Category Archives: Finance & Economics

Mortgage rates this week rose to the highest level since August, more bad news for home shoppers during what is usually the busiest time of the year for home sales. The average rate on a 30-year fixed mortgage rose to 6.51% this week, from 6.36% last week, Freddie Mac said Thursday.  Higher mortgage rates and expensive home prices are keeping many would-be buyers on the sidelines. Rising costs in many places for home insurance and property taxes have also spooked buyers.  The rise in mortgage rates this year marks a reversal from the second half of 2025. …But that brief momentum has stalled. The war in Iran and subsequent rise in oil prices have led to worries about inflation and dampened expectations for the spring home-buying season. Existing-home sales were flat in April, well below economists’ expectations. …Mortgage rates look poised to keep rising. [to access the full story a WSJ subscription is required]

In a significant victory for NAHB and the broader housing sector, the US House of Representatives approved an amendment to the 21st Century ROAD to Housing Act that removes a build-to-rent (BTR) sales provision that would have hurt affordability and reduced much-needed housing supply. NAHB led the push to remove the provision, which would have required purpose-built single-family rental homes to be sold within seven years. According to NAHB and the Urban Institute, the measure could have cut rental housing supply by 40,000 to 72,000 units each year. It also would have displaced thousands of tenants annually, shrinking the rental market and putting further pressure on rents. At a time of severe housing challenges, BTR remains one of the few market segments adding tens of thousands of homes that otherwise would not be built. The amended House bill also includes several other NAHB-backed measures to boost housing production.

US housing starts declined in April as construction of single-family homes dropped by the most in nearly a year, suggesting builders are growing cautious amid higher mortgage rates. New residential construction decreased 2.8% last month to an annualised rate of 1.47 million homes, according to government figures released on Thursday. Starts of single-family homes declined 9%, the most since August, to an annualised 930,000 pace. Multifamily housing starts, however, rose more than 10% to the highest level since May 2023. The report also showed single-family permits, a leading indicator of future construction, fell 2.6% to the lowest level since August. The figures suggest home builders remain focused on working off a still-elevated inventory of new properties. …Numerous challenges remain for a sustained pickup in home building, including rising mortgage rates, flagging consumer confidence and stretched household budgets.

• Related in the Real Economy: US Housing recovery will not happen this year

US Home Builder confidence posted a modest gain in May even as buyers grapple with rising mortgage rates and economic uncertainty while builders continue to contend with elevated land, labor and construction costs. Builder confidence in the market for newly built single-family homes increased three points to 37 in May, according to the NAHB/Wells Fargo Housing Market Index (HMI). …The survey also revealed that 32% of builders cut prices in May, down from 36% in April. The average price reduction was 6%, up from the 5% figure in April. …All three of the major HMI indices posted gains in May, as some buyers who had been holding back decided to move forward this spring. The HMI index gauging current sales conditions rose three points to 40 from April to May, the index measuring future sales increased three points to 45 and the index charting traffic of prospective buyers posted a three-point gain to 25.

The House has introduced an NAHB-supported amendment to major housing legislation that would bring greater certainty to the housing market and increase the supply of attainable housing. The House amendment to the 21st Century ROAD to Housing Act that was spearheaded by House Financial Services Chairman French Hill and Ranking Member Maxine Waters makes three key improvements: Removes the forced sale of purpose-built single-family homes. …Increases and indexes multifamily loan limits. FHA-insured multifamily loan limits have remained static for 12 years and do not reflect market conditions. …Provides meaningful relief to community banks.

The amended legislation includes several additional measures to help increase housing production: HOME program reforms. Point-access buildings. …Publicly owned land database. ….[and] USDA infill environmental review exemption.  The House plans to vote on this amended package to the 21st Century ROAD to Housing Act as soon as the week of May 18. 

From March to April, the Producer Price Index (PPI) for the vast majority of commodities tracked by the US Census Bureau moved or up or down by single-digit percentages. Exceptions: Jet fuel increased 36.4%; Asphalt increased 29.4%; and softwood lumber increased 12.3%. Overall, the PPI for final demand increased 1.4% in April (seasonally adjusted), per the latest U.S. Bureau of Labor Statistics report. …The latest PPI report also sheds light on recent pricing movement for key building materials. Softwood lumber, which has seen supply tighten amid spiraling fuel costs and economic volatility, saw a sharp month-to-month bump (+12.3% from March to April 2026) after price drops early in the year. Despite the jolt, year-over-year prices for softwood lumber are just 0.9% higher than they were last year. …According to Associated Builders and Contractors, overall construction input prices are now 7% higher than one year ago, while nonresidential construction input prices are 7.4% higher.

US inflation accelerated to a nearly three-year high in April, driven by continued increases in energy costs from the Iran war. Energy costs drove more than 40% of the monthly increase, with national gasoline prices soaring above $4.50 in early May for the first time since July 2022. With energy costs straining household budgets and eroding purchasing power, this marks the first time inflation has outpaced wage growth since May 2023. As the ceasefire remains tenuous, energy prices are expected to remain elevated for months, continuing to put upward pressure on inflation and complicating the Fed’s path toward its 2% target. …On a non-seasonally adjusted basis, the Consumer Price Index (CPI) rose by 3.8% in April from a year ago, following a 3.3% increase last month, according to the BLS latest report. This was the largest annual increase since May 2023.

The Producer Price Index for final demand increased 1.4% in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. Final demand prices advanced 0.7% in March and 0.6% in February. The April increase is the largest advance since rising 1.7% in March 2022. …U.S. producer prices for softwood lumber rose 12.3% in April and increased 0.9% over the past 12 months, according to the U.S. Bureau of Labor Statistics. April changes also included a 0.5% increase in hardwood lumber after a 0.1% decline in March. Millwork rose 0.7%, while plywood increased 1.2%.

The U.S. labor market continued to show resilience in April, with job growth persisting despite elevated interest rates and rising geopolitical uncertainty related to the Iran conflict. The unemployment rate held steady at 4.3%. Hiring gains were concentrated in health care, transportation and warehousing, and retail trade. Wage growth accelerated modestly in April, with average hourly earnings rising 3.6% year-over-year. …Employment in the overall construction sector rose by 9,000 jobs in April, following a downwardly revised gain of 16,000 in March. Within the industry, residential construction shed 10,400 jobs, while non-residential construction added 19,000 jobs. …The six-month moving average of job gains for residential construction remains negative, reflecting an average monthly loss of 2,333 jobs and declines in three of the past six months. However, over the last 12 months, residential construction has shed a net of 49,200 jobs, marking the 14th consecutive annual decline and the longest stretch of annual losses since the Great Recession.

Consumer sentiment was essentially unchanged this month, coming in a scant 1.6 index points below April’s reading and comparable to the trough reached in June 2022. While the expectations index inched up, current conditions fell back about 9%, owing to a surge in concerns about high prices both for personal finances as well as buying conditions for major purchases. Real income expectations continued a decline that began in March. …Year-ahead inflation expectations softened a touch from 4.7% last month to 4.5% this month. The current reading still substantially exceeds the 3.4% reading seen in February prior to the start of the Iran war, along with all 2024 readings and the 2.3-3.0% range seen in the two years pre-pandemic. Long-run inflation expectations inched down from 3.5% in April to 3.4% in May. In 2024, values ranged between 2.8% and 3.2%, while in 2019-2020, they were consistently below 2.8%.

MCLEAN, Virginia — Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 6.37%. “The 30-year fixed-rate mortgage averaged 6.37% this week,” said Sam Khater, Freddie Mac’s Chief Economist. “Recent data points to slightly better conditions for buyers with a boost in new-home sales, median new-home prices being down to their lowest level since July 2021, and higher inventory than in recent years. Together, these trends could modestly ease affordability pressures through the spring homebuying season.” …The 30-year FRM averaged 6.37% as of May 7, 2026, up from last week when it averaged 6.30%. A year ago at this time, the 30-year FRM averaged 6.76%.

There is a research gap in localized remodeling data. To address this, NAHB is debuting a new economic resource: the State Projections of Remodeling (SPR). …SPR will provide a quarterly, state-level estimation of the market share and total dollar value of remodeling spending one month after the release of the NAHB Remodeling Market Index (RMI). …During the fourth quarter of 2025, remodeling spending at the national level came in at $280.1 billion on a seasonally adjusted annualized rate (SAAR), accounting for 37.7% of total private residential fixed investment. Even though spending fell for the second consecutive quarter from $282.6 in Q3 2025, remodeling spending has been larger than single-family construction spending for five straight quarters. California had the largest market share of remodeling spending at 7.9%, or $22.1 billion. This is followed by Texas (7.0%, or $19.7 billion), Florida (5.5%, or $15.3 billion), New York (3.9%, or $11.0 billion), and North Carolina (3.0%, or $8.4 billion).

Annual spending on improvements and maintenance to owner-occupied homes is projected to slow sharply in early 2027, according to the latest Leading Indicator of Remodeling Activity (LIRA) from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The new LIRA shows year-over-year growth in home renovation and repair spending of just 0.5% by the first quarter of 2027—a pace that remains positive in nominal terms but is less than overall inflation. “Growth in remodeling permits and retail spending on building products has been flat recently, signaling stagnant interest in home improvement,” said Rachel Bogardus Drew, Director of the Remodeling Futures Program at the Center. “Even so, homeowners are expected to maintain spending at roughly last year’s levels, with total improvement and repair expenditures edging up modestly to $523 billion in early 2027.” 

US mortgage rates continued to increase in April as ceasefire negotiations remain inconclusive. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.34% in April, 16 basis points (bps) higher than March. The average 15-year rate also increased by 13 bps to 5.69%. Despite the recent increase, both rates remain lower than a year ago by 39 bps and 21 bps, respectively. The 10-year Treasury yield, a key benchmark for long-term borrowing, averaged 4.31%, up 7 bps from the previous month. Ongoing blockades in the Strait of Hormuz have kept oil prices above $100 per barrel. This has passed through to inflation which climbed to 3.3%, nearing a two-year high. Energy components led the increase with fuel oil prices rising 30.7% and gasoline up 21.2% in March. At its latest meeting, the Federal Reserve held the federal funds rates unchanged at 3.5% to 3.75% as inflation remains elevated alongside continued economic expansion.