Real-time housing demand is showing positive signs despite seasonal fluctuations, thanks to the stabilization of lower mortgage rates. While sustained demand growth may require rates to drop below 6% for an extended period, the recent flip in housing data is a promising development amidst affordability challenges.
Weekly Pending Sales
Altos Research provides weekly pending contract data, which reflects the current demand trends. Despite the seasonal nature of the data, recent firming up of pending contracts indicates a positive trend. It will be interesting to see if this trend continues, given the usual seasonal decline expected.
- 2024: 362,620
- 2023: 340,526
- 2022: 380,823
Purchase Application Data
Despite a slight increase in mortgage rates, there have been five consecutive weeks of positive purchase applications. This marks the first positive year-over-year print since 2022, indicating a positive shift in the market. The data shows a notable improvement since rates started to fall in mid-June.
- 14 negative prints
- 2 flat prints
- 2 positive prints
The recent positive trend in purchase applications contrasts with the negative curve seen when rates were on the rise earlier in the year.
10-Year Yield and Mortgage Rates
Forecasted mortgage rates and 10-year yields have been influenced by recent economic data and Federal Reserve announcements. The rise in 10-year yields has led to a slight bounce in mortgage rates, indicating a need for weaker economic data or a dovish Fed stance to push rates lower.
- A range for mortgage rates between 7.25% – 5.75%
- A range for the 10-year yield between 4.25% – 3.21%
Mortgage Spreads
Positive trends in mortgage spreads have contributed to lowering mortgage rates in 2024 compared to 2023. However, there is still room for improvement to reach historical norms. Lower spreads could potentially drive mortgage rates down further, benefiting buyers in the market.
Weekly Housing Inventory Data
Recent inventory growth has shown positive signs, with a notable increase in active listings compared to previous years. While this week saw a slight slowdown in inventory growth, the overall trend remains positive for 2024.
- Weekly inventory change (Sept. 20 – Sept. 27): Inventory rose from 725,249 to 731,017
- The same week last year (Sept. 21 – Sept. 28): Inventory rose from 528,797 to 534,746
- The all-time inventory bottom was in 2022 at 240,497
- The yearly inventory peak for 2024 is 731,017
- Active listings for this week in 2015 were 1,188,505
New Listings Data
The growth in new listings in 2024 compared to 2023 indicates a positive trend in the market. While the numbers may not have reached pre-COVID-19 levels, the improvement is a step in the right direction for the housing market.
- 2024: 63,022
- 2023: 56,168
- 2022: 59,780
Price-Cut Percentage
The percentage of price cuts in the housing market has shown a decline as mortgage rates have lowered. While price growth may have cooled down, the market remains active with inventory on the rise and rates stabilizing.
- 2024: 39%
- 2023: 38%
- 2022: 42%
The Week Ahead: Jobs Week and Fed Speeches
The upcoming week will be crucial for housing market analysis, with a focus on labor data and Federal Reserve speeches. The bond market’s reaction to this data, along with Fed announcements, will play a significant role in shaping market trends.