Mortgage Services

Mortgage application activity edged ever-so-slightly higher last week, with the Mortgage Bankers Association (MBA) reporting an increase of 0.4% on a seasonally adjusted basis for the week ending February 20. Refi applications continue to do the heavy lifting. The Refinance Index increased 4% from the previous week and was 150% higher than the same week one year ago. Conventional refinance applications rose 5% for the week, while VA refinances jumped 26%, as rates declined to their lowest levels since September 2022. Notably, rates have moved even lower this week and have held these new multi-year lows in very stable fashion. If history is any guide, this should lead to an even higher refi index next week. Purchase demand moved lower, falling 5% on a seasonally adjusted basis, though activity remains 12% higher than the same week one year ago.  Joel Kan, MBA’s Vice President and Deputy Chief Economist, attributed the modest increase in overall activity to declining Treasury yields, which helped push the 30-year fixed rate to its lowest level in several months. The composition of activity shifted further toward refinances. The refinance share of total applications increased to 58.6% from 57.4% the prior week, while ARM share held steady at 8.2% . FHA share decreased to 16.1% , VA share rose to 18.7% , and USDA share remained unchanged at 0.4% .

Home price appreciation pulled back slightly at the end of last year, according to December data from both FHFA and S&P/Cotality Case-Shiller. The reports reinforce the message that prices continued to appreciate modestly through the end of 2025. FHFA’s seasonally adjusted House Price Index shows home prices up 1.8% year-over-year in the fourth quarter of 2025 and 0.8% quarter-over-quarter . On a monthly basis, prices rose just 0.1% in December , suggesting continued but subdued momentum. On a 3-month basis (which helps smooth out month-to-month volatility while still capturing more granular movement), appreciation has recovered from the early 2025 dip and is back in a normal pre-pandemic range. State- and regional-level data underscore the ongoing divergence. House prices rose in 41 states over the past year, led by North Dakota (+6.4%), Delaware (+6.3%), Illinois (+6.1%), Wisconsin (+5.7%), and Michigan (+5.5%). Florida posted the largest annual decline (-2.7%). Among census divisions, the East North Central region led with a 5.0% annual gain, while the Mountain division recorded a slight decline (-0.2%). The Case-Shiller U.S. National Home Price Index posted a 1.3% year-over-year gain in December, down slightly from 1.4% previously and marking the weakest full-year performance since 2011. After seasonal adjustment, the national index rose 0.4% month-over-month . The 20-City Composite showed a 1.4% annual gain , unchanged from the prior month, and increased 0.5% month-over-month on a seasonally adjusted basis.

If there's one housing market metric that paints a brighter picture than the rest, it's New Home Sales data from the Census Bureau. At 745,000, it eased slightly from an upwardly-revised annual rate of 758,000 , but was higher then the pre-revision reading of 737k, and 3.8% above December 2024’s 718,000. Fairly chunky revisions are par for the course with this data. The chart below shows pre-revision numbers (thus the slight uptick with the current release). For-sale inventory fell to 472,000 , down 2.7% from November and 3.5% lower than a year ago. At the current sales pace, that represents a 7.6-month supply , slightly below November’s 7.7 months and down from 8.2 months in December 2024. While supply remains elevated compared to the tightest periods of the past cycle, it continues to trend lower as sales hold firm. Prices moved higher on a monthly basis but showed mixed signals year-over-year. The median sales price rose to $414,400 (+4.2% MoM; -2.0% YoY), while the average price edged up to $532,600 (+0.5% MoM; +4.7% YoY). The divergence suggests a continued tilt toward higher-end transactions lifting the average. 2025 Total Sales: 679,000 (down 1.1% from 2024’s 686,000) Inventory (YoY): -3.5% Months’ Supply (YoY): -7.3% Prior Month Context: November sales were up 15.5% from October’s revised 656,000