Mortgage demand hits highest level in 3 years

Our announcement

As you may have heard, after 13 incredible years together and so many milestones achieved, we’re moving into the next chapter of our professional lives. While our paths are evolving, our friendship remains as strong as ever. 

We want you to know that our commitment to you and this newsletter is unchanged. You can expect that every Tuesday and Friday, we will continue to share our very best views, insights, and tips on the biggest trends shaping real estate. 

We’re deeply grateful for your trust and support over the years, which has made the success of The Blueprint not only possible, but beyond our wildest expectations! We believe the best is still only yet to come.

With that, let’s jump into today’s edition!

- James and David

Mortgage demand jumps to highest level in three years

Mortgage demand surged last week as falling rates pulled buyers and refinancers back into the market. Total applications hit their highest level in three years, according to the Mortgage Bankers Association. Here are the key details reported by CNBC:

• Purchase applications rose 7% week-over-week and are 23% higher than the same week last year.

• Refinance activity jumped 12% week-over-week and is now 34% above last year’s pace.

• The average 30-year fixed fell 6.64% to 6.49% from. While still 20 basis points higher than a year ago, it’s well below levels seen earlier in 2024 and during the spring buying season.

• The CPI rose 0.4% in August — the biggest monthly gain since January — putting annual inflation at 2.9%. Core CPI increased 3.1% year-over-year.

Our take

The Fed has plenty to consider at its meeting next week–this latest CPI release, a weak jobs report, and major labor market revisions. While some analysts expect a series of cuts at the remaining meetings this year, we’re more cautious. A 25-basis-point cut next week appears likely, but after that, we’ll have to see how inflation and employment trends evolve. For now, the signs are pointing toward additional near-term relief in mortgage rates, which should sustain momentum in both purchase and refinance activity.

Home prices drop for first time since Spring

National median list prices fell last week, marking the first annual decline since the spring, as sellers finally adjusted to stalled demand. The national median list price dropped 0.9% year-over-year, while price per square foot fell for the first time in two years, signaling underlying values are starting to soften. Here are other key trends:

• New listings decline: Fresh listings fell 1.9% from last year—the first decline since April and the steepest drop since January—as frustrated sellers withdrew from the market.

• Inventory remains elevated: Active listings climbed 18.4% year-over-year, marking the 96th consecutive week of gains, with about 1.1 million homes for sale nationally.

• Difference between regions: The West and South are experiencing slower markets with higher supply, while the Midwest and Northeast remain relatively tighter.

Our take

The long-anticipated shift in seller behavior is finally showing up in the data. After months of holding firm, homeowners are cutting prices as they start to recognize the affordability pressures facing buyers and the weak demand in the market. For buyers, this could mark the start of more negotiable deals, especially in metros tilting toward buyer’s market conditions. For sellers, the lesson is clear: clinging to spring pricing no longer works. Agents who can help sellers adapt to that reality faster will close more sales.

Foreclosure activity rises for sixth straight month

ATTOM’s August U.S. Foreclosure Market Report shows foreclosure activity continuing to climb. A total of 35,697 properties had foreclosure filings—default notices, scheduled auctions, or bank repossessions—which was down 1% from July, but up 18% year-over-year, marking the sixth consecutive month that number has risen.

Lenders initiated 24,254 foreclosure starts, essentially flat month-over-month, but up 17% from last year, with Texas, Florida, and California leading the nation.

Here are the top three states and metros with the highest foreclosure rates in August.

Our take

Foreclosures are creeping higher slowly, but steadily. While levels are still below pre-pandemic norms, the trend signals that elevated housing costs and high interest rates are catching up with some homeowners. For agents and investors, this creates two parallel realities: distressed sellers may bring more inventory to market, while buyers gain opportunities to negotiate on troubled properties. The challenge – and the opportunity – lies in recognizing early where foreclosure pressures are clustering, especially in states like Nevada, South Carolina, and Florida. Those who track these shifts closely will be best positioned to act before the rest of the market catches on.

Schematics

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• Google search versus AI search: what agents need to know

• Mansions are selling at a record clip in this famously wealthy NYC suburb

Foundation Plans

Advice from James and David to win the day

Most agents treat email like a megaphone, blasting out listings, stats, or neighborhood highlights. The problem? Buyers already get faster, cleaner versions of that information from portals and apps. What they don’t get is a genuine, human connection. If you want your emails to stand out, the key isn’t more data, it’s sparking conversations that feel personal and worthy of engagement. Today, we’d like to give you some tips on how to do that. 

1. Lead with simple, human questions – Instead of long newsletters or “just listed” announcements, start with short, low-stakes questions like, “Are you still interested in buying a home in [city]?” These are easy for buyers to answer with a quick yes or no, lowering the psychological barrier to engagement. The goal isn’t to overwhelm with information, but to create an opening for dialogue that feels natural and pressure-free.

2. Map your responses in advance – A big mistake agents make is panicking when someone replies. Don’t wing it—plan how you’ll handle yes, maybe, or no responses before you hit send. Having clear follow-up questions (“Are you only looking at on-market homes, or would off-market opportunities interest you too?”) keeps the conversation flowing and positions you as resourceful and prepared.

3. Focus on the buyer’s real needs – Buyers don’t think in terms of “real estate needs.” They think in terms of dogs needing a yard, kids needing more space, or wanting to shorten their commute. Tailor your responses around these real-life situations, and you’ll transform from being “just another agent” into someone who truly understands what matters most to them.

4. Prioritize conversations over perfection – Many agents obsess over design-heavy newsletters and perfect timing. The reality is that having 100 small, casual conversations will open more doors than three polished campaigns that get no replies. Volume plus consistency creates more opportunity, and when your message feels human, buyers are far more likely to respond.

Our thoughts on this subject were deeply influenced by this excellent piece from Sharran Srivatsaa. We can’t recommend it to you highly enough! Dive into it and let us know what you think.

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Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.” — Warren Buffett

Don’t let events or other people set your agenda. Stay ruthlessly focused on your goals — your time is limited, and you only get one life. Make the most of it. Have a great weekend, friends! We’ll see you back here on Tuesday.

- James and David