Weekly housing inventory data
The housing inventory is currently experiencing its usual seasonal decline for December. The growth in inventory, which was promising earlier in the year, has slowed down significantly over the past few months. The latest inventory growth percentage now stands at 13.54%, a positive but weaker figure compared to the over 30% growth seen earlier in the year.
Several factors have contributed to this change, including more sellers transitioning into buyers earlier in the year. Purchase application data consistently showed positive year-over-year growth. Additionally, new listings data returned to more typical levels after many years. Despite these positive signs, mortgage rates did not drop below 6.64% until the second half of the year.
New listings growth reached its peak in late May, followed by a decrease as some sellers decided to hold off. However, mortgage demand and sales increased, with the latest existing home sales report hitting a 9-month high. This growth, albeit from historically low levels, has contributed to a slight firming up of home prices as indicated by the S&P CoreLogic Case-Shiller Home Price Indices.
- Weekly inventory change (Dec. 12-19): Inventory decreased from 775,339 to 757,760
- Same week last year (Dec. 13-Dec. 20): Inventory decreased from 682,152 to 667,417
New listings data
New listings are also following the traditional seasonal decline pattern. Despite reaching above 80,000 earlier in the year, new listings did not see significant growth after May and are now on the decline. The goal is to maintain new listings data between 80,000-100,000 during peak periods each year, reflecting pre-COVID normalcy from 2013-2019.
In comparison, during the housing bubble crash years, new listings soared between 250,000 and 400,000 per week. Last week’s new listings data for the past two years:
- 2025: 38,260
- 2024: 39,260
Price-cut percentage
Price cuts are a common occurrence in the housing market, with approximately one-third of homes experiencing reductions. The price cut percentage growth rate has cooled off and is now following its seasonal decline pattern. My 2025 price forecast anticipated a modest 1.77% increase in home prices, which seems to be aligning with the current trend.
Last week’s price-cut percentages for the past two years:
Mortgage rates, spreads, and the 10-year yield
For 2025, the forecasted ranges for mortgage rates and the 10-year yield have been relatively accurate. Mortgage rates have fluctuated between 6.12% and 7.26%, with the 10-year yield ranging from 3.87% to 4.79%. The current rates are holding steady, with last week’s mortgage rates between 6.29% and 6.22%.
Mortgage spreads (the hero of housing In 2025!)
Mortgage spreads have shown improvement in 2025, exceeding the forecasted range. This improvement has been beneficial for the housing market, bringing rates closer to normal levels. If spreads continue to improve, there is potential for further benefits in 2026.
Mortgage purchase application data
Mortgage purchase application data has been positive over the last 19 weeks, reaching multiyear highs as we approach 2026. Consistent positive week-to-week and year-over-year growth data is a promising indicator for the housing market.
- 11 positive week-to-week prints
- 9 negative week-to-week prints
- 20 weeks of double-digit year-over-year growth
Total weekly pending home sales
Total weekly pending home sales data has shown improvement compared to previous years, remaining slightly ahead of 2024. The weekly pending home sales for last week over the past four years are:
- 2025: 296,525
- 2024: 293,258
- 2023: 267,033
- 2022: 263,937
The week ahead: A ton of bond auctions and new home sales
As we enter Christmas week, there will be a significant number of bond auctions and data releases on new home sales, durable goods, inflation, industrial production, weekly jobless claims, and the weekly ADP data. The bond trading week may be affected by the holiday season, so it’s important to interpret market reactions with caution and enjoy the festive season.