The housing market in 2024 has seen a positive development with the increase in active housing inventory, nearing levels last seen in 2019. Despite those levels being at a five-decade low before the impact of COVID-19, the market is functioning better than it did from 2020 to 2023.
There was an unhealthy imbalance in the first few years of COVID-19 recovery, with too many buyers competing for too few homes. For instance, in March 2022, only 240,000 homes were available for sale. Looking ahead to 2025, the market is in a better position if mortgage rates drop towards 6%, a scenario that was not possible before.
Weekly housing inventory data
On the HousingWire Daily podcast episode on Monday, the 2024 housing market review will be discussed. An interesting point to note is that the increase in inventory has not led to the anticipated national home-price crash, contrary to predictions from some experts. The market is gradually returning to normal, moving away from the severely unhealthy inventory conditions of recent years.
- Weekly inventory change (Dec. 20-Dec. 27): Inventory decreased from 667,466 to 650,992
- The same week last year (Dec. 22-Dec. 29): Inventory decreased from 528,601 to 513,240
- The lowest inventory was in 2022 at 240,497
- The peak inventory for 2024 so far is 739,434
- For comparison, active listings in the same week in 2015 were 994,396
New listings
The new listing data for 2024 shows positive growth, though it fell short of the expected seasonal peak. The highest new listings reached slightly over 75,000 weekly. In standard market years between 2013 and 2019, peak monthly new listings ranged from 80,000 to 110,000. However, the past two years have not followed this trend.
While aiming for more normal numbers this year, there has been observable growth. For context, new listing data during the housing crash bubble years ranged from 250,000 to 400,000 per week.
New listings data for the last week in recent years:
- 2024: 32,462
- 2023: 24,462
- 2022: 19,128
Price-cut percentage
On average, around one-third of all homes typically experience a price cut in a year, reflecting the usual dynamics of the housing market. Changes in mortgage rates often influence the percentage of homes reducing their prices. Recent data suggests that home prices in 2024 may hold better than initially forecasted.
Last week’s price-cut percentages compared to previous years:
- 2024: 36.4%
- 2023: 35%
- 2022: 38%
Weekly pending sales
Recent weekly pending contract data from Altos Research indicates a rise in year-over-year pending contracts compared to 2022 and 2023, despite increasing mortgage rates. This suggests a firmer market bottom has been established. However, there was a slowdown in sales data last week, emphasizing the need for monitoring, especially with potential rate changes in 2025.
Weekly pending contracts for the last week in recent years:
- 2024: 269,337
- 2023: 258,368
- 2022: 251,722
Purchase applications
Purchase application data was not released during the holiday week but is expected to resume next week. Despite rising mortgage rates, there were more positive weeks than negative in the last 10 weeks of the year, reflecting typical seasonal demand. The trend this year is unique due to rate fluctuations compared to previous years.
10-year yield and mortgage rates
The 10-year yield has remained stable, causing minimal movement in mortgage rates. Favorable mortgage spreads have contributed positively to rates, particularly as the 10-year yield nears yearly highs. Comparatively, when the 10-year yield was similarly high earlier this year, mortgage rates were notably higher.
Mortgage spreads
A significant improvement in mortgage spreads in 2024 has positively impacted the housing market. Without this shift, discussions about the market would differ significantly. Peak negative spreads in 2023 would have pushed mortgage rates much higher, emphasizing the importance of current favorable spreads.
The week ahead: Pending home sales and home prices
Stay tuned for discussions on pending home sales and home-price data in the upcoming week, along with other market reports. The jobless claims data will be particularly important to monitor, as it reflects labor market conditions. Despite the holiday week, significant insights and forecasts will be shared to keep you informed.
Be sure to catch the podcast on Dec. 31 for a recap of the HousingWire 2025 Housing Market Forecast and further insights into inventory trends.
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