August 30, 2026

Weekly Mortgage & Market Update

Week of August 17, 2026 in Review

The latest home price data highlighted the long-term wealth-building potential of homeownership. Meanwhile, home sales and construction cooled in July, and the Fed's meeting minutes reinforced the importance of upcoming inflation and jobs data.

How Homeownership Can Build Wealth Over Time

According to ICE's latest Home Price Index, home prices increased 0.21% from July to August and are now 1.71% higher than a year ago.

Based on the pace of appreciation over the past six months, home prices are on track for approximately 3% annual appreciation.

For perspective, a $500,000 home appreciating 3% annually would gain roughly $15,000 in value in the first year, $80,000 over five years, and $172,000 over 10 years—demonstrating how steady appreciation can build meaningful wealth over time.

New Home Construction Slows

Housing starts fell 12.4% in July following a strong June, coming in below expectations and bringing the annual pace to 1.24 million units.

Building permits, an indicator of future construction, rose 5% from June to an annual pace of 1.44 million units.

Builder sentiment remains cautious. The National Association of Home Builders Housing Market Index increased one point in August to 35. Readings below 50 indicate more builders view market conditions as poor than good.

Household formations are running at an annual pace of approximately 1.4 million households, above the current pace of housing starts. Builders have pulled back as mortgage rates, affordability challenges, and higher construction costs have weighed on the market.

If rates decline and more buyers return, additional housing supply will be needed to meet pent-up demand. Because new homes take time to permit, build, and complete, limited inventory could continue to support home prices as demand strengthens.

Pending Home Sales Fall Again

Pending home sales, which track signed contracts on existing homes, declined 2.3% from June to July, marking the second consecutive monthly decline. Sales fell across all four regions and were 2.2% lower than a year ago.

NAR Chief Economist Lawrence Yun noted that the highest mortgage rates of the year arrived during the summer, contributing to fewer contract signings.

Fed Minutes: Key Takeaways

Minutes from the Federal Reserve's July meeting reinforced the importance of upcoming inflation and labor market data.

The Fed voted to keep the Federal Funds Rate unchanged, with three policymakers dissenting in favor of a quarter-point increase. The minutes also showed that "many participants" believed rate hikes could be appropriate if inflation failed to decline.

Since that meeting, inflation data has been more encouraging, with both consumer and wholesale inflation coming in at or below expectations in July. At the same time, the July jobs report showed job losses and other signs of labor market weakness.

Cooler inflation and a softer labor market could reduce pressure on the Fed to raise rates. Current expectations favor the Fed holding rates steady in September, although policymakers will continue monitoring inflation, employment, and geopolitical developments.

Jobless Claims Pulse Check

Initial unemployment claims declined slightly to 206,000 last week, while continuing claims remained elevated at 1.799 million.

Initial claims remain relatively low by historical standards, although some displaced workers may turn to freelance, contract, or gig work rather than filing for unemployment benefits.

Meanwhile, elevated continuing claims suggest unemployed workers are taking longer to find their next job.

Family Hack of the Week

Celebrate National Banana Lovers Day on August 27 with these Banana Muffins from Food Network. This recipe yields 18 muffins.

Preheat the oven to 325°F. Combine 3 cups flour, 1 teaspoon baking soda, 1 teaspoon salt, and ½ teaspoon each of baking powder, cinnamon, and nutmeg.

Separately, beat together 2 cups sugar, 1 cup vegetable oil, 3 eggs, and 1 tablespoon vanilla. Stir in 4 coarsely mashed ripe bananas, then add the dry ingredients and mix just until combined.

Divide among 18 prepared muffin cups and bake for approximately 25 minutes, until golden brown and a tester inserted in the center comes out clean. Cool slightly and serve warm.

What to Watch Ahead

Tuesday brings New Home Sales and home price reports from Case-Shiller and the FHFA.

Wednesday features the week's biggest economic report, Personal Consumption Expenditures (PCE) inflation, along with the second estimate of second-quarter GDP. Weekly jobless claims follow Thursday.

Investors will also be watching the Fed's Jackson Hole Economic Symposium, which begins Thursday and brings together economists, central bankers, and policymakers from around the world.

Source: MBSHighway