Weekly housing inventory data
Despite a slower inventory growth this week, totaling 6,803 which falls below the target range of 11,000 -17,000 due to elevated mortgage rates, hitting the target level five times this year compared to none last year has significantly improved the housing market in 2024. The inventory growth data for this year reflects a much healthier picture than in 2023.
- Weekly inventory change (June 29-July 5): Inventory increased from 645,770 to 652,573
- Same week last year (June 30-July 7): Inventory rose from 466,534 to 466,001
- The lowest inventory point was in 2022 at 240,497
- This week marks the peak inventory for 2024 at 652,573
- For comparison, active listings during this week in 2015 were 1,183,882
New listings data
We are currently in the peak season for new listings, anticipating a decline in the coming weeks. Despite year-over-year growth, we have not yet reached the minimum target level of 80,000 new listings. Here are the new listings for the past week over the last few years:
- 2024: 71,181
- 2023: 58,289
- 2022: 89,221
Price-cut percentage
On average, one-third of all homes undergo a price cut annually. Due to sustained elevated rates, the price-cut percentage is higher than the previous two years, with certain regions in the U.S. experiencing higher inventory levels than the national average.
Recent discussions on the HousingWire Daily podcast highlighted the projected cooling down of price growth data in the second half of the year.
Here are the price-cut percentages for the previous week over the last few years:
- 2024: 38%
- 2023: 33%
- 2022: 32%
Pending sales
Presented below is the year-over-year weekly pending contract data from Altos Research, indicating real-time demand. Despite a slight increase in sellers who are also buyers, this year shows a slightly higher demand. While this week exhibited minimal year-over-year growth, there may be a holiday week effect. Overall, there has been marginal growth in pending contracts for the year, potentially influenced by mortgage rate trends.
Current pending contract data reflects growth:
- 2024: 381,057
- 2023: 381,036
- 2022: 420,816
10-year yield and mortgage rates
Recent fluctuations in the 10-year yield, particularly following Jobs Friday, have influenced mortgage rates. The bond yields observed a downward trend post-jobs report, subsequently impacting mortgage rates.
Mortgage spreads
The spread between the 30-year mortgage rate and the 10-year yield has shown improvement this year compared to previous years. Despite not yet reaching average spread levels, the progress made in this regard is positive.
If we consider the worst spread levels from 2023, current mortgage rates could be 0.56% higher. This improvement in spreads is a notable development in the housing market.
Purchase application data
The recent halt in the three-week positive streak of purchase application data is attributed to rising rates. This demonstrates the impact of weekly rate fluctuations on demand dynamics.
Since the decline in mortgage rates in November 2023, the week-to-week purchase application data has shown a mix of positive, negative, and flat prints. The year-to-date data for 2024 reflects a decline in demand due to rising rates.
The week ahead: Inflation, Powell testimony, auctions, and Fed speeches
Upcoming events include CPI and PPI inflation reports, Powell’s testimony before Congress, and speeches by Fed officials. The focus will be on assessing any impact of recent labor market data trends on the Federal Reserve’s stance. Additionally, bond auctions will be monitored to gauge potential yield fluctuations.