Mixed Housing Data 

Political headlines again caused volatility for mortgage markets this week but had little lasting impact. The economic data also had just a minor impact, and mortgage rates ended the week slightly lower.

Sales of new homes displayed better performance in March, rising 7% from February, exceeding the consensus forecast. The median new-home price of $403,600 was down 8% from last year at this time. The supply of new homes stands at the highest level since 2007.

The latest home building data fell well short of expectations. Overall housing starts in March declined 11% from February, and single-family starts sank 14% to the lowest level since July 2024. Single-family building permits, a leading indicator of future construction, dropped just a bit from February. A separate survey of home builder sentiment on housing market conditions from the NAHB unexpectedly increased. However, builders continued to report that uncertainty about tariffs and rising costs were significant areas of concern.

Rate volatility and economic uncertainty took a toll on mortgage applications this week, according to the Mortgage Bankers Association (MBA). Applications to refinance dropped 20% from last week but still were 43% higher than one year ago. Purchase applications fell 7% from the prior week and were up a little from last year at this time.

Investors will continue to look for additional information about tariff policies. For economic reports, gross domestic product (GDP), the broadest measure of economic activity, and Core PCE inflation will be released on Wednesday. The ISM national manufacturing sector index will come out on Thursday. The key Employment report will be released on Friday, and these figures on the number of jobs, the unemployment rate, and wage inflation are always closely watched.