Insights 
The U.S. housing market shows mixed signals with new-home sales improving. In March, new-home sales rose to a seasonally-adjusted annual rate of 724,000 units, a 7.4% increase from February and 6% above last year’s figures. Builders are offering incentives, seen in the 7.5% drop in the median price of new homes to $403,600, while inventory increased to 503,000 units, indicating an 8.3-month supply.
Conversely, the existing-home market remains sluggish. March saw a 5.9% drop in resale transactions, reaching an annual pace of 4.02 million, which is 2.4% lower than last year. High borrowing costs and limited listings contribute to this decline, though tight supply is keeping prices firm. Consequently, the median existing-home price rose to $403,700, 2.7% higher year-on-year and a new record for March.
Financial Conditions Consistency
Financial conditions show some consistency but remain historically high. The latest Freddie Mac survey reports a 30-year fixed mortgage rate of 6.81% for the week ending 15 May, a slight rise from 6.76% the week before. Mortgage rates have stayed between 6.7% and 6.9% for nearly four months, 30 basis points lower than a year ago. This range has restricted refinancing but has increased purchase-application volume by about 18% compared to last year’s low levels.
What we’re seeing here is a tale of two markets within U.S. real estate — one trying to regain its footing through builder-led incentives, the other dragging its heels under the weight of tightening financial restraints. On the one hand, the fresh-home segment is showing clear intent. A sharp rise in sales volumes for March, outpacing both the prior month and the same time last year, offers a measure of momentum. That this is paired with a substantial drop in the typical price of these homes tells us that builders are very aware of buyer hesitation and are adjusting aggressively to address it.
It’s also essential to notice that supply has ticked upwards. An 8.3-month pipeline tells us homes are being completed and listed, not just planned. If that figure had dropped, it might suggest demand heating up more quickly than construction can match. As it stands, sellers are trying to entice cautious buyers, not chase them off.
Contrast that with existing homes, which are not moving nearly as briskly. These owners are holding firm, unwilling or unable to list in an environment where they’d need to trade low mortgage rates for higher ones. The result is tight supply paired with surprising firmness in prices. That’s reflected in a new record high for March, despite fewer total transactions. It’s a classic mismatch: would-be buyers exist, but inventory is trapped.
Impact On Credit Markets
That kind of push-pull dynamic naturally filters into credit markets. We haven’t escaped elevated borrowing costs, though there’s been some stability of late. For nearly four months, mortgage rates have hovered within a narrow band — stubborn, but not rising. That range appears to be just low enough to spark demand from younger borrowers or those previously priced out, though not enough to spur broader refinancing activity.
Here’s what we should focus on: markets are pricing in resilience, not exuberance. There’s no rush to chase yield disproportionately, but no collapse to short indiscriminately either. Builders seem to be managing through the higher-rate environment better than secondary sellers, simply because they can be more flexible on price and perks.
Fixed-income futures are digesting these data points steadily — there’s a method to this drift. Volatility play remains sensitive to rate deviation more than volume upside. Positioning should continue to reflect this: staying light where momentum is soft and balancing corrections off tightening headlines. Supply measures, once overlooked, bear watching now, as any tightening could swing rates expectations swiftly. An upward move in inventory or further builder concessions could lean into duration touches more than net-risk-on sentiment.
Watching the gap between purchasing volume and refinancing remains instructive. If that spread narrows — whether through rate movement or lending standard shifts — we may see feeds into consumer creditworthiness measures, which could percolate through swap valuations nearly as quickly as any CPI read. Stay responsive, especially in the front end. The shape of the curve still signals caution rather than expansion. Let’s treat that not as noise, but as guidance.
