A recent rally in refinancings after mortgage rates fell briefly in September tended to favor borrowers who could move fast and meet strict credit requirements, Morgan Stanley reported in its weekly mortgage note.

Most consumers did not benefit from the dip, the investment banking giant said. Instead, new loans to purchase homes were the primary driver of mortgage issuance at the time.

Prepayment speeds, the rate at which borrowers pay off their mortgages ahead of schedule, often through refinancing, jumped sharply when mortgage rates dipped briefly. The September data shows that both 30-year conventional and Ginnie Mae loans saw a notable increase in prepay speeds, as homeowners rushed to take advantage of lower rates.

However, this window was short-lived. With rates remaining relatively high and lending standards tight, few were able to take advantage of the respite to refinance and prepay their loans.

Strategists at the investment firm expect that for the majority, refinancing opportunities remain limited, and prepayment activity is expected to slow again unless rates drop further or standards loosen.

There has been a decline in housing construction due to a shortage of skilled labor, resulting in longer timelines, according to the Home Builders Institute’s fall report.

The report estimates there has been a $10.8 billion cost to the economy because of the shortage.

The National Association of Home Builders broke down this figure explaining in the report that there is a $2.66 billion cost in higher carrying costs for holding onto undeveloped land and $8.14 billion in lost single-family home building, which accounted for about 19,000 homes.

The report also shows there are currently 3.3 million payroll residential construction workers. Over the last year, homebuilders have lost 26,100 workers and the wages of homebuilding non-supervisory workers rose by 9.2% in July, easily outpacing inflation.

There was a decrease in the construction of custom homes in 2024, according to data calculated from a U.S. Census Bureau construction survey.

The data shows last year 17.5% of all new single-family homes were custom homes. It was 18.8% in 2023 and 20.4% in 2022.

The total number of custom homes started in 2024 was 176,932, which is a decline from 177,850 in 2023, according to Census data.

Additionally, data shows that last year, 73.1% of the single-family homes started were built for sale, while 9.3% were built for rent.

This year, quarterly Census Bureau data, which is often revised, shows that there were 54,000 total custom-building starts in the second quarter of 2025.