Existing homes are more expensive than new homes

👋 Good morning, Wednesday. Today’s newsletter is 749 words, a 2.5-minute read.

1. Mortgage applications rebound as interest rates edge down

Mortgage applications increased 3.1 percent from one week earlier, according to data from the MBA Weekly Survey for the week ending August 1, 2025.

• The Refinance Index increased 5 percent from the previous week and was 18 percent higher than the same week one year ago.

• The seasonally adjusted Purchase Index increased 2 percent from the previous week and was 18 percent higher than the same week one year ago.

“Mortgage rates moved lower last week, following declining Treasury yields as economic data releases signaled a weakening U.S. economy. As a result, the 30-year fixed rate decreased for the third straight week to 6.77 percent,” said Joel Kan, MBA Chief Economist.

Borrowers sought to take advantage of these lower rates, as both purchase and refinance applications increased over the week.

2. CHLA proposes 1031-like tax break to help first-time homebuyers

The Community Home Lenders of America (CHLA) proposed a new tax policy modeled after the 1031 exchange to help first-time homebuyers.

The plan would allow individuals to exclude up to $50,000 in capital gains taxes from the sale of stocks, bonds, mutual funds, publicly traded REITs, or a personal residence — if the proceeds are gifted to a child or grandchild and used within six months as a down payment on a first home.

• The proposal aims to unlock dormant investment wealth to assist younger generations in entering the housing market.

The recipient must meet first-time homebuyer criteria and the property must be within FHA loan limits. Gains excluded would reduce the home's cost basis, deferring taxes similarly to commercial 1031 exchanges.

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3. More Nuggets

📉 At 6.57%, mortgage rates hit a 2025 low: Here’s how to talk to buyers about It. (BAM)

📝 Trump narrows Fed chair candidates to four, excluding Treasury’s Bessent. (The Hill)

🔬 How specializing can unlock stronger branding, better referrals, and sustainable growth. (NMP)

💸 Finance of America posts profit, buys out Blackstone stake. (MSN)

🆕 Homebuyer confusion may be driving cancelled mortgage applications. (HousingWire)

4. Gormley and Cassidy nominated to lead Ginnie Mae and FHA

The Trump Administration has nominated Joseph M. Gormley as President of Ginnie Mae and Frank Cassidy as Commissioner of the Federal Housing Administration (FHA). Both have been serving in acting leadership roles since April 2025.

Gormley, currently Executive VP and COO of Ginnie Mae, brings experience from prior roles at HUD and in the mortgage industry. If confirmed, he would become Ginnie Mae’s first permanent president since May 2024.

Cassidy, serving as HUD’s Principal Deputy Assistant Secretary, has a background in real estate finance at firms including Walker & Dunlop and Newmark. He would lead FHA’s mission to support affordable housing through insured lending programs.

5. Existing homes are more expensive than new homes

According to the National Association of Home Builders, existing single-family homes are now more expensive than new ones. The median price of a new home fell to $410,800 in Q2, while the median price of an existing home rose to $429,400, driven by tight resale inventory and a steady flow of new construction.

New home prices declined for the ninth consecutive quarter, down 0.9% year-over-year, while existing home prices posted an eighth straight gain, rising 1.7%.

The trend is most evident in the West, where existing homes command a $105,000 premium over new ones, largely due to land scarcity and desirable locations. In the South, prices are nearly identical, around $375,000. The Northeast and Midwest still see new homes priced above existing ones.

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

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