AI money is helping drive a boom in luxury homes

‼️ Welcome back. Today's edition is 593 words, a 2-minute read. Let’s get started…

1. Mortgage refinance demand drops 18%

The 30-year fixed rate climbed to 6.65% last week — up 30 basis points over the past five weeks and the highest since August 2025.

• Total application volume dropped 8.5%, with refi apps down 18% and the refi share falling to 38%, the lowest since June 2025. VA refinances took the hardest hit, down 34% for the week.

Purchase apps were nearly flat, down just 0.4%, but the average purchase loan size hit another survey high at $473,600 — a sign that smaller-balance borrowers are being priced out. Year-over-year purchase demand is now just 5% above last year's levels.

2. AI money is helping drive a boom in luxury homes

The median U.S. luxury home sale price rose 3.6% to $1.39 million in the three months ending April 30 — double the 1.4% gain for non-luxury homes.

San Francisco led all markets with a 48% year-over-year jump in pending luxury sales, the largest since June 2021, with a median luxury sale price of $6.7 million. Real estate agents are calling it "AI money" — stock compensation, rising valuations, and fat sign-on bonuses flowing to tech workers.

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3. More Nuggets

🎖️ Nearly 1 in 5 homebuyers in 2025 had military ties, NAR says. (NAR)

💼 Single Gen Z women are destroying their male counterparts when it comes to buying their first house. (Fortune)

🏡 Home price growth slowed in March. (Cotality)

🧑‍⚖️ Judge orders MRED to restore Zillow listing feed In antitrust fight. (OM)

🆕 Radian names ex-Mr. Cooper president as next CEO. (NMN)

4. Tri-merge isn’t dead after all

FHA announced it will continue requiring tri-merge credit reports as it transitions from FICO Classic to VantageScore 4.0 and FICO 10T — separating the scoring model question from the report structure question.

The agency said the tri-merge requirement supports "prudent risk management" and ensures consistent borrower evaluation across all acceptable models. Implementation dates and further guidance are expected later this year.

The decision settles a live industry debate. The MBA has pushed for single-file credit reports in limited cases to reduce costs, but CHLA and the Consumer Data Industry Association both backed the FHA's call, arguing that less data introduces systemic risk and creates incentives to game the system.

5. Consumer confidence slips for first time in months

Consumer confidence in May saw its first drop after three months of gains as Americans grapple with rising prices and inflation, both driven up by the U.S.-Israeli conflict in Iran, the monthly consumer confidence index report said Tuesday.

Confidence dipped 0.7 points to 93.1 in May, a low not seen since 2025, according to the index, which is calculated by The Conference Board, a New York-based think tank.

Consumer confidence was typically high before the pandemic, at around 130, but has remained low since the COVID-19 pandemic in 2020.

☀️ You’re all caught up. See you on Friday!

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