The Daily Tearsheet

Stocks are lower this morning as tension continue to brew in the Persian Gulf. The 60 day ceasefire officially expired yesterday and there is the potential for hostilities with Oman. Global bonds are down this morning with the 10 year hitting 4.75%, the 30 year seeing the highest yields since 2007, and UK gilts topping 5%. Even the Japanese Government Bond is pushing 3%, the highest in 30 years.

Meanwhile, oil continues to tick higher and North Sea Brent crude is now trading over $91 a barrel.

Homebuilder sentiment inched up in August according to the NAHB Housing Market Index. That said, sentiment is relatively subdued given the affordability challenges. “While builder sentiment edged higher in August, builders continue to contend with high construction costs and broader economic uncertainty,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. “Rising gas and diesel prices are pushing up material costs, and spec home building remains weak as many prospective buyers stay on the sidelines. However, the Midwest remains a bright spot for the home building industry, with new home sales up in that region more than 2% so far in 2026.”

“Our latest builder survey continues to show signs of weakness in the home building market,” said NAHB Chief Economist Robert Dietz. “August marked the 16th straight month that at least 30% of builders reported cutting prices to support demand, as well as the 16th consecutive month with the HMI below 40. Custom home builders continue to report stronger market conditions than spec builders, reflecting better conditions at the higher end of the market. Smaller, less dense markets are also outperforming larger metropolitan areas, and smaller builders report relatively stronger conditions than larger builders.”

Price cuts did decrease somewhat, with 35% of builders cutting prices versus 37% last month. The typical price cut was unchanged at 6% and 63% of builders reported using incentives.

Speaking of affordability, Redfin reported that the it takes an income of $110,000 to afford the median home. The gap between this number and median income is shrinking however, which is good news.

“The earnings needed to buy a house have stabilized after several years of deterioration, but that doesn’t mean homes are affordable to the average American,” said Redfin Senior Economist Yingqi Xu. “There’s still a double-digit gap between what the typical household earns and what they need to comfortably buy a home, leaving many prospective first-time buyers stalled on the sidelines. But even if the market isn’t becoming much more affordable, it is becoming a bit more manageable for house hunters. It’s a buyer’s market in most of the country, especially places that were once pandemic homebuying hotspots like Nashville and Austin, giving buyers lots of options to choose from and strong negotiating power.”

The hottest markets from the pandemic years are struggling with extended days on market as home sellers wait for prices to return to where they were a few years ago. Meanwhile in the Midwest buyers are bidding up homes as many MSAs simply became too cheap to ignore.

Stocks are higher this morning on no real news. Bonds and MBS are down small.

The week ahead will contain some real estate data, with the NAHB Housing Market Index and housing starts. We will also get the minutes from the July FOMC meeting and leading indicators. We will get earnings from WalMart, the Home Despot and luxury homebuilder Toll Brothers.

Consumer sentiment fell 8% in August according to the University of Michigan Consumer Sentiment Survey. Expected business conditions drove the decline. Older and low income consumers saw the biggest declines in sentiment. Year-ahead inflation expectations ticked up from 4.2% to 4.3%. Long-run expectations held steady at 3.3%.

Chicago Fed President Austan Goolsbee said he hopes improving inflation data can get us back to the Fed’s 2% goal. “If we can get some of this stuff into the rearview mirror then I think we get back on what I was calling the golden path, which is inflation heading back to 2%.” He said that the current 3% level is too high.  “For a couple of months, we’ve been getting a little bit better readings and hopefully that will continue,”

Goldman Chief Economist Jan Hatzius thinks the Fed is unlikely to hike rates at the September meeting. He believes there are at most 4 or 5 members inclined to hike and that number isn’t going to increase further given the economic data. The September Fed Funds futures see only a 30% chance of a hike.

Interesting article in the Wall Street Journal about abandoned homes in Baltimore being the subject of bidding wars. Baltimore is one of the country’s most depressed housing markets, with high crime and limited job opportunities having driven residents away over the past 50 years. The area has been plagues by blocks of vacant homes which became magnets for crime. The cost of renovating these homes is higher than the eventual sale price of the property, which kept them vacant despite a housing shortage. Now this seems to be changing.

Interestingly, Baltimore is one of the places that most correspondent lenders will not lend, at least not DSCR loans for row houses. The area was ground zero for a massive fraud last year and is a no-go zone for most non-QM loan buyers. In addition, a rehabbed home in a neighborhood of vacant properties will be hard to appraise out. You often see massive jumps in appraised values after a rehab and that jump is a red flag for RMBS buyers. It may be justified, but it will get increased scrutiny. Most DSCR investors are happy to just avoid the place.

Stocks are flattish this morning on no real news. Bonds and MBS are flat.

Retail sales fell 0.6% MOM in July according to the Census Bureau. This was up 5% on a YOY basis. Note that Census does not adjust retail sales for inflation, so sales were up modestly on a YOY basis despite the big monthly drop. If you strip out gasoline and vehicles, sales were down 0.2% MOM and 4.4% YOY.

The decline in retail sales and the jobs report will probably take down the Atlanta Fed GDPNow estimate from its torrid 5.8% pace to something more realistic.

Richmond Fed President Tom Barkin talked a little bit about the vibecession, where many feel like the economy is lousy despite good headline numbers. On the labor market, he said: “How can unemployment be so low when the news feels so bad? In addition to the continuing low-hire, low-fire environment, the low unemployment rate is also a result of a different, delicate balance: slowing labor demand growth has been accompanied by slowing labor supply growth.”

Consumer spending remains robust, and business investment is strong, even after data center spend. Many businesses sat on the sidelines in 2025, waiting for the uncertainty regarding tariffs etc to dissipate. While that uncertainty is still there, they are to the point where they cannot afford to wait any longer.

“Today, you could argue the fog still hasn’t lifted. Tariff rates are still uncertain. The conflict in the Middle East continues. Borrowing rates are up. And yet, in the first half of 2026, real private nonresidential fixed investment grew at an annualized rate of 9.5 percent. For comparison, the average growth rate in the much more stable decade prior to the pandemic was 5.8 percent…It’s not only data centers, however. I am starting to hear investment momentum elsewhere, too. Bank pipelines are healthy. Mergers and acquisitions are active. Leases are being signed. Factories are being built. The defense sector is booming. Many business leaders explain they’ve concluded high uncertainty is the new baseline. They can’t afford to wait any longer.”

Mortgage delinquencies decreased to 4.37% in the second quarter according to the MBA. This was down 7 bp from Q1, but up 44 from the same quarter a year ago. The number of loans in the foreclosure process rose 3 basis point to 0.67%. “Mortgage delinquencies decreased slightly across all loan types in the second quarter of 2026. Nonetheless, the broader trend is that both delinquencies and foreclosures have increased over the past year,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The mortgage delinquency rate rose 44 basis points and the foreclosure inventory rate increased by almost 20 basis points from last year’s second quarter.”

Added Walsh, “Some loans are continuing to move to later stages of delinquency. The seriously delinquent rate – the non-seasonally adjusted percentage of loans that are 90 days or more past due or in the process of foreclosure – increased for the fourth consecutive quarter. Furthermore, FHA serious delinquencies are becoming pronounced, increasing more than 225 basis points from the previous year.”

Note the Wall Street Journal had an editorial about United Wholesale’s FHA delinquency rate, which made an astonishing claim that 21.5% of UWM’s FHA production went seriously delinquent within two years of origination. That is astounding.

The ICE Mortgage Monitor reported that delinquencies rose 5 basis points in June to 3.55%. Foreclosure starts were up 29% MOM and 44% YOY. Foreclosure activity hit a 6 year high, although it is rebounding from being artificially suppressed during the COVID years.

Increased DQ rates are being driven by FHA loans:

Stocks are higher this morning on no real news. Bonds and MBS are down small.

Inflation at the wholesale level was flat month-over-month and rose 4.7% YOY according to the Producer Price Index. The headline number was a little better than expectations. Ex-food and energy the PPI rose 0.2% MOM and 4.2% YOY.

Oil prices are moving lower after the International Energy Agency forecasted falling demand going forward. Saudi Arabia has also shifted delivery to Mediterranean pipelines to avoid Yemeni fire in the Red Sea. The longer oil stays elevated, the more supply will come on line. The cure for high prices is high prices.

UWM is suing Two Harbors over the failed bidding war alleging that Two Harbors undermined their deal. Two Harbors has responded by calling the lawsuit frivolous. The Two Harbors Board of Directors has a fiduciary duty to their shareholders to get the best price, and ultimately shareholders decided cash was preferable. Given the performance of UWM stock, that was the correct choice. Ultimately it was not Two Harbor’s fault that UWM hedged their MSR portfolio (when it doesn’t hedge its own) and lost money on the trade.

Mortgage lock volume declined 11% MOM but remained 5% above last year, according to Optimal Blue. “Mortgage rates moved higher across all major products in July,” the report noted. The Optimal Blue Mortgage Market Indices (OBMMI) 30-year conforming fixed rate rose 26 basis points MoM to 6.72%, essentially unchanged from a year ago. The 10-year Treasury yield climbed 31 basis points to 4.75%, while the spread between the 10-year Treasury and the OBMMI 30-year conforming rate narrowed 5 basis points to 197 basis points.

“July was a clear reminder of how sensitive this market remains to rate movement,” noted Mike Vough, senior vice president of corporate strategy at Optimal Blue. “A 26-basis-point rate increase was enough to pull both purchase and refinance volume meaningfully below June’s pace.”

Interesting note for mortgage servicers: the OCC issued a rule in May that allows OCC-regulated banks to not pay interest on mortgage escrow accounts even if the customer lives in a state that requires them. This was a big issue during the days of 0% interest rates when servicers were statutorily required to pay a minimum escrow interest rate even though the underlying account was paying nothing.

At the margin, this should help MSR valuations by reducing the cost of servicing.

Stocks are higher this morning as earnings continue to come in. Bonds and MBS are up.

Inflation at the consumer level rose 0.1% MOM and 3.4% YOY according to the Bureau of Labor Statistics. Ex-food and energy, the index rose 0.2% MOM and 2.5% YOY. These numbers were in line with expectations. Shelter rose 0.1% in July and accounted for about 2/3 of the increase in CPI. Shelter inflation was 3.2% on a YOY basis.

Energy was the big driver of the YOY increase in headline inflation, with gasoline prices up 25% YOY. Food was up 0.1% MOM and 3.0% YOY.

Existing home sales fell 1.7% last month to a seasonally adjusted annual rate of 4.06 million units. Sales were up 0.7% YOY. “Home sales have been remarkably stable, even amid the rising mortgage rate environment of the past few months,” said NAR Chief Economist Lawrence Yun. “Year-to-date sales are up 2.4% and there’s no doubt that the housing market would be thriving if average mortgage rates were to return near 6%.”

“Though the national data shows stabilization, there are notable local market variations,” Yun said. “In smaller cities, and particularly in the Midwest, an annual household income of $60,000 would be sufficient to buy a median-priced home.”

The median home price rose 2% to $434,100, while inventory fell to a 4.5 month supply.

Mortgage applications increased 3.6% last week as purchases rose 3% and refis rose 5%. “After five consecutive weeks of increases, mortgage rates declined slightly last week as oil prices dipped briefly on the hopes of a sustained resolution to the war in Iran. The 30-year fixed rate decreased four basis points but remained close to its highest level in a year at 6.77% ,” said Joel Kan, CMB, MBA’s Vice President and Deputy Chief Economist. “The reprieve in rates supported an increase in both purchase and refinance applications over the week, although the pace of applications has fallen below last year’s pace in recent weeks. As refinance incentives have dwindled with rates at current levels, the average loan size for refinance applications was down to its lowest level since July 2025.”

Stocks are higher this morning on no real news. Bonds and MBS are down.

Oil prices are working their way higher as optimism for a deal in the Strait of Hormuz fades. Markets are “confident that we can get to some sort of agreement, even if it may be a fudge,” Modupe Adegbembo, an economist at Jefferies, told CNBC’s “Squawk Box Europe” on Monday. “It may not be a great agreement, but it may be something that allows more oil and more things to flow through the Strait of Hormuz.”

If no deal materializes, we could see oil prices push higher, however the longer prices stay elevated the more marginal supply comes to market, especially in North America.

Small business optimism improved in July, according to the NFIB. The index rose above its highest level in a year. Hiring drove most of the increase, and eight of the ten components rose. Uncertainty rose, and expected sales fell. We got some good news on the inflation front – the net number of firms raising prices fell for the first time in four months. Labor quality / availability was listed as the number one problem, while fewer firms cited inflation.

Main Street has become a bit more optimistic about future economic
developments. The NFIB Small Business Optimism Index improved
significantly, managing to exceed the 52-year average. The gain was driven by a substantial improvement in hiring plans, accompanied by an improvement in plans to make capital expenditures. Capital investments have been driving economic growth, primarily AI investments in chips and structures to house them in. Although this is not primarily a small-firm activity, it looks like spillover business opportunities are reaching them.

The stock market has been rewarding shareholders very well, and this is supporting a lot of spending by the wealthier consumers who hold equity. Restaurants, car dealers, home improvement companies, etc., all benefit from the wealth being created in the tock markets. Enjoy it while it lasts. The unemployment rate is staying low, and the inflation rate is bothersome, driven primarily by oil prices. A favorable resolution of the war with Iran will significantly reduce oil prices when it finally happens. The world has plenty of oil.

There was a significant decline in the full suite of inflation metrics, led by the percentage of owners raising their average selling prices. This is an especially good sign since it occurred while consumer spending stayed solid and compensation was still rising. The Fed has turned its attention to managing the inflation rate, which is well above the 2% target. Interest rates respond to expected inflation using current experience as a guide. The Fed has indicated that it will pay close attention to developments. Uncertainty remains high, most likely due to the status of the war with Iran. A meaningful resolution will be a major plus for the economy and small business owners.

The part about the wealthy spending is interesting and it highlights the K-shaped economy, where the top end of the income distribution is doing fine, but the lower end is not. This phenomenon is driving some of the Democratic Party’s flirtation with socialism and this will not be a positive for small business, especially small businesses in deep blue cities like Seattle and New York City. I would expect to see the uncertainty index rise, driven by political risk as much as oil prices. This will be something to watch.

Still it looks like business optimism is on the upswing, so this is some to watch

Cleveland Fed President Beth Hammack doesn’t think a quarter point increase in the Fed Funds rate will do much damage to the economy. “I don’t know exactly where we’ll end…in general one 25-basis point move probably doesn’t do a whole lot for the economy,” Hammack said Monday in an interview with Yahoo Finance. “It’s probably…some number of movement, but I don’t want to prejudge what that number is going to be.”

“When I’m talking to businesses, I’m not hearing that they’re sensing any restraint from investments in growth based on where interest rates are,” Hammack said. “So to me that says that now is the time to act.”

Mortgage credit availability increased in July, according to the MBA. “Credit availability in June increased to its highest level since July 2022, as greater availability and expanded guidelines for ARM and streamline refinance loans, including some with lower documentation requirements, drove most of the increase,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Jumbo credit availability has grown in almost every month this year and this month’s increase brought the jumbo index to its highest level since 2020. Additionally, non-QM loan programs continue to account for a substantial share of this growth.”

If the government wants to privatize the GSEs, it might want to pay attention to how much volume is going to non-QM. Fan and Fred market share will continue to erode.

Stocks are flattish this morning on no real news. Bonds and MBS are down small.

The week ahead will be dominated by the CPI on Wednesday and the PPI on Thursday. We will also get retail sales and existing home sales. Tom Barkin and Beth Hammack will also speak on Thursday. Earnings season is on the back nine, and most of the financials have already reported.

Richmond Fed President Tom Barkin said that the US economy may be entering a period of greater instability. “We may be moving into a world of greater instability,” Barkin said, according to prepared remarks. “Persistent shocks—whether from geopolitics, inflation, debt, cyber threats, or the AI transition—can challenge the economy’s resilience and complicate monetary policy.”

He remains concerned about inflation: “If inflation remains sticky and job growth stays strong, that could shift the risk outlook,” he noted, suggesting that the central bank might need to hold rates higher for longer or even consider hikes if shocks compound price pressures. We’re in a good place to respond to ongoing shocks,” Barkin said, “but we need to see how these forces play out.”

After the disappointing jobs report, the Fed Funds futures are now leaning towards no change in policy at the September meeting, however it is a close call: 55% versus 45%.

The Atlanta Fed GDP Now model sees the economy growing at a torrid 5.8% in pace in Q3. This number does not include Friday’s jobs report, so we will see how much that changes in the new model run coming out on Thursday.

The US housing market has settled into a slower pace this summer, giving buyers a bit more leverage. “Late summer—especially this one when the housing market favors buyers in most places—offers the chance for people who are motivated to move this year to negotiate,” Chen Zhao, Redfin’s Head of Economics Research, said. “Buyers should use this time to explore the market more seriously, while sellers should consider what they’re willing to sacrifice to make a deal happen.” 

Sales of starter homes (costing around $200k according to Zillow) fell 5.4% in May. Zillow estimates a starter home price is around 202k, which is up 2.3% YOY. That said, they aren’t flying off the shelves as buyers remain hesitant. Meanwhile, luxury sales rose.

Stocks are higher this morning on no real news. Bonds and MBS are up small.

The economy lost 23,000 jobs in July, according to the Employment Situation Report. The unemployment rate fell to 4.1%. The unemployment rate was driven by a 264k decrease in the labor force and a 178k decrease in the number of unemployed. The labor force participation rate fell 0.1% to 61.4% and the employment-population ratio fell 0.1% to 58.9%.

Healthcare and social assistance added the most jobs, while payrolls fell in government and leisure / hospitality.

This report will certainly challenge the Fed’s narrative that the employment side of the dual mandate is under control. That said, they are mainly concerned with managing the unemployment number, which did fall.

Average hourly earnings rose 0.1% MOM and 3.2% YOY. Bonds are reacting positively on the report. The September Fed Funds futures now see a 45% chance of a rate hike, down from 55% yesterday.

Rocket reported second quarter earnings of $0.08 per share compared to a loss of a penny a share a year ago. Volume was $49.1 billion, while gain on sale was 2.48%. The stock is down about a percent pre-open, which is much better than crosstown rival United Wholesale, which got taken to the woodshed for 35% yesterday.

Nonfarm productivity increased 1.4% in the second quarter as output increased 1.7% and hours worked rose 0.3%. Unit Labor costs rose 1.3%, reflecting a 2.7% increase in compensation and the 1.4% increase in productivity. The productivity number was better than expectations.

Stocks are higher this morning as investors anticipate a re-opening of the Strait of Hormuz. Bonds and MBS are up.

The US and Iran signaled that a deal was imminent to allow ships to transit the Strait of Hormuz without tolls. Iran apparently wants shipping routes changed for security reasons, but an agreement with Iran and Oman appears to be in the final stages. Iran said it is “ready to return to commitments” apparently referring to the temporary agreement reached with the US in mid-June.

United Wholesale reported originations of $39.7 billion in the second quarter, a 11.6% decrease compared to a year ago. Purchase activity increased to $23.8 billion while refis fell. Despite the lower YOY volume, gain on sale margins rose to 133 basis points compared to 123 a year ago. Earnings fell, due to a hedging charge related to the Two Harbors bidding war.

UWM also announced a $2.05 billion equity raise from Oaktree Capital Management and SFS Group Capital.

Mat Ishbia, Chairman, Chief Executive Officer and President of UWMC, said, “The second quarter was another quarter where we demonstrated the scale of our origination engine and industry leadership, as well as our continued commitment to serving the broker channel. I am also excited to announce our partnership with Oaktree. We’re taking decisive action to make UWM stronger, more liquid and better positioned to win for years to come. This is not just about capital. This is about bringing in a strategic partner that understands our business, understands MSRs, understands the mortgage industry and believes in the same long-term vision we have for UWM.”

UWMC has suspended its dividend. Previously the company had been paying a $0.10 quarterly dividend which implied a 20% dividend yield. The suspension versus a cut has spooked the Street, and the stock is down some 25% pre-open.

If there is one investing lesson out there as important as “buy low / sell high” it is Mortgage Banking Stocks Will Break Your Heart.

The ISM Services Index improved in July, driven by a 3.7 percentage point increase in the Business Activities Index. New Orders improved, however employment returned to contraction territory. The Prices Index also increased, which means firms are raising prices and seeing input inflation. Rising energy costs were the big driver here.

“Tariff impacts and the Middle East conflict continued to be mentioned by respondents, but much less frequently than in prior reports. The World Cup was again cited in the comments regarding increased business activity and new orders. Overall, the U.S. services economy continues to be resilient. Concerns still exist regarding mortgage and inflation rates, and we are still in the midst of pricing impacts due to the recent run-up in petroleum costs.”

Home price appreciation continued in July, according to the Clear Capital Home Data Index. Prices rose 2.1% on a quarterly basis and 1.9% annually. The hip-to-be-square trade continues, with Midwestern MSAs occupying a lot of the top spots (though Rochester NY continues to lead the pack), while Western MSAs dominate the lowest performers.

In the commentary, I talk about the homebuilders and why we new construction remains difficult despite strong demand from buyers. Sticks and bricks (i.e. building materials) aren’t the issue as much as land prices. Skilled labor remains in short supply.

Check out the Clear Capital blog for all sorts of good info.

Fed Governor Lisa Cook said she is “prepared to act” on a rate hike to address rising inflation. “Inflation is too high, and I consider the risks to the inflation side of the dual mandate higher than the risks to the employment side at this point,” Cook said during a speech in Anchorage, Alaska. “As such, I am prepared to act by raising rates, if necessary.”

Note she voted with the majority to maintain rates at the July meeting, so she would be an additional vote for a rate hike in September if things don’t change for the better.

“If I do not see signs of continued disinflation soon, I am prepared to act,” Cook said. “With five years of above-target inflation, the risk grows that higher inflation may become entrenched in price- and wage-setting behavior, leading to persistence that would be much harder for us to attack. The longer inflation is above target, the more likely this scenario becomes.”

The September Fed Funds futures see a 57% chance for a 25 basis point hike.

Stocks are higher this morning as oil and bond yields work their way lower. Bonds and MBS are up.

The private sector added 44.000 jobs in July, according to the ADP Employment Report. “Job-changers are highly sensitive to real-time economic conditions, and their rapid pay growth implies supply constraints in parts of the labor market. Typical hiring patterns, meanwhile, are changing as employers react to shifting macro-economic conditions.” FWIW, the Street is looking for 90,000 private payrolls in Friday’s jobs report.

Job stayers saw a 4.4% increase in pay while job switchers saw a bump of 7%.

Job openings slipped to 7.4 million from 7.5 million the month before. On a YOY they increased from 7.2 million. Trade / Transportation / Utilities and the financial sector saw the biggest increases. The quits rate, which tends to predict wage increases, was flat at 2.2%.

Minneapolis Fed President Neel Kashkari said “now is the time to start moving rates up.” “Corporate earnings are through the roof. They’re doing great. The consumer is hanging in there. The labor market is hanging in there. I look at this constellation and I say, what evidence do I have that monetary policy is particularly restrictive right now?” he told CNBS’s Andrew Ross Sorkin in a live interview from the Aspen Ideas Festival in Colorado.

“So, I argued now is the time to start slowly moving up as we get more data in,” he said. “I’m not calling for a dramatic increase in interest rates,” he said. “I’m simply saying I don’t see evidence of monetary policy is marginally restrictive right now, and I think we have more work to do to get inflation back down. And I would rather get going now in small steps than wait till later, then we have a really entrenched inflation problem and have to raise rates aggressively then.”

Non-QM continues to grow as lenders are finding investor demand insatiable for non-QM paper . For evolving originators/lenders, are you ready to move from non-delegated to delegated / bulk delivery?
If you’re prepared to take the next step , hedge your production with Eris SOFR Swap futures (“Eris SOFR”). Eris SOFR is being used to hedge non-QM pipelines so that mortgage companies can accumulate loans
while reducing interest rate risk and selling bulk for greater pay-ups.

Eris SOFR is the most efficient, cost-effective, and liquid way to hedge non-QM loans. Trading volume in June topped $100bn for the month, averaging around
50,000 contracts ($5bn) per day. July 8th featured an Eris SOFR “Royal Flush,” with trades recorded in every actively-quoted tenor on the swap curve from 1-year to 30-years. 

CME Group launched Eris Options – Options on Eris SOFR Swap futures – for CFO’s and Capital Markets teams that want to address volatile pull-through expectations. 

Mortgage applications fell 2.9% last week as purchases fell 4% and refis dropped 2%. “In the wake of the July FOMC meeting, longer-term rates increased, with mortgage rates reaching their highest level in more than a year, with the 30-year fixed mortgage rate rising to 6.81 percent,” said Mike Fratantoni, MBA senior vice president and chief economist. “Application volume for both refinance and purchase loans declined for the week, and are now running behind last year’s pace, indicating that higher mortgage rates have weakened overall demand.”

Homebuilder LGI Homes reported second quarter earnings of $1.16 per share, a decrease of 15%. Revenues rose 5.6%, while gross margins decreased from 23% to 20%.