Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Aïda Amer/Axios

Today's mortgage market is much more regulated and has much stronger fundamentals than during the housing bubble of the mid-aughts, but it's not a story that's as simple as rising demand and low supply.

What's happening: Unlike the environment ahead of the 2008 crash, housing prices are not being driven higher by a raft of underqualified borrowers getting mortgages they can't afford from unscrupulous banks.

  • They're being driven by government and central bank intervention — radically increased money supply, mortgage forbearance, stimulus checks, low taxes and low interest rates.

Driving the news: Mortgage applications decreased for the second week in a row, down 0.9% from one week earlier, according to data from the Mortgage Bankers Association (MBA) for the week ending April 30, 2021.

  • Both conventional and government purchase applications declined, but average loan sizes increased for each loan type.
  • Applications have fallen in 8 of the past 9 weeks and 13 of the 18 weeks so far this year, according to MBA's data.
  • Yet prices have only risen higher, with existing homes reaching a record high average sales price of $329,100 in March.

By the numbers: CoreLogic's latest report finds housing prices increased 11.3% in March over March 2020 — the most in 15 years — and were up 2% from February when prices jumped by 10.4%, which had been the largest annual increase since 2006.

  • Boise, Idaho, led all metropolitan areas with a year-over-year increase of 27.7%.

What they're saying: "This is a sign that the competitive purchase market, driven by low housing inventory and high demand, is pushing prices higher and weighing down on activity," Joel Kan, MBA’s associate vice president of economic and industry forecasting, says in a statement.

  • "The higher prices are also affecting the mix of activity, with stronger growth in purchase loans with larger-than-average balances.”

Between the lines: Economists have been quick to point to a lack of housing stock as the reason for rising prices, but homebuilders already have ramped up new home construction.

  • In fact, new homes made up more than a quarter (25.7%) of single-family homes for sale in the U.S. during the first quarter. That’s up from 20.4% a year earlier and represents the highest share on record, according to Redfin.
  • New home prices are only expected to rise further as prices for homebuilding essentials such as lumber, steel, copper, aluminum and corn jump.
  • New homes are on average more than $35,000 more expensive than they were last year.

The bottom line: This isn't your older brother's mortgage bubble. It's a paradigm shift in the market that could be here for quite some time.

Go deeper

A bond market peak

Data: ICE BofA via FRED; Chart: Axios Visuals

Financial markets have hit a lot of peaks this year — everything from monster year-over-year earnings, unprecedented fiscal and monetary policy support, and weekly stock market milestones.

Driving the news: Corporate bond prices were no exception — leading to record low yields. But that trend has started to reverse course.

Biden White House jammed on gas prices

Illustration: Sarah Grillo/Axios

The Biden White House increasingly views rising gasoline prices as a source of potential political peril — and is now asking some of the world's biggest oil producers to pump more oil.

Why it matters: This trend, combined with a fragile economic recovery threatened by the Delta variant of the coronavirus, and inflation beginning to bite consumers, could threaten the administration's ambitious congressional agenda for late summer and early fall.

The Delta variant brings a midsummer pause for airfares

Data: Bureau of Labor Statistics; Chart Axios Visuals

Airfares are edging lower as international travel is increasingly being discouraged by the Centers for Disease Control and Prevention.

Why it matters: The Delta variant of COVID-19, is casting a shadow over the economic recovery. A dip in airfares that had been surging could be a signal that consumers may pull back in the months to come.