The Stability of Housing Demand Pre-War
Before the onset of the war, the housing market was experiencing a period of smooth and steady growth, marking its best performance in years despite the challenges posed by snow events. Purchase applications reached multi-year highs, reflecting a positive trend in weekly pending home sales.
Although purchase application data had consistently shown year-over-year growth throughout the year, there was a recent decline in demand, with a 5% decrease in week-to-week data and a slowdown in year-over-year growth from 12% to 5%.
Our weekly pending sales data, set to be updated in the Housing Market Tracker over the weekend, had been consistently showing positive growth, especially after factoring out the impact of snow events. However, the ongoing conflict may have influenced the recent trends, and its effects will be closely monitored.
Implications and Outlook
The sudden shift in mortgage rates due to the war in March has presented challenges for the mortgage and real estate industries. The volatility in rates, influenced by geopolitical events, has made the process of locking rates and facilitating home purchases more complex.
As uncertainties persist, there is a possibility for rates to climb higher, potentially reaching peak forecasts. In the upcoming podcast, Editor in Chief Sarah Wheeler and I will delve into the potential outcomes for the housing market in light of the escalating conflict.