June 25, 2026

Weekly Mortgage & Market Update

Week of June 15, 2026 in Review

Markets received encouraging news as the United States and Iran agreed to extend their ceasefire and reopen the Strait of Hormuz, easing concerns about global energy supplies. Meanwhile, the Federal Reserve held rates steady in Kevin Warsh's first meeting as Chair, while housing data delivered mixed results.

Fed Leaves Rates Unchanged

In Kevin Warsh's first meeting as Fed Chair, the Federal Reserve unanimously voted to leave the Federal Funds Rate unchanged at 3.50% to 3.75%. This marks the fourth consecutive meeting without a rate change following cuts late last year.

While the Federal Funds Rate does not directly determine mortgage rates, it influences borrowing costs throughout the economy and helps shape the overall interest rate environment.

Warsh emphasized that the committee "will deliver price stability" and announced five new task forces focused on Fed communications, economic data, the balance sheet, productivity and jobs, and the Fed's inflation framework. The changes suggest a focus on modernizing how the Fed gathers information, communicates with the public, and evaluates economic conditions.

Housing Construction Slows as Builders Remain Cautious

Housing starts fell 15.4% from April to an annual rate of 1.18 million units in May, the lowest level since 2020 and well below expectations.

Building permits, a key indicator of future construction activity, slipped 0.7% to an annual rate of 1.413 million units, largely in line with forecasts.

Builder sentiment also weakened. The National Association of Home Builders' Housing Market Index declined two points to 35 in June. Readings below 50 indicate more builders view conditions as poor than good.

Affordability challenges, mortgage rates, and construction costs continue to weigh on builder confidence. While the market needs additional inventory, new supply takes time to move through the permitting, construction, and completion process.

Pending Home Sales Continue to Rise

Pending home sales increased 3.8% from April to May, beating expectations and marking the fourth consecutive monthly increase. Sales were also 4.8% higher than a year ago, with gains reported across all four major U.S. regions.

According to NAR Chief Economist Lawrence Yun, a "late spring buyer rush" suggests demand remains stronger than many expected. If demand continues while inventory remains limited, competition for available homes could remain elevated.

Economic Snapshot: Consumer Spending and Jobless Claims

Retail sales rose 0.9% in May, significantly exceeding economists' expectations. Sales also remained stronger than expected after excluding gasoline purchases, indicating broader consumer spending strength rather than simply higher fuel prices.

Initial unemployment claims remain relatively low at approximately 226,000. However, some displaced workers may be turning to freelance or gig work instead of filing for unemployment benefits.

Continuing unemployment claims remained elevated at 1.81 million, suggesting many job seekers are taking longer to find new employment.

Family Hack of the Week

Celebrate National Mango Month with this refreshing Mango Sorbet recipe that serves 4.

Freeze 4 cups of chopped ripe mango for at least 4 hours or overnight. Toast 2 tablespoons unsweetened coconut flakes at 350°F for about 4 minutes.

Blend the frozen mango with 1/4 to 1/2 cup hot water until smooth and creamy. Scoop into bowls, top with fresh lime juice, a drizzle of honey, and the toasted coconut, then serve immediately.

What to Look for This Week

Markets will receive May New Home Sales data on Wednesday.

Thursday brings several key economic reports, including the Fed's preferred inflation measure, Personal Consumption Expenditures (PCE), the final reading of first-quarter GDP, and the latest jobless claims data.

Investors will also be watching whether the United States and Iran's agreement to extend their ceasefire and reopen the Strait of Hormuz helps reduce pressure on energy prices, which could support a more favorable inflation outlook in the months ahead.

SOURCE:MBSHighway