Weekly Mortgage & Market Update

Week of August 24, 2026 in Review

Fed Chair Kevin Warsh emphasized continued progress on inflation but stopped short of committing to a September rate hike. Home prices remained strong even as new home sales slowed.

Warsh Signals Inflation Remains a Top Concern

*Personal Consumption Expenditures July 2026*

At Jackson Hole, Fed Chair Kevin Warsh reiterated that returning inflation to the Fed's 2% target remains a priority.

Headline PCE rose 0.2% in July, with annual inflation holding at 3.7%. Core PCE, which excludes food and energy, also rose 0.2%, with annual core inflation unchanged at 3.3%. The Dallas Fed's Trimmed Mean measure showed underlying inflation at 2.3%, much closer to the Fed's target.

Warsh acknowledged recent progress but said inflation has not shown enough sustained improvement and there is still "work to do." He left a potential rate hike on the table but did not commit to one in September.

Warsh also said the economy has strengthened, consumer demand remains healthy, and labor conditions—including 4.1% unemployment and low jobless claims—are consistent with full employment.

New Home Sales Slow in July

New home sales fell 10.5% in July to a seasonally adjusted annual rate of 607,000, below expectations. June sales were revised higher by 50,000 to 678,000. July sales were 6.3% lower than a year ago.

Sales increased in the Northeast and West but declined 43% in the Midwest and 13% in the South. The report tracks signed purchase contracts and reflects buyers shopping during July.

The median new home price declined 2.3%, but this was influenced by the mix of homes sold. Sales between $300,000 and $399,999 increased notably, pulling the median lower. A lower median price does not necessarily indicate falling home values, and broader data continues to show nationwide appreciation.

Home Prices Build on Recent Gains

*Case-Shiller Home Price Index July 2026*

Case-Shiller reported home prices rose 0.4% in June, bringing the total gain since March to 2.7%. Seasonally adjusted prices increased 0.1%, while home values are 1.5% higher than a year ago.

FHFA reported seasonally adjusted prices were flat in June, while prices for homes backed by conventional loans were 2.3% higher annually.

For perspective, a $500,000 home appreciating 3% annually would gain approximately $15,000 in value in the first year, illustrating the long-term wealth-building potential of homeownership.

Economic Snapshot: GDP and Unemployment

Second-quarter GDP grew at an annualized rate of 1.5%, unchanged from the initial estimate and down from 2.1% in the first quarter.

Growth was supported by consumer spending, business investment—including AI data centers—and exports, while lower government spending and higher imports offset some gains.

Initial unemployment claims declined to 203,000, while continuing claims remained elevated at 1.78 million. Low initial claims may partly reflect workers turning to gig or freelance work, while continuing claims suggest some unemployed workers are taking longer to find jobs.

Family Hack of the Week

Celebrate National Honey Month with this Honey Vanilla Pound Cake from Food Network. Makes one 8-inch loaf.

Preheat the oven to 350°F. Grease and flour an 8-inch loaf pan and line the bottom with parchment.

Combine 4 extra-large eggs, 2 tablespoons honey, 2 teaspoons vanilla, and 1 teaspoon lemon zest. Separately, cream ½ pound room-temperature unsalted butter with 1¼ cups sugar for 3 to 4 minutes, then add the eggs one at a time.

Sift together 2 cups cake flour, 1 teaspoon kosher salt, and ½ teaspoon baking powder. Gradually add to the wet ingredients and mix just until combined. Bake for 50 to 60 minutes. Cool in the pan for 15 minutes, then transfer to a rack.

What to Watch Ahead

Labor data takes center stage this week, with Job Openings Tuesday, private-sector payrolls Wednesday, and weekly jobless claims Thursday.

Friday brings the closely watched employment report, including nonfarm payrolls and the unemployment rate.

Source: MBSHighway