Mortgage rates remained essentially unchanged, increasing by one basis point last week, according to the Freddie Mac Primary Mortgage Market Survey as of August 27th. The economy remains resilient, demonstrated by steady consumer spending and rising household incomes. More homes coming on the market and slower price growth in many areas are giving buyers better options and helping create a more balanced housing market.
Mortgage applications decreased 1.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 21st. “Mortgage rates reached their highest level in three weeks, with the 30-year fixed rate up slightly. Mortgage rates have increased around 20 basis points over the past two months, which has dampened refinancing activity,” said Joel Kan, CMB, MBA’s Vice President and Deputy Chief Economist. “Refinance applications decreased, particularly for FHA and VA loans, and the average loan size for refinances was at its lowest since June 2025.” Added Kan, “Similarly, purchase activity was down over the week, driven by a 7 percent decrease in FHA applications. The purchase market has also slowed these past two months, with applications now five percent behind last year’s pace.”
Sales of new U.S. single-family homes tumbled in July as high mortgage rates weighed on the market and continued to sideline potential home buyers. New home sales dropped 10.5% to a seasonally adjusted annualized rate of 607,000 units last month, the lowest since January, from June’s upwardly revised pace, the Commerce Department’s Census Bureau said on Tuesday. They fell 6.3% on a year-over-year basis in June. “The housing market isn’t headed for a downturn, but rising mortgage rates and weaker growth in real disposable income due to elevated inflation will keep any rebound out of sight,” Oxford Economics Senior US Economist Matthew Martin said.
The number of Americans seeking unemployment benefits for the first time fell for a second week while the overall number of people on jobless relief rolls slid to the lowest level in a month, signaling a stable labor market that should give the Federal Reserve leeway to focus on containing inflation. Thomas Simons, chief U.S. economist at Jefferies, said recent data from payroll processor ADP and labor market analytics firm Revelio “paint a picture of a labor market that is in better balance than what is implied by the more volatile BLS numbers.” “There is a modest, steady pace of private sector job creation that is right in line with the amount necessary to keep the unemployment rate steady,” Simons said. “Businesses are replacing workers who leave, mostly driven by retirements, and the modest pace of payroll expansion beyond is in line with the modest pace of labor force growth.”
