Last week saw a significant rise in the 10-year yield, leading to higher mortgage rates. But did this affect the housing market data? Despite the rate increase, purchase application data has been strong, showing a 9% week-over-week growth and a 10% year-over-year increase. Will this trend continue?
Purchase application data
The latest purchase application data indicates a positive trend, with consistent growth despite high mortgage rates hovering above 6.64% throughout most of the year. In 2025, there were 7 positive readings, 3 negative readings, and 3 flat prints in the weekly data.
Looking back at last year, when mortgage rates rose towards 7.50%, there were 14 weeks of negative data prints and only two positive and flat prints. The upcoming week might see a decline in purchase applications if rates continue to rise rapidly.
Weekly pending sales
Recent weekly pending contract data from Altos Research shows positive year-over-year growth, indicating a pickup in housing demand. Total pending contracts for 2025 were higher than the previous years, with an increase from 2024.
10-year yield and mortgage rates
The forecast for 2025 anticipates mortgage rates between 5.75% and 7.25% and the 10-year yield fluctuating between 3.80% and 4.70%. Market volatility has made it challenging for consumers and industry professionals, impacting purchase applications. Stabilizing circumstances are needed for a more predictable environment.
Mortgage spreads
Despite recent market volatility, mortgage spreads have shown improvement compared to previous years. If spreads were at 2023 levels, mortgage rates would be near 8%. The positive trend in spreads has contributed to the growth in the housing market this year.
Weekly housing inventory data
Inventory levels have been steadily increasing, showing positive growth in the housing market. While not yet at normal levels, the progress is promising for the overall market health. Weekly inventory change data indicates a rise compared to previous years.
New listings data
New listings data for 2025 shows a positive trend in the housing market, with an increase from the previous year. The growth in new listings is a step towards a more balanced market, aiming to return to normal levels seen before the housing bubble crash.
Price-cut percentage
The proportion of homes undergoing price reductions has increased this year, reflecting market dynamics and adaptation to changing circumstances. Despite this trend, there has been some stabilization in the data line in recent weeks. Future home price growth projections are influenced by current market conditions and mortgage rates.
The rise in price cuts reinforces the conservative growth price forecast for 2025. The trend in price cuts from previous years indicates a gradual increase.
The week ahead: Nothing matters until markets calm down
Economic data takes a backseat as market volatility continues to impact consumer and industry sentiment. Key indicators to monitor include retail sales, housing starts, and Fed announcements in the upcoming week. The impact of recent events on the economic landscape remains uncertain.