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With mortgage rates on an upward trend in recent months, housing professionals got a welcome respite this week as the costs of a home loan declined.
On Tuesday, HousingWire‘s Mortgage Rates Center showed that 30-year conventional loan rates averaged 6.73% — down 6 basis points from one week ago. Rates for 30-year jumbo loans dropped to 6.66% — down 15 bps — while rates for 30-year loans through the Federal Housing Administration (FHA) were down 9 bps to 6.29%.
At the midpoint of the year, housing demand remains resilient despite ongoing affordability constraints, including mortgage rates near 6.7%.
HousingWire Lead Analyst Logan Mohtashami wrote this week that purchase loan applications — which tend to lead closed home sales by 30 to 90 days — are up from last year’s levels. But the weekly application numbers have bounced around through the first half of 2026, with 12 negative prints, 10 positive prints and two neutral prints.
“This year’s growth is a bit more legit than last year’s, which was working from an extremely low base, so the percentage growth needs context,” Mohtashami wrote in this week’s Housing Market Tracker. “The Iran conflict didn’t damage this data line too much on the negative side; a better premise is that the growth rate was probably slowed just a tad.”
Higher rates, muted refis
Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA) said mortgage market participants are still digesting the policy decisions and comments of the Federal Reserve under new Chair Kevin Warsh.
Last week’s mortgage application data from the MBA saw 1% growth from the prior week, adjusted for the Juneteenth holiday, led by a 3% rise in refinance applicants. Refi and purchase loan demand is 17% and 3% higher, respectively, than year-ago levels.
“While mortgage application activity was mixed, overall demand continues to outpace last year’s levels, reflecting the underlying strength of the housing market. As economic conditions continue to evolve, greater certainty around the interest rate outlook should help foster increased borrower confidence and support sustained housing market activity,” Broeksmit said in a statement.
The Fed held benchmark rates steady two weeks ago — the central bank’s fourth straight rate pause — but indications point to monetary policymakers being more likely to raise rates in 2026 than lower them.
Quarterly projections released by the Federal Open Market Committee (FOMC) at their prior meeting showed that nine of 12 voting members anticipate a rate hike by the end of the year. The federal funds rate, currently pegged at 3.5% to 3.75%, is expected to rise to 3.8% in six months, up from an estimate of 3.4% in March.
The refi wave that briefly materialized earlier this year when rates dropped below 6% has already crested, according to an analysis released last week by Cotality. The report explained that as of April, 3.7% of outstanding mortgages have rates above 7%, while another 10.5% of loans have rates above 6.5%. This is limiting the incentives for most potential refi candidates.
“But the opportunity is concentrated in recent vintages, with post-2022 borrowers carrying much higher rates and poised to refinance first if rates move even modestly lower,” Cotality said.
‘Masking a widening divide’
Home-price appreciation has generally been a tailwind for the housing market in 2026. Annual growth across much of the country has floated near 1%, well below the double-digit growth of the COVID-19 pandemic that was viewed as unsustainable. On Tuesday, the S&P Cotality Case-Shiller Index for April posted yearly growth of 0.8%, up slightly from the 0.7% figure in March, as inflation accelerated to 3.8% in April.
But HousingWire Data, which reflects more current market conditions, reveals softer home-price appreciation for the week ending June 26. The median list price of $450,000 was down 3.2% year over year and flat over the prior month. Some major metros were bucking the trend, led by Chicago at 7.3% annual growth, Atlanta (+3.2%) and Miami (+3.1%).
“National house prices are making history in slow motion,” Mark Fleming, chief economist at First American, said in commentary released this week. “While annual house price growth remains below 1 percent, the price level reached a new historical peak this month. Unlike the pandemic-era housing boom, when double-digit appreciation quickly pushed prices higher, today’s record reflects the cumulative effect of small monthly gains rather than rapid price acceleration.
“Although inventory continues to increase compared with a year ago, the pace of inventory growth nationally has moderated, and supply remains below pre-pandemic norms, limiting both upward and downward pressure on prices.”
Cotality’s analysis also found muted home-price growth of 0.3% for the year ending in March. But it concluded that the “national housing market is masking a widening divide” as there is sharp movement at the local level.
Home prices in San Francisco were up 8.1% from January to April, Cotality said, followed by Newark, New Jersey (+6.4%); Boston (+5.9%); and Rochester, New York (+4.3%). At the other end of the spectrum, prices declined in other markets during the four-month period, led by Cape Coral, Florida (-4.7%); New York City (-2.3%); Buffalo, New York (-2.1%); and Washington, D.C. (-1.3%).
“Home price appreciation is pushing more homeowners above long-standing capital gains tax exclusion thresholds, increasing the share of sellers who owe taxes when they move,” Cotality said. “Those thresholds, $250,000 for single filers and $500,000 for married couples, have remained unchanged since the late 1990s, despite significant gains in home values.
“Cotality analysis shows roughly one in 12 sellers now exceed these limits, with the burden most pronounced in high-cost markets like California. As a result, more owners are staying put, limiting resale supply even as prices remain elevated.”
