Market Analysis • December 16, 2025
“Prices Down” Meets +0.4%: December 10 Release Collides with FHFA House Price Data
On December 10, 2025, an official press release declared that “President Trump brings prices down,” pegging this to improving housing affordability, surging mortgage applications, and compressing mortgage-Treasury spreads. The problem: the latest quantified housing price data in hand—the FHFA House Price Index from October 28—shows prices rose +0.4% in August and were up +2.3% year-over-year, with July revised up to 0.0% from a previously reported decline. The release gives no figures for applications, spreads, rates, or wages—only assertions.
Here’s what the data reveals:
- The headline “prices down” conflicts with FHFA HPI: +0.4% MoM (Aug), +2.3% YoY; July revised to 0.0%.
- Claims of “mortgage applications at a three-year high” and “spreads compressing” appear with no dates, magnitudes, or sources.
- “Wages up” is stated but no wage data is provided in the materials.
- Regional HPI shows dispersion, not broad relief: -0.8% (Pacific) to +1.2% (Middle Atlantic) MoM; -0.6% to +6.3% YoY.
The Claim vs. the Count: Housing Prices Didn’t Fall
The latest concrete data point in the packet is the FHFA HPI print from October 28:
- August: +0.4% MoM, +2.3% YoY
- July revised: -0.1% to 0.0% (erasing the only recent decline)
That is directionally at odds with a headline of “prices down.” At best, it’s a story of stabilization turning to modest re-acceleration, not a decline.
What’s Missing: Applications, Spreads, and Wages
The December 10 release asserts:
- “Mortgage applications have risen to a three-year high”
- “Spreads between mortgages and Treasuries continue to compress, improving mortgage rates”
- “Wages up”
But it offers no index levels, no dates, no basis point moves, no survey sources, and no wage series. Without numbers, these are untestable claims—particularly problematic when tethered to affordability, a concept driven by the triangle of income, prices, and rates.
Narrative vs Data: Side-by-Side
| 12/10/2025 Release Says | Provided Data Shows | Gap Analysis |
|---|---|---|
| “Mortgage applications have risen to a three-year high” | No application counts, index levels, dates, or sources provided. | Unsubstantiated claim; no verifiable data in the release set. |
| “Spreads between mortgages and Treasuries continue to compress, improving mortgage rates” | No spread or rate data provided. | Causal link asserted without evidence. |
| “President Trump brings prices down” | FHFA HPI (10/28/2025): +0.4% MoM (Aug); +2.3% YoY; July revised to 0.0%. | Direct conflict with the latest quantified house price data. |
| “Restore the American dream of affordable homeownership” | FHFA HPI regional data: -0.8% (Pacific) to +1.2% (Middle Atlantic) MoM; -0.6% to +6.3% YoY. | Mixed regional picture; no evidence of a broad affordability improvement. |
| “Wages up” | No wage data provided. | Unsubstantiated within the materials. |
The Revision That Undercuts the Headline
The July FHFA HPI revision from -0.1% to 0.0% matters. It removes the only recent decline and strengthens the case that prices are at least steady, if not pushing higher in pockets. That nuance is absent from the December 10 narrative. If your story is “prices down,” you don’t want the hard data saying “flat to up.”
Monthly Trends on Record
| Metric (FHFA HPI) | Jul 2025 (Prev) | Jul 2025 (Revised) | Aug 2025 | Direction |
|---|---|---|---|---|
| Monthly change | -0.1% | 0.0% | +0.4% | Up (revision removes prior decline; August rises) |
Regional dispersion reinforces the point: -0.8% MoM Pacific vs +1.2% MoM Middle Atlantic, and -0.6% to +6.3% across 12-month changes. That’s not “prices down”; that’s “prices diverge.”
Applications and Spreads: Evidence-Free Assertions
If applications truly hit a three-year high, we need dates, index values (e.g., the MBA Purchase Index), and levels relative to refinancing activity. If spreads compressed, we need:
- The primary mortgage rate versus the 10-year Treasury
- The MBS current-coupon OAS
- Timing (daily/weekly/monthly) to link any move to policy or sentiment
Without even a basis point count, the release asks investors to accept a causal chain—“compressing spreads” ➔ “improving mortgage rates” ➔ “faith in leadership”—with no observable links. Markets price evidence, not vibes.
Historical Drift: Messaging vs. Measured Data
| Release Date | Core Message | Quantified Data Provided | Consistency Check |
|---|---|---|---|
| 10/28/2025 | HPI shows prices rising | +0.4% MoM (Aug); +2.3% YoY; July to 0.0%; regional ranges | Rising nationally, mixed regionally |
| 12/10/2025 | “Prices down,” “applications at three-year high,” “spreads compress” | No figures on applications, spreads, rates, prices, or wages | Narrative drift; contradicts latest quantified price data |
The absence of acknowledgment about July’s upward revision is telling. It weakens the “decline” storyline and suggests the December 10 text is narrative-first, data-later.
What This Means for Markets
Housing Equities: Price Resilience Is Still the Base Case
- With +0.4% in August and a 0.0% July, national home prices are not falling in the latest verified print. That supports homebuilders with strong backlogs and disciplined spec exposure.
- Regional divergence matters: Middle Atlantic strength vs Pacific softness. Builders and suppliers with Middle Atlantic concentration may see firmer pricing power; Pacific-heavy exposures face a cooler tape.
MBS and Rate-Sensitive Assets: Don’t Buy a Spread Story Without the Spread
- A claim of “compressing spreads” without basis points is not tradable. For positioning, watch:
- The 30-year primary mortgage rate vs the 10-year Treasury yield (primary-secondary spread)
- MBS current-coupon OAS and specified pool pay-up behavior
- Prepayment speeds (if rates truly improved, prepays should nudge up)
- In the absence of hard spread compression, favor higher-quality MBS over beta-heavy cohorts; keep duration hedges tight.
Macro Narrative Risk: Signal vs. Spin
- When releases lean on assertions over numbers, narrative risk rises. Expect higher headline volatility and shorter shelf life for policy-linked “good news” without corroborating data.
- For rate path expectations, anchor to verifiable series: FHFA HPI, Case-Shiller, MBA weekly applications, Freddie Mac PMMS, and BLS wage prints. Until those show synchronized improvement in affordability (prices flat/down, wages up, rates lower), treat “prices down” as unproven.
The Investor Takeaway
Actionable positioning while the narrative outruns the numbers:
- Housing equities: Prefer operators with exposure to regions showing MoM strength (e.g., Middle Atlantic) and tight spec controls. Be cautious on Pacific-heavy footprints until data confirm a bottom.
- MBS: Maintain a quality tilt and avoid overpaying for a “compression” story that isn’t in the tape. Use TBA vs. specified pool relative value opportunistically if true rate relief appears in PMMS and speeds.
- Rate hedging: Keep balanced duration. If spreads don’t actually tighten, long-duration, mortgage-heavy portfolios underperform.
- Data watchlist for validation:
- MBA Purchase Index (for the “three-year high” claim)
- Freddie Mac PMMS 30-year rate and primary-secondary spread
- FHFA HPI (next print) and regional breakouts
- BLS Average Hourly Earnings or ECI for the “wages up” claim
A final word: affordability is a three-variable function—prices, wages, and rates. The December 10 release staked its narrative on improvement across the board, but only one of those variables has hard, recent data here—and it says prices rose +0.4% in August. Until the rest of the numbers show up, trade the evidence, not the headlines.