What’s Happening Today

Markets are starting the day with stocks higher and mortgage rates under slight upward pressure as recent economic data shows mixed signals in housing and consumer demand. Housing activity improved month over month, but remains weaker year over year, while mortgage application activity shows refinance demand rising strongly due to lower rates compared to last year. Durable goods data suggests steady economic momentum, and investors are watching upcoming inflation and housing reports later this week that could influence mortgage rate direction.

Housing Starts & Permits

Housing permits rose 4.3% MoM in December to a 1.448M annualized pace but remain down 2.2% YoY.
Housing starts increased 6.2% MoM to a 1.4M annualized rate but are down 7.3% YoY.
Housing completions rose 2.3% MoM to 1.525M but are still down 0.1% YoY.

Slower year over year trends suggest supply growth remains constrained, which could lead to increased demand and home prices moving forward.

Mortgage Applications Show Rate Sensitivity

Mortgage rates were near 6.125%, about 0.75% lower than a year ago (Mortgage Bankers Association).
Purchase applications fell 3% week over week but remain 8% higher YoY.
Refinance applications jumped 7% and are up 132% YoY, making up 57% of total loan volume.

Lower rates compared to last year are driving a strong refinance rebound while purchase demand remains steady but cautious.

Durable Goods Signal Economic Strength

Durable goods orders fell 1.4% MoM, better than the expected 2% decline.
Core durable goods rose 0.6%, beating the 0.4% forecast.
Core shipments, which feed into GDP, surged 0.9%, triple expectations.

Stronger core business spending suggests continued economic resilience, which can influence the path of interest rates.

What to Watch This Week

Jobless claims and pending home sales data are due tomorrow.
Friday brings the Fed’s preferred inflation measure (PCE), Q4 GDP, and new home sales.
Markets expect inflation readings to remain relatively steady, which could limit major rate moves unless surprises occur.

Upcoming inflation and housing data will likely be the biggest drivers of mortgage rate direction this week.

Final Takeaway

Housing data shows signs of improvement but still reflects slower annual growth, while strong refinance demand highlights how sensitive borrowers are to rate changes. Economic data continues to show resilience, and upcoming inflation reports will play a key role in determining whether mortgage rates move higher, lower, or remain range-bound. For homebuyers and homeowners, this environment creates opportunities to monitor rate trends closely and act when favorable pricing appears.

If you want to understand how today’s market impacts your buying power, refinancing options, or homeownership plans, reach out to see what opportunities may be available or to get pre-approved today.