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New home prices hit a five-year low as sales plunge 10.5% in July

Plus: Mortgage demand falls again as rates climb

August 26, 2026

🐪 Midweek already, welcome back. Today's newsletter is a quick 2-minute read.

Disclaimer: Average mortgage rates as of August 25, 2026. © MND Daily Rate Index.

1. Mortgage demand falls again as rates climb

Rates rose to 6.78% last week, their highest level in three weeks, pushing total application volume down 1%. Purchase apps fell 0.3% for the week and are now 5% below year-ago levels, with FHA applications down 7% driving most of the weekly drop.

  • Total volume: down 1% week over week

  • Purchase apps: down 0.3% week over week, down 5% year over year

  • Refi apps: down 2% week over week, down 17% year over year

  • 30-year fixed: 6.78%, highest in three weeks

Rates have since pulled back to start this week on reports of progress in Iran peace talks via Pakistani mediators, sending oil prices and bond yields lower.

2. Goldman Sachs partner warns of ‘huge danger’ in letting AI replace bankers’ reasoning skills

Chris Churchman, who leads Goldman's Marquee digital platform, warned that letting AI handle analytical work risks eroding the thinking skills that Wall Street depends on.

"There's a huge danger that in the era of AI, we outsource our reasoning to these models, and we have cognitive atrophy that stops us being able to reason from first principles ourselves," he said.

The apprenticeship model is at risk. Junior bankers learn by doing — fielding client requests and making decisions under senior supervision. Automating that work removes the training ground. "You learn by doing, and a lot of knowledge is tacit, it was never written down," Churchman said.

For mortgage, the parallel is direct. LOs and underwriters who rely on AI to do their analysis without understanding the underlying reasoning become dependent on tools they can't audit or override when they're wrong.

A MESSAGE FROM MARKETBEAT

Wall Street’s New Shopping List

Big money is rotating into a select group of stocks for the second half of 2026.

MarketBeat’s analysts tracked the move and identified 10 companies attracting fresh capital right now.

The updated 10 Best Stocks to Own in 2026 report lays out the tickers, trends, and catalysts.

3. More Nuggets

💬 The loan officer engineer: The $11,898 problem. (HousingWire)

⚖️ Stable credit scores are hiding a growing affordability crisis. (NMP)

🏘️ Home purchase cancellation hit 3-year high. (RedfinNews)

🔄 Federal agencies reverse Biden-era credit guidance. (American Banker)

📊 About 73% of retiree homeowners are mortgage-free. (Investopedia)

📝 HomeServices of America adds in-house mortgage servicing through its wholly owned lender, Prosperity. (BusinessWire)

4. Unlock to pay $944K in Minnesota HEA settlement

Minnesota AG Keith Ellison went after Unlock's home equity agreements, alleging they were effectively high-cost mortgage loans dressed up as equity products.

The math behind the allegation is striking: when origination fees and equity stakes were treated as finance charges, Unlock was collecting the equivalent of 100% to 140% of the amount advanced upfront and charging up to 22% in annualized interest — despite marketing the product as having no interest and no monthly payments.

Unlock denied wrongdoing and said it settled to avoid litigation. The deal provides $944,626 in combined monetary and debt relief across about 86 agreements originated in the state between 2021 and 2023. Unlock can't reenter Minnesota until it gets licensed and complies with state mortgage laws including rate caps.

5. New home prices hit a five-year low as sales plunge 10.5% in July

Builders are cutting prices and still can't move homes. The median price of a newly built home fell to $393,800 in July — the lowest since 2021 and now below the median existing home price of $434,100, a historical rarity.

Despite the discounts, contract signings dropped 10.5% from June and 6.3% year over year. Builders are responding by pulling back on starts, which fell 9.9% from June and 15.7% year over year.

Inventory is piling up as a result. There are now 488,000 new homes for sale — 9.6 months of supply at the current sales pace, the highest ratio in over a year. Most of the growth is in homes not yet started, meaning builders are selling earlier in the process rather than building speculatively. The regional picture is uneven, dive in.

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

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