Mortgage Rates
The 30-year fixed mortgage rate edged down to 6.47% this week, according to Freddie Mac's Primary Mortgage Market Survey — a slight decline from 6.54% last week. The 15-year fixed fell to 5.72%.
| Rate Type | This Week | Last Week | Year Ago | Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.47% | 6.54% | 6.88% | -0.07 |
| 15-Year Fixed | 5.72% | 5.80% | 6.22% | -0.08 |
| 5/1 ARM | 6.10% | 6.15% | 6.45% | -0.05 |
Our take: Rates remain well above the 3-4% range that fueled the 2020-2022 price surge, but the slow downward drift reflects modest easing expectations. The Fed has held the federal funds rate at 4.25-4.50% since January, and futures markets are pricing one to two cuts by year-end. Even if rates reach 6%, the affordability math remains brutal for first-time buyers.
Home Prices
National median existing home price rose to $415,200 in the latest NAR data, up 3.8% year-over-year. Price growth continues to moderate from the double-digit pace of 2021-2022 but remains above income growth.
| Metric | Current | Month Ago | Year Ago | Trend |
|---|---|---|---|---|
| Median Existing Home Price | $415,200 | $410,300 | $399,800 | +3.8% YoY |
| Median New Home Price | $438,900 | $435,100 | $425,600 | +3.1% YoY |
| Case-Shiller National Index | 322.4 | 320.1 | 309.8 | +4.1% YoY |
Our take: Home prices continue to rise faster than wages (~4% vs. ~3.2%), gradually worsening affordability. The price-to-income ratio nationally sits at 5.3x, well above the historical norm of 3-4x. Until we address the supply constraints that prevent new housing from being built, prices will continue to outpace incomes. No amount of demand-side subsidies will fix a supply problem.
Housing Inventory & Sales
| Metric | Current | Month Ago | Year Ago | Trend |
|---|---|---|---|---|
| Existing Home Sales (SAAR) | 4.12M | 4.08M | 3.96M | +4.0% YoY |
| Active Listings | 1.18M | 1.12M | 1.04M | +13.5% YoY |
| Months of Supply | 3.4 | 3.3 | 3.1 | +0.3 |
| Median Days on Market | 42 | 45 | 38 | +4 days |
| Housing Starts (SAAR) | 1.41M | 1.38M | 1.33M | +6.0% YoY |
| Building Permits (SAAR) | 1.48M | 1.45M | 1.42M | +4.2% YoY |
Our take: Inventory is the most encouraging trend in the market right now — up 13.5% year-over-year. But at 3.4 months of supply, we're still well below the 5-6 months that represents a balanced market. The mortgage rate "lock-in effect" continues to suppress turnover, as roughly 60% of homeowners hold sub-4% mortgages and have no financial incentive to sell. New construction is helping, but regulatory bottlenecks keep building well below the pace needed to close the 3.8 million-unit deficit.
Economic Indicators
| Indicator | Latest | Previous | Trend |
|---|---|---|---|
| Federal Funds Rate | 4.25-4.50% | 4.25-4.50% | — Unchanged |
| CPI (YoY) | 2.8% | 3.0% | Cooling |
| Unemployment Rate | 4.1% | 4.0% | +0.1 |
| 10-Year Treasury Yield | 4.22% | 4.30% | -8 bps |
| Consumer Confidence | 104.2 | 106.1 | -1.9 |
Our take: CPI continues its slow retreat, which supports the case for rate cuts later in 2026. But the Fed faces a tension: cutting rates would improve mortgage affordability in the short term while potentially reigniting the very asset price inflation that made housing unaffordable in the first place. The free-market prescription? Stop trying to manage the economy through rate manipulation and let prices reflect genuine supply and demand.
Policy Watch
Senate Housing Committee advanced the "Homes for All Act," which proposes $50 billion in new federal spending on affordable housing construction subsidies and expanded Section 8 vouchers. The bill has bipartisan cosponsors but faces opposition from fiscal conservatives.
Our take: More demand-side subsidies for a supply-side problem. As we've documented in our policy analysis, federal housing subsidies have a consistent track record of inflating prices rather than improving affordability. The $50 billion would be better spent removing the regulatory barriers that add $93,000 to every new home — which would cost taxpayers nothing.
California Governor signed an executive order streamlining CEQA review for housing projects in transit-rich areas. It's a step in the right direction — but limited in scope and likely to face legal challenges.
Bottom Line
The housing market in late February 2026 is marginally improving on the margins — rates down slightly, inventory up slightly, new construction ticking higher. But the structural problems remain firmly in place: monetary policy distortion, supply-restricting zoning, and demand-inflating government subsidies. Until policymakers address root causes instead of symptoms, the affordability crisis will persist.
Data sources: Freddie Mac PMMS, NAR Existing Home Sales, Census Bureau New Residential Construction, S&P CoreLogic Case-Shiller, BLS, Federal Reserve.