Housing And Mortgage Monitor

The US housing market faces slowing price appreciation and weakened activity as interest rates dampen demand. Sellers are increasingly relying on concessions to close sales amid persistent affordability constraints.

Key Takeaways

• 1.Home price growth has flattened to 0.6-0.8% YoY as sellers offer more price concessions due to weakened affordability and higher mortgage rates.
• 2.The bipartisan '21st Century ROAD to Housing Act' has cleared Congress; while it aims to lower regulatory burdens for homebuilders, meaningful supply impacts remain uncertain in the short term.
• 3.Regulatory costs for new home construction increased significantly to $132k in 2026, representing 26% of the average sale price.

Table of Contents

• Housing Forecasts and Key Charts
• Economic growth remains positive year over year
• US housing affordability is still poor
• Home sales volume has fallen
• Supply of completed homes remains constrained
• 33% of new GSE purchase mortgages have DTI above 43%
• Homeownership rates have ticked down in Q12026
• Sequential home price growth has slowed
• Most US metros are seeing home price growth stabilize
• Household balance sheet metrics remain resilient
• Subprime auto ABS losses have grown
• 2.2% of mortgaged properties have negative equity
• 30-year FNMA prepayment rates were down 11% in May vs. April
• Conventional MBS prepayment rates decreased for higher coupons in May vs. April
• High coupon Ginnie Mae prepayments decreased month-on-month
• About 20% of mortgage borrowers are in-the-money for refinancing
• The Federal Reserve's agency MBS assets remain below $2.1 trillion
• Agency MBS valuations have improved recently
• CMBS delinquency rates remain contained despite challenging CRE fundamentals
• High CMBS note rates will be an obstacle to debt refinancing
• Apartment property prices have declined
• CMBS spreads have tightened

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