestry of contrasts. While national home prices show resilience with modest gains, regional disparities are stark. Mortgage rates are a dominant factor, cooling application activity and exacerbating affordability challenges. Yet, the new home market shows signs of adapting, with a slight rebound in sales and adjustments in pricing. For buyers and sellers, understanding these nuances is key to navigating the current landscape. Stay informed, stay strategic, and let CMRE be your guide.