Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.40% month-over-month (MoM) on a seasonally adjusted (SA) basis in July.

On a year-over-year (YoY) basis, the National FMHPI was up 2.3% in July, up from up 1.8% YoY in June. The YoY increase peaked at 19.1% in July 2021, and for this cycle, and bottomed at up 1.0% YoY in January 2026.

The second graph shows the month-over-month (MoM) change in the national FMHPI, seasonally adjusted.

The seasonally adjusted FMHPI increased 0.40% MoM on a seasonally adjusted (SA) basis in July.

Last year, the FMHPI decreased slightly in August, so the year-over-year change next month will likely be slightly higher than in July.

16 States and D.C. have seen price declines Seasonally Adjusted

As of June, 16 states and D.C. were below their previous peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peaks are in Colorado (-1.9%), South Dakota (-1.5%), and South Carolina (-1.5%).

For cities (Core-based Statistical Areas, CBSA), 129 of the 387 CBSAs are below their previous peaks.

Here are the 30 cities with the largest declines from the peak, seasonally adjusted. Punta Gorda, Austin and Cape Coral has seen double digit price declines. Note that the top 4 cities with the largest price declines are in Florida and Texas.

Here is a comparison of year-over-year change in the FMHPI, median house prices from the NAR, and the Case-Shiller National index.

The FMHPI and the NAR median prices (up 2.0% YoY in July) appear to be leading indicators for Case-Shiller. The Case-Shiller index was up 1.5% YoY in June. The FMHPI is suggesting the Case-Shiller index will likely be up slightly more year-over-year in the July report compared to June.

Since inventory increased in 2025, while sales matched the lowest level since 1995, national house price growth (year-over-year) slowed. However, inventory growth has slowed recently, and there are also significant regional differences.

Update on the GSEs: MBS Holdings Decline, Interest Rate Risk Measures Keep Rising

Fannie Mae and Freddie Mac released their monthly volume summaries for July this week, and these reports showed that their combined holdings of Agency MBS declined for the third consecutive month last month. On the month Fannie’s Agency MBS holdings fell by $4.7 billion, while Freddie’s Agency MBS holdings declined by $1.5 billion. In the first four months of this year the GSEs’ combined Agency MBS holdings increased by $50.5 billion, but in the last three month’s their combined Agency MBS holdings fell by $12.2 billion.

The $38.3 billion year-to-date increase in the GSEs’ Agency MBS holdings is a far cry from the $200 billion of GSE MBS purchases implied by President Trump’s January 8^th post, and the decline in the GSEs’ Agency MBS holdings over the last few months has surprised quite a few market analysts. While it is not clear why the GSEs have not “followed through” on the President’s implied directive, it is possible that there was some GSE “pushback” on the potential size of their MBS purchases given the anemic risk-adjusted returns on capital associated with GSE debt-financed MBS purchases.

MBS/Treasury spreads narrowed sharply to historically very tight levels following the President’s January post on MBS purchases. That narrowing proved to be relatively short-lived, and MBS/Treasury spreads are now slightly above where they were prior to that January post.

Another noteworthy aspect of the GSEs monthly summaries was that the market value sensitivities of both GSEs’ total investment portfolios to a rise in interest rates continued to increase to historically very high levels in July.

It is not at first glance clear while both GSEs, and especially Freddie Mac, became more “comfortable” with these increases in interest-rate risk measures over the last year. One possibility, suggested by discussions in 10-Q’s/10-K’s, is that Freddie Mac (and apparently to a lesser extent Fannie Mae) increased significantly the duration/maturities of its/their corporate and operating liquidity portfolios (mainly repos and Treasuries) over this period in order to reduce the “exposure” of their respective earnings to declining short-term interest rates. While not a compelling argument, it appears that may have been the GSEs rationale, as both appeared to expect the Federal Reserve to continue to ease monetary policy throughout 2025 and 2026. (Prior to 2025 the maturities of the GSEs’ corporate and operating liquidity portfolios were very short.)

It is interesting to note Bill Pulte became director of the Federal Housing Finance Agency on March 14, 2025, close to the time that the GSEs (and especially Freddie Mac) began letting their interest-rate risk sensitivity measures to increase. While this may be coincidence, it also may not be!

Update on MBS Yields and Spreads

Current-coupon MBS (CCMBS) yields have traded in a pretty narrow range in August, and closed yesterday right around the average yield so far this month – but well above the average for the first half of the year. CCMBS/Treasury yields have also been historically very stable this month, at levels way above the “silly tights” following the President’s January MBS purchase post but also historically on the tight side (excluding, of course, periods where the Fed was intervening in the MBS market).

In the June Case-Shiller house price index released on Tuesday, the seasonally adjusted National Index (SA) was reported as being 79.8% above the bubble peak. However, in real terms, the National index (SA) is about 8.1% above the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is 0.2% above the bubble peak.

People usually graph nominal house prices, but it is also important to look at prices in real terms. As an example, if a house price was $300,000 in January 2010, the inflation adjusted price would be $459,000 today (a 53% increase). That is why the second graph below is important - this shows "real" prices.

The third graph shows the price-to-rent ratio, and the fourth graph is the affordability index. The last graph shows the 5-year real return based on the Case-Shiller National Index.

Nominal House Prices

The first graph shows the monthly Case-Shiller National Index SA, and the monthly Case-Shiller Composite 20 SA in nominal terms as reported.

In nominal terms, the Case-Shiller National index (SA) is at an all-time high, and the Case-Shiller Composite 20 index (SA) is just below the all-time high.

Real House Prices

The second graph shows the same two indexes in real terms (adjusted for inflation using CPI).

In real terms (using CPI), the National index is 4.1% below the recent peak in 2022, and the Composite 20 index is 3.8% below the recent peak in 2022.

The real National index and the Comp-20 index both decreased in May.

It has now been 49 months since the real peak in house prices. Typically, after a sharp increase in prices, it takes a number of years for real prices to reach new highs (see House Prices: 7 Years in Purgatory). There is nothing magic about “7 years”, it just made a good headline!

My initial guess on house prices was “mostly flat to a small decline in prices nationally in 2026”. With inventory growth slowing, nominal price declines are less likely this year. However, it appears real prices will decline further in 2026.

In real terms, national house prices are 8.1% above the bubble peak levels. There is an upward slope to real house prices, and it has been over 20+ years since the bubble peak, but real prices are historically high.

Price-to-Rent Ratio

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Freddie Mac reported that the Single-Family serious delinquency rate in July was 0.59%, down from 0.60% in June. Freddie's rate is up year-over-year from 0.55% in July 2025. This is close to the pre-pandemic level of 0.60%.

Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble and peaked at 3.17% in August 2020 during the pandemic.

Fannie Mae reported that the Single-Family serious delinquency rate in July was 0.59%, up from 0.58% in June. The serious delinquency rate is up year-over-year from 0.53% in July 2025, however, this rate is below the pre-pandemic lows of 0.65%.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble and peaked at 3.32% in August 2020 during the pandemic.

These are mortgage loans that are "three monthly payments or more past due or in foreclosure". Mortgages in forbearance are being counted as delinquent in this monthly report but are not reported to the credit bureaus.

Freddie Mac Multi-Family Delinquencies at Highest Rate since Financial Crisis

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This was below the consensus forecast of 630 thousand SAAR.

Sales of new single-family houses in July 2026 were at a seasonally-adjusted annual rate of 607,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 10.5 percent below the June 2026 rate of 678,000, and is 6.3 percent below the July 2025 rate of 648,000.

emphasis added

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

New home sales were below pre-pandemic levels. The second graph shows New Home Months of Supply.

The months of supply increased in July to 9.6 months from 8.5 months in June. The all-time record high was 12.2 months of supply in January 2009. The all-time record low was 3.3 months in August 2020. This is well above the top of the normal range (about 4 to 6 months of supply is normal).

The seasonally-adjusted estimate of new houses for sale at the end of July 2026 was 488,000. This is 1.9 percent above the June 2026 estimate of 479,000, and is 1.6 percent below the July 2025 estimate of 496,000.

This represents a supply of 9.6 months at the current sales rate. The months’ supply is 12.9 percent above the June 2026 estimate of 8.5 months, and is 4.3 percent above the July 2025 estimate of 9.2 months.

On inventory, according to the Census Bureau:

"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."

Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed. The third graph shows the three categories of inventory starting in 1973.

The inventory of completed homes for sale (red) - at 117 thousand - is almost quadruple the record low of 31 thousand in February 2022. This is close to the recent peak of 128 in January 2026, and above the normal level of completed homes for sale.

The inventory of homes under construction (blue) at 256 thousand is high but is 20% below the cycle peak. The inventory of homes “not started” is at 115 thousand and is at an all-time high.

The fourth graph shows new home sales for each month, Not Seasonally Adjusted (NSA), for a few selected periods. Black is the maximum sales per month during the bubble (2005) and light gray is the minimum sales during the bust (2008 - 2011). The most recent seven years are shown (2019 through 2026).

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The National index increased 0.13% month-over-month (MoM) seasonally adjusted. This followed three consecutive months with a MoM decline.

FHFA House Price Index Unchanged in June; Up 2.1% Year-over-Year

Note: The FHFA HPI is used to set the confirming loan limits.

On the FHFA index: U.S. House Prices Rise 2.1 Percent Year over Year; Up 0.3 percent Quarter over Quarter

U.S. house prices rose 2.1 percent between the second quarter of 2025 and the second quarter of 2026, according to the U.S. Federal Housing (FHFA) House Price Index (FHFA HPI®). House prices for the second quarter of 2026 rose 0.3 percent compared to the first quarter of 2026. FHFA’s seasonally adjusted monthly index for June remained unchanged from May.

All nine census divisions had positive house price changes year-over-year. The East North Central division recorded the strongest appreciation, posting a 4.5 percent increase from the second quarter of 2025 to the second quarter of 2026. The Pacific division recorded the slowest appreciation slightly above 0.0 percent.

emphasis added

Case-Shiller House Prices

From S&P S&P Cotality Case-Shiller Index Reports Annual Gain in June 2026

• The S&P Cotality Case-Shiller U.S. National Home Price NSA Index posted a 1.5% annual gain for June 2026, up from a 1.2% rise in the previous month.

• For the 13th consecutive month, U.S. home values fell in real terms, as June’s 3.5% inflation ran roughly 2 percentage points above the 1.5% home price gain.

• A nearly nine percentage point gap separated June’s strongest market (Chicago +6.9% YoY) and its weakest (Seattle -2.0% YoY), underscoring a stark regional divergence in home price trends.

“Homeowners and renters alike breathed a sigh of relief in June as inflation cooled to 3.5%, while the S&P Cotality Case-Shiller National Home Price Index posted a 1.5% annual gain, up from a 1.2% annual gain in May,” said Rebecca Kaufman, Associate Director of Commodities at S&P Dow Jones Indices. “While home prices continue to decline in real terms, lower inflation and firmer nominal home price growth in June helped slow that pace of erosion.

“For the fourth consecutive month, Chicago led all metros with a 6.9% annual increase in June, followed by New York (4.8%) and Cleveland (4.1%),” Kaufman continued. “Meanwhile, Seattle recorded the largest annual decline at 2.0%, followed by Las Vegas (-1.9%) and Denver (-1.2%). This geographic divide reflects a years-long trend, with housing markets in the Northeast and Midwest regaining strength while many Western and Sunbelt markets soften.

“Seasonal factors continue to support monthly price growth. On a non-seasonally adjusted basis, both the U.S. National Index and the 20-City Composite gained 0.4% month over month in June. After seasonal adjustment, the U.S. National Index and the 20-City Composite gained 0.1% and 0.3% month over month in June, respectively. Because June typically falls near the peak of the homebuying season, price appreciation often moderates and market activity cools in the months ahead.

“The housing market remains under pressure, with 30-year mortgage rates holding near 6.5% in June,” Kaufman concluded. “As financing costs are kept high for prospective buyers, current homeowners remain reluctant to give up the low mortgage rates secured in prior years.”
...
The S&P Cotality Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 1.5% annual gain for June. The 10-City Composite saw an annual increase of 2.9%, up from a 2.4% increase in the previous month. The 20-City Composite posted a year-over-year increase of 2.1%, up from a 1.6% rise in the previous month.
...
The pre-seasonally adjusted U.S. National and 20-City Composite Indices recorded monthly gains of 0.4%, while the 10-City Composite Index posted a 0.5% gain.

After seasonal adjustment, the U.S. National, 10-City, and 20-City Composite Indices posted 0.1%, 0.3%, and 0.2% gains, respectively.
emphasis added

This graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

The Composite 10 index was up 0.3% in June (SA). The Composite 20 index was up 0.2% (SA) in June. The National index was up 0.1% (SA) in June.

The Composite 10 NSA was up 2.9% year-over-year. The Composite 20 NSA was up 2.1% year-over-year. The National index NSA was up 1.5% year-over-year.

Annual price changes were above expectations.

And a few things to watch …

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However, for people working in the real estate business, like real estate agents, escrow officers, appraisers, and mortgage brokers, the first question is “When will the sales slump end?”

The Existing Home sales market has been in a deep slump for almost four years. This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1994 as reported by the NAR.

It appears a normal market would currently be around 5.0 to 5.5 million sales per year. And sales have averaged under 4.1 million sales (SAAR) over the last 46 months.

This slump is about the same length as the housing bust - although not as severe for those working in the industry since there were so many distressed sales during the housing bust (also new home sales have held up much better recently). The current slump is also similar in length to the 1980 and early 1990s housing slumps.

If we look back at the previous slumps, we can see the reasons for the recoveries. The 1980 slump benefited from rapidly falling mortgage rates and excellent demographics (the Baby Boomers were at the home buying age).

The 1990s slumps ended with a combination of a strong economy (strong job market, falling unemployment rate) and slightly lower mortgage rates.

And the housing bust was different. This ended with much lower prices and the market clearance of most of the distressed sales.

Will any of these factors help now? Currently we have a somewhat weak economy and job market, demographics are less favorable than earlier this decade, and mortgage rates likely will not decline sharply (without a recession) and prices are still high.

There are some negative factors too. Affordability is poor, many homeowners have low mortgage rates and are not willing to move, and older homeowners (baby boomers) tend to stay in their homes longer than younger homeowners (longer duration).

Here is some data showing the distribution of interest rates on closed-end, fixed-rate 1-4 family mortgages outstanding at the end of each quarter since Q1 2013 through Q1 2026.

The percent of outstanding loans under 4% peaked in Q1 2022 at 65.1% (now at 49.9%), and the percent under 5% peaked at 85.6% (now at 66.7%). So about 50% of homeowners with a mortgage still have rates below 4%. The percentage is declining as people need to move for life events; new jobs, babies, moving to a better location / school district, are some of the reasons people decide to move even though there is financial pain.

But most homeowners with low mortgage rates just stay in place.

And what about the approximately 40% of homeowners without a mortgage? Some of those homeowners are probably moving (or sales would have fallen further!), but most of the homeowners without a mortgage are older and tend not to move.

Time is slowly eroding this issue, and sales will likely slowly recovery over the next few years (barring a recession or other crisis). But we are still some time away from a more normal market with 5+ million sales per year.

The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 4.37 percent of all loans outstanding at the end of the second quarter of 2026, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The delinquency rate was down 7 basis points from the first quarter of 2026 and up 44 basis points from one year ago. The percentage of loans in the process of foreclosure in the second quarter of 2026 increased by 3 basis points to 0.67 percent.

“Mortgage delinquencies decreased slightly across all loan types in the second quarter of 2026. Nonetheless, the broader trend is that both delinquencies and foreclosures have increased over the past year,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The mortgage delinquency rate rose 44 basis points and the foreclosure inventory rate increased by almost 20 basis points from last year’s second quarter.”

Added Walsh, “Some loans are continuing to move to later stages of delinquency. The seriously delinquent rate – the non-seasonally adjusted percentage of loans that are 90 days or more past due or in the process of foreclosure –increased for the fourth consecutive quarter. Furthermore, FHA serious delinquencies are becoming pronounced, increasing more than 225 basis points from the previous year.”

Walsh noted that the labor market has shown recent signs of weakness, and delinquencies in other forms of consumer debt such as student loans, credit cards, and auto loans have grown in the past few years. These factors may be indicative of homeowner distress, exacerbated by stretched affordability and a slowing in home equity accumulation.

emphasis added

The following graph shows the percent of loans delinquent by days past due. Overall delinquencies decreased in Q2. The overall delinquency rate is close to pre-pandemic levels.

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This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment including multi-family residential.

From the AIA: Architecture firm billings remain weak in July

The AIA/Deltek Architecture Billings Index® (ABI) score for the month was 46.6, indicating somewhat further softening from June. The persistent downturn in business conditions now extends to nearly three and a half years, as many firms continue to struggle to grow their billings. Clients are still bringing business to firms, as inquiries into new projects rose again in July, although at a slower pace than in June. However, the value of newly signed design contracts declined further after nearly approaching growth last month.

Business conditions also remained weak at firms in all regions of the country in July. Firms located in the Northeast reported the softest conditions for the second consecutive month, while the pace of the ongoing decline slowed slightly at firms in the other three regions. Billings declined at firms of all specializations as well. While firms with multifamily residential and institutional specializations both saw slight growth earlier this year, conditions have softened since then. Firms with a commercial/industrial specialization, on the other hand, have not reported an increase in billings since four years ago this month.
...
The ABI serves as a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months.
emphasis added

• West (47.8); Midwest (46.7); South (48.7); Northeast (44.8)

• Sector index breakdown: institutional (47.4); commercial/industrial (46.7); multifamily residential (48.4).

This graph shows the Architecture Billings Index since 1996. The index was at 46.6 in July, down from 47.3 in June Anything below 50 indicates a decrease in demand for architects’ services. This index has indicated contraction for 45 of the last 46 months.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions. This index typically leads CRE investment by 9 to 12 months, so this index suggests a slowdown in CRE investment through the remainder of 2026 and into 2027.

Multi-family billings have been below 50 for 46 of the last 48 months.

Housing Starts:
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,239,000. This is 12.4 percent below the revised June estimate of 1,415,000 and is 13.5 percent below the July 2025 rate of 1,432,000. Single-family housing starts in July were at a rate of 808,000; this is 9.9 percent below the revised June figure of 897,000. The July rate for units in buildings with five units or more was 421,000.

Building Permits:
Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,443,000. This is 5.0 percent above the revised June rate of 1,374,000 and is 3.1 percent above the July 2025 rate of 1,400,000. Single-family authorizations in July were at a rate of 894,000; this is 2.5 percent above the revised June figure of 872,000. Authorizations of units in buildings with five units or more were at a rate of 490,000 in July.
emphasis added

The first graph shows single and multi-family housing starts since 2000 (including housing bubble).

Multi-family starts (blue, 2+ units) decreased month-over-month in July. Multi-family starts were down 8.9% year-over-year. Single-family starts (red) decreased in July and were down 13.5% year-over-year.

The second graph shows single and multi-family starts since 1968.

Total housing starts in July were below expectations and starts for the previous two months were revised down.

The third graph shows the month-to-month comparison for total starts between 2025 (blue) and 2026 (red).

Total starts were down 13.5% in July compared to July 2025.

Year-to-date, total starts are down 2.0% NSA compared to same period in 2025.

Housing Units Under Construction Remains Slightly Elevated

The fourth graph shows housing starts under construction, Seasonally Adjusted (SA).

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In Part 2, I will look at house prices, mortgage rates, rents and more.

House Prices

Here is an interesting graph from Realtor.com on median list house prices. According to Realtor.com, list prices peaked in 2022 (when interest rates moved sharply higher) and have moved mostly sideways for four years.

These are median prices and can be distorted by the mix, but median list prices have been down year-over-year for nine consecutive months. Also, June median prices are typically the peak for the year - so this measure of prices will likely decline through December.

The Case-Shiller National Index increased 1.1% YoY in May and will likely be up a little more in the June report (based on other data).

The Composite 10 NSA was up 2.4% year-over-year. The Composite 20 NSA was up 1.6% year-over-year. The National index NSA was up 1.1% year-over-year.

The National index decreased 0.05% month-over-month (MoM) seasonally adjusted. This was the 3rd consecutive month with a MoM decline. Note that the seasonally adjusted month-over-month Case-Shiller price was negative in the March through July 2025 period. Last year, the National index was down 0.13% MoM in June. This makes it mathematically more difficult to see further declines in the year-over-year change over the next couple of months.

Let’s review some more timely house price data …

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The key story for existing homes are:

1. Sales in July were up 0.7% YoY and still historically low.

2. Sales SAAR (seasonally adjusted annual rate) have been very low almost 4 years.

3. Months-of-supply is above pre-pandemic levels.

4. However, inventory growth has slowed significantly - and was down slightly year-over-year in July.

There are also significant regional differences.

And 2026 has been a difficult year for homebuilders. There are still a large number of completed homes for sales, a larger than normal number of unsold homes under construction and builders have been reducing prices to clear inventory.

Active Listings for Existing Homes Up Slightly Year-over-year

Realtor.com reports in the July 2026 Monthly Housing Trends: List Prices Fall as Homes Sell Faster that new listings were unchanged year-over-year in July. And active listings were up 2.1% year-over-year.

Year-over-year active listings growth remains in the low single digits. Inventory growth has been slow and steady in recent months, as the national inventory recovery has stalled out. Nationwide inventory is 11.6% below typical 2017–19 levels, about the same as last month’s 11.3% gap.

Active listing growth has slowed recently. Also note the seasonality for active listings. We should expect active listing to be mostly flat for the next few months before declining near the end of the year. Listings are still below pre-pandemic levels (2017 - 2019 on the graph).

Here is some more data on supply and sales.

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Note: The Liberty Street Economics blog today focused on “examining the current state of credit card delinquency”.

The first graph shows mortgage originations by credit score (this includes both purchase and refinance). Look at the difference in credit scores in the recent period compared to the during the bubble years (2003 through 2006). Recently there have been almost no originations for borrowers with credit scores below 620, and few below 660. A significant majority of recent originations have been to borrowers with credit score above 760.

Solid underwriting is a key reason I’ve argued Don't Compare the Current Housing Boom to the Bubble and Bust, Look instead at the 1978 to 1982 period for lessons

From the NY Fed:

Mortgage originations, measured as appearances of new mortgages on consumer credit reports and including both refinance and purchase originations, were largely steady with $505 billion newly originated in 2026Q2. The credit quality of newly originated mortgage loans was unchanged.

Here is another way to look at the credit scores by origination over time. There was a significant decline in credit scores during the housing bubble.

Transition Rates for Current Mortgages

A possible concern was the recent increase in transition rates from current to 30-60 days late. This had been steadily increasing since mortgage rates increased but has mostly flattened out recently - and is below pre-pandemic levels.

And here is the transition to serious delinquencies. Most short-term delinquencies transition back to current. The transition to seriously delinquent (90+ days) declined in Q2.

Foreclosures Decrease

Foreclosures are still well below pre-pandemic levels.

And as a “bubble” reminder, here is graph of percent new foreclosures by state (the “sand states” Nevada, California, Florida and Arizona saw that largest number of foreclosures during the housing bust). Now no state really stands out.

There is much more in the report.

Month-Over-Month

• 1.7% decrease in existing-home sales to a seasonally adjusted annual rate of 4.06 million in July.

• 1.9% decrease in unsold inventory to 1.54 million units, equal to a 4.6-month supply.

Year-Over-Year

• 0.7% increase in existing-home sales

• 2.0% increase in median existing-home sales price to $434,100
  emphasis added

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1994.

Sales in July (4.06 million SAAR) were down 1.7% from the previous month (June was revised up from 4.09 million SAAR to 4.13 million SAAR) and July sales were up 0.7% compared to the July 2025 sales rate. Sales have been very low for most of the last 4 years.

Housing Inventory Decreased Slightly in July

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory decreased to 1.54 million in July from an upwardly revised 1.57 million the previous month.

Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The third graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory was down 0.6% year-over-year (blue) in July compared to July 2025. Note that year-over-year inventory has stopped increasing and is now mostly unchanged.

Months of supply (red) was unchanged at 4.6 months in July from 4.6 months the previous month. Looking back to pre-pandemic levels, in June 2019 months-of-supply was at 4.2 months, so there is more supply now, on a months-of-supply basis, than prior to the pandemic! Even though inventory is still down compared to 2019, sales have fallen even more - pushing up months-of-supply.

Sales Year-over-Year and Not Seasonally Adjusted (NSA)

The fourth graph shows existing home sales by month for 2025 and 2026.

Sales were up year-over-year for the 4th consecutive month in July.

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Press Release: ICE Mortgage Monitor: Mortgage Holder Equity Climbs to Record $18 Trillion as Annual Home Price Growth Reaches 14-Month High

Intercontinental Exchange, Inc. … today released its August 2026 Mortgage Monitor Report, which found that mortgage holder equity reached $18 trillion for the first time on record while annual home price growth reached a 14-month high in July.

“Mortgage holder equity hitting $18 trillion is a remarkable milestone — one that reflects just how much wealth American homeowners have built,” said Andy Walden, head of mortgage and housing market research at ICE. “The spring market provided a meaningful boost to both prices and equity, and we’re seeing those tailwinds work through the data now. At the same time, rates have trended higher since early in the year, which may soften how much additional acceleration we’re likely to see in the second half.”

Key findings from the August Mortgage Monitor include:

• July annual home price growth hits 14-month high

Annual home price growth rose to 1.5% in July, marking its fifth consecutive month of acceleration and its steepest single-month increase since mid-2023. The jump reflects lower rates early in 2026 injecting demand into the market, as weak summer 2025 prices roll out of the comparison window. However, as rates have moved higher, one-month adjusted price gains have softened, suggesting that further acceleration in the second half of the year may be limited.

• Equity hits record high; negative equity elevated among recent-vintage borrowers

Mortgage holder equity hit $18 trillion in Q2, a new all-time high, as lower rates earlier in the year supported renewed home price appreciation. Within that total, 47.5 million mortgage holders hold $11.7 trillion in tappable equity, averaging approximately $212,000 per borrower.

Despite the strong overall picture, approximately 813,000 borrowers are underwater — up 44% year-over-year — concentrated among FHA and VA borrowers, those who purchased between 2022 and 2025, and in Texas and Florida where price declines from peak have been most pronounced.

• Rate variation among similarly qualified borrowers

Borrowers with nearly identical credit profiles are locking meaningfully different interest rates, averaging a 38-basis-point spread among conforming purchase borrowers in 2026. On a $300,000 mortgage, that difference translates to roughly $76 per month and approximately $5,790 in additional costs over the first five years.

Among FHA and VA borrowers, that spread widens to 47 and 48 basis points respectively, with the widest variation concentrated among borrowers with lower credit scores, smaller loan balances, higher loan-to-value ratios, and those using government-backed loan programs.

• Real estate owned (REO) properties are selling at historically wide discounts

Buyers purchasing bank-owned REO properties did so at a 27.5% discount to comparable sales in June — among the largest in over two decades. Notably, the widest discounts relative to their own histories are appearing in markets that typically offer the least: Florida, Texas, California and the Mountain West. However, foreclosure rates and distressed purchase opportunities remain scarce in those areas.

emphasis added

Mortgage Delinquency Rate Increased in June

Here is a graph of the national delinquency rate from ICE. Overall delinquencies increased in June seasonally, but remain below the pre-pandemic levels. Source: ICE McDash

• The national delinquency rate rose 5 basis points to 3.55% in June — roughly half the typical seasonal increase — but remains 60 basis points below the pre-pandemic benchmark of 4.16% set in June 2019.

• The share of mortgage holders in early-stage delinquency — one or two payments behind — remains 22% below the June 2019 benchmark.

• While serious delinquencies dipped seasonally to a six-month low in June, the number of borrowers 90-plus days past due or in active foreclosure is up 189,000 from a year ago, with the share of these borrowers having returned to slightly above pre-pandemic levels.

• The bulk of that increase remains concentrated in FHA and VA mortgages.

• The share of FHA loans seriously past due, including active foreclosures, stands at 5.7%, up 1.8 percentage points from a year ago, while 2.3% of VA loans are seriously past due, up 0.4 percentage points year over year.

• Among portfolio-held and GSE mortgages, the share of borrowers three or more payments past due is flat compared to a

  year ago.

House Prices Up 1.5% Year-over-year in July

Here is the year-over-year in house prices according to the ICE Home Price Index (HPI). The ICE HPI is a repeat sales index. ICE reports the median price change of the repeat sales. The index was up 1.5% year-over-year in mid-July.

• ICE’s July Home Price Index shows annual home price growth accelerating for the fifth consecutive month to 1.5%, marking the largest single-month jump in more than three years and the highest annual growth rate in 14 months.

• The July increase was driven by a combination of lower rates in early 2026 pulling demand into the market and a weak summer 2025 rolling out of the 12-month comparison window.

• The latest data shows seasonally adjusted monthly price gains beginning to moderate, with prices rising 0.19% in July, down from 0.27% in March and April, as mortgage rates have moved back above 6.5%.

• With recent gains still outpacing last summer’s soft market, annual growth is likely to continue accelerating over the next few months — though July’s seasonally adjusted annualized rate of just 2.2% suggests meaningful acceleration is unlikely under current rate, affordability and inventory conditions.

• Single-family home prices are up 2.0% year over year while condo prices are down 0.7%, with half of major markets still seeing condo prices below year-ago levels and 97 of the 100 largest markets seeing condos underperform single-family homes.

• Upstate New York led the country in home price gains in July, with Rochester (8.1%) and Syracuse (7.1%) posting the largest year-over-year gains among major U.S. markets.

• Cape Coral, Fla., saw the largest year-over-year decline at 3.2%, followed by Stockton, Calif. (-2.3%) and Austin, Texas (-2.0%).

• More than three-quarters of markets saw prices rise from a year ago — the largest share in more than a year — with Rochester’s 8.1% growth rate also marking the strongest reading among major markets in more than a year.

• Two-thirds of markets are seeing seasonally adjusted annualized home price growth rates above their trailing 12-month gains, suggesting modest acceleration in annual home price growth may be on the horizon.

• The largest gaps between current and trailing growth rates are concentrated in upstate New York and Ohio, suggesting annual price growth may continue to trend higher in those areas.

• At the other end of the spectrum, seasonally adjusted gains are running below annual price growth across much of Florida, where many markets continue to see year-over-year declines.

There is much more in the mortgage monitor.

July sales were mostly for contracts signed in May and June, and mortgage rates averaged 6.44% in May and 6.49% in June (Higher than for closed sales in June).

Closed Sales in July

In July, sales in these early reporting markets were down 1.0% YoY. Last month, in June, these same markets were up 7.0% year-over-year Not Seasonally Adjusted (NSA).

Important: There were the same number of working days in July 2026 (22) as in July 2025 (22). So, the year-over-year change in the headline SA data will be similar to the change in NSA data (there are other seasonal factors).

Notes for all tables:

1. New additions to table in BOLD.

2. Northwest (Seattle)

3. Comparison to 2019 ONLY includes local markets with available 2019 data!

For the previous month, there was one more working days in June 2026 (21) as in June 2025 (20) So, the YoY change in the headline SA data was less the change in the NAR report than the NSA data.

Sales in all of these markets are down sharply compared to July 2019.

This graph shows existing home sales by month for 2025 and 2026, on a Seasonally Adjusted Annual Rate (SAAR) basis. Last year, the NAR reported sales in July 2025 were at 4.03 million SAAR.

This early data suggests that July existing sales (as reported seasonally adjusted by the NAR) will likely be mostly unchanged year-over-year - and perhaps slightly below the consensus forecast of 4.07 million SAAR (although this is based on very limited data released so far).

New Listings in July

For these areas, new listings were up 3.3% year-over-year.

Last month, new listings in these markets were up 0.7% year-over-year.

New listings in these markets are mostly down compared to July 2019.

Active Inventory in July

Inventory was up 5.4% year-over-year. Last month inventory in these markets was up 3.4% YoY.

Comparing to July 2019, inventory is up in most of these markets (down in San Diego).

This was just a few early reporting markets.

First, here is some timely data from Altos Research on active single-family inventory. This graph shows the seasonal pattern for active single-family inventory since 2015 through last Friday (July 31st).

The red line is for 2025. The black line is for 2019.

Inventory was up 0.8% compared to the same week in 2025 (the previous week it was up 0.6%), and down 9.3% compared to the same week in 2019 (last week it was down 9.8%).

This slowdown in inventory growth is a key story in 2026.

Another metric that Altos reports is the median list price. This graph from Altos shows the median list price since 2021. The 7-day median list price is down slightly year-over-year.

The median list price has been mostly unchanged for the last 4 years (other than the usual seasonal swings)!

Meanwhile demand is weak …

MBA: Mortgage Applications Decrease in Latest Weekly Survey

From the Mortgage Bankers Association: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 2.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 31, 2026.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week and was 9 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 3 percent lower than the same week one year ago.

“In the wake of the July FOMC meeting, longer-term rates increased, with mortgage rates reaching their highest level in more than a year, with the 30-year fixed mortgage rate rising to 6.81 percent,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Application volume for both refinance and purchase loans declined for the week, and are now running behind last year’s pace, indicating that higher mortgage rates have weakened overall demand.” emphasis added

This graph shows the seasonally adjusted MBA mortgage purchase index. According to the MBA, purchase activity is down 3% year-over-year unadjusted.

Red is a four-week average (blue is weekly). Purchase application activity remains depressed.

The second graph shows the refinance index since 1990.

The refinance index is historically very low and has declined with the increase in mortgage rates.

Inventory growth has slowed, but demand is weak - so prices have increased slightly year-over-year.

Apartment List: Asking Rent Growth -1.1% Year-over-year

From ApartmentList.com: Apartment List National Rent Report

Rents up 0.2% month-over-month, down 1.1% year-over-year

The national median rent ticked up by 0.2 percent in July, increasing for the sixth consecutive month. We are now approaching the tail end of the peak moving season, and the off-season cooldown in prices is likely to begin in another month or two. This trend is in line with typical seasonal patterns – prices generally increase in the spring and summer when most moves take place, and then soften in the fall and winter as moving activity slows.

Our national vacancy index – which measures the average vacancy rate of stabilized properties in our marketplace (i.e. those that have completed their initial lease-up phase) – hit a peak of 7.3 percent in February, marking the highest level since we started tracking occupancy in 2017. Since then however, the vacancy rate has been slowly creeping down, and now sits at 7.2 percent. This marks the first time that we have seen a decline in our national vacancy index since late 2021. After bottoming out amid the pandemic era housing frenzy, the vacancy rate gradually loosened from record lows to record highs, but it appears to have finally hit its peak.

Realtor.com: 35th Consecutive Month with Year-over-year Decline in Rents

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Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.32% month-over-month (MoM) on a seasonally adjusted (SA) basis in June.

On a year-over-year (YoY) basis, the National FMHPI was up 2.1% in June, up from up 1.6% YoY in May. The YoY increase peaked at 19.2% in July 2021, and for this cycle, and bottomed at up 1.0% YoY in January 2026.

The second graph shows the month-over-month (MoM) change in the national FMHPI, seasonally adjusted.

The seasonally adjusted FMHPI increased 0.32% MoM on a seasonally adjusted (SA) basis in May.

Last year, the FMHPI decreased slightly in both May, June and July, so the year-over-year change next month will likely be about the same or slightly higher as in June.

14 States and D.C. have seen price declines Seasonally Adjusted

As of June, 14 states and D.C. were below their previous peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peaks are in D.C. (-3.4%), Colorado (-2.4%), Washington (-1.6%) and South Carolina (-1.2%).

For cities (Core-based Statistical Areas, CBSA), 128 of the 387 CBSAs are below their previous peaks.

Here are the 30 cities with the largest declines from the peak, seasonally adjusted. Punta Gorda, Austin and Cape Coral has seen double digit price declines. Note that the top 5 cities with the largest price declines are in Florida and Texas.

Here is a comparison of year-over-year change in the FMHPI, median house prices from the NAR, and the Case-Shiller National index.

The FMHPI and the NAR median prices (up 1.8% YoY in June) appear to be leading indicators for Case-Shiller. The Case-Shiller index was up 1.1% YoY in May. The FMHPI is suggesting the Case-Shiller index will likely be up slightly more year-over-year in the June report compared to May.

Since inventory increased in 2025, while sales matched the lowest level since 1995, national house price growth (year-over-year) slowed. However, inventory growth has slowed recently, and there are also significant regional differences.

Fannie Mae and Freddie Mac recently released their monthly volume summaries for May, and these reports showed that their combined holdings of Agency MBS declined last month. Both GSEs also reported that their market-value based interest-rate risk measures continued to increase in May. Below are some selected statistics…

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