Welcome to your latest CMRE market update, where we break down the most crucial trends shaping the mortgage and real estate landscape. It's a tale of resilience and subtle shifts, with mortgage rates experiencing a much-needed reprieve and home sales demonstrating remarkable stability, even as inventory remains a persistent challenge.
Mortgage Rates: A Welcome Dip Sparks Activity
After a period of rising borrowing costs, the mortgage market saw some relief. For the week ending August 7, 2026, the average contract rate for a 30-year fixed mortgage decreased to 6.77%, down from 6.81% the previous week. This modest decline, though small, had a noticeable impact on borrower behavior.
According to the Mortgage Bankers Association (MBA), total mortgage application volume rebounded by 3.6% on a seasonally adjusted basis. Both purchase applications (up 3%) and refinance applications (up 5%) saw increases. While application activity remains below year-ago levels, this weekly bounce signals that potential homebuyers and homeowners are highly sensitive to rate fluctuations. It underscores that even a slight easing in rates can unlock pent-up demand.
Existing-Home Sales: Stable but Supply-Constrained
Despite elevated mortgage rates, the existing-home sales market has shown remarkable stability. In July 2026, existing-home sales eased slightly by 1.7% from June to a seasonally adjusted annual rate of 4.06 million. However, this figure was still 0.7% higher than in July 2025, marking a year-over-year increase. NAR Chief Economist Lawrence Yun noted the market's stability, suggesting stronger activity if rates approach 6%.
The persistent challenge remains inventory. Total housing supply declined to 1.54 million units in July, down 1.9% from June and 0.6% from a year earlier. This tight supply translates to a 4.6-month supply at the current sales pace, indicating a seller's market where options for buyers are limited. This scarcity continues to fuel price appreciation.
Home Prices and Affordability: Upward Trend Continues
Amidst the subdued sales pace and tight inventory, home prices continue their upward trajectory. The median existing-home price increased to $434,100 in July 2026, a 2.0% jump from July 2025. This marks the 37th consecutive month of year-over-year price increases, highlighting the market's underlying strength and the impact of low inventory.
Interestingly, affordability has seen some improvement compared to a year ago. The Housing Affordability Index rose to 103.3 in July 2026, up from 98.3 in July 2025, with improvements across all four regions. While this enhanced affordability can support demand, the ongoing decline in inventory will likely continue to limit options and bolster prices.
What This Means for You
For prospective homebuyers, the recent dip in rates offers a glimmer of opportunity. However, be prepared for a competitive market, especially given the low inventory and persistent price increases. Having your financing pre-approved with CMRE will give you a significant advantage. For homeowners, if you've been waiting for a refinance opportunity, the slight rate decrease might be worth exploring, though incentives are not as strong as in previous low-rate environments.
CMRE is here to help you navigate these dynamic market conditions. Whether you're buying, selling, or considering a refinance, our expert team is ready to provide tailored advice and solutions to help you achieve your real estate goals.