What’s encouraging is that mortgage charges haven’t dipped beneath 6.64% this whole 12 months, signaling that we’ve got the potential to develop extra if mortgage charges head down towards 6% . So whereas the information is best than final 12 months, context is vital. Additionally, it takes about 30-90 days for buy apps to filter into the gross sales information.
Weekly pending gross sales
The most recent weekly pending contract information from Altos presents worthwhile insights into present tendencies in housing demand. Final 12 months, after charges fell towards 6%, this information line confirmed noticeable enchancment versus prior years. Nonetheless, as mortgage charges began to rise late into 2024 and have stayed elevated in 2025, that has facilitated a slight however constant decline in pending gross sales 12 months over 12 months. It’s not getting worse right here with our pending weekly gross sales, however I don’t see a lot enchancment but.
Weekly pending contracts for the previous week over the previous a number of years:
2025: 323,456
2024: 334,017
2023: 314,696
We now have a greater day on buy purposes however pending residence gross sales, nothing of observe.
10-year yield and mortgage charges
In my 2025 forecast, I anticipate the next ranges:
Mortgage charges shall be between 5.75% and seven.25%
The ten-year yield will fluctuate between 3.80% and 4.70%
What an exhilarating week it has been, full of information and headlines that saved everybody on their toes! The ten-year yield took us on fairly the rollercoaster trip. It kicked off the week round 4.24%, took a dip to about 4.11% amid a whirlwind of market and financial drama, after which made a pointy turnaround. Simply while you thought it was going to drop once more earlier than the roles report, Federal Reserve Chair Jerome Powell stepped in, confidently declaring that the economic system was in good condition. That announcement despatched the 10-year yield skyrocketing on Friday, closing close to the week’s highs!
In final week’s Housing Market Tracker, we talked about that for bond yields and mortgage charges to go decrease, we actually wanted to see a sell-off in shares and weaker financial information to decrease yields after that vital bounce. Whereas we did see a few of that unfolding, yields finally climbed larger. This shift got here as commerce conflict considerations started to ease and a few constructive financial indicators emerged towards the tip of the week. What a wild trip!
What’s extra attention-grabbing to me this week was this assertion from Fed Governor Bowman: “Though the FOMC has been centered on decreasing inflation previously few years, as we proceed to make progress on approaching our 2% goal, I anticipate that the labor market and financial exercise will change into a bigger issue within the FOMC’s coverage discussions.”
Labor over inflation, anybody? With that in thoughts, learn my labor mannequin for 2025 after the roles report on the way you get there!
Mortgage spreads
At present’s housing market would look totally completely different if mortgage spreads hadn’t improved in 2024 and 2025. Usually, we see these spreads hover between 1.60% and 1.80%. If we have been nonetheless grappling with the difficult mortgage spreads that outlined 2023, we’d be dealing with mortgage charges a staggering 0.71% larger proper now.
Conversely, if spreads aligned extra with historic norms, our present mortgage charges might be wherever from 0.79% to 0.89% decrease. Think about — if as we speak’s spreads have been again to regular ranges, we’d take pleasure in mortgage charges beneath 6%. That may be a sport changer, of us.
Looking forward to the remainder of this 12 months, I anticipate solely a modest enchancment in mortgage spreads, round 0.27% to 0.41% beneath the typical stage of two.54% we noticed in 2024. We’ve been near reaching that forecast a number of instances this 12 months.
Weekly housing stock information
The very best story for housing is the housing stock progress we’ve seen because the traditionally low ranges we noticed in 2022. Final week we had slight progress week over week, and we must be beginning the seasonal enhance in energetic stock now. The nearer we get to regular ranges, the higher it is going to be for housing in the long run and the expansion seen already implies that if mortgage charges go decrease, we’ve got sufficient provide to stop escalating home-price progress.
Weekly stock change (Feb. 28-March 7): Stock rose from 639,485 to 642,359
The identical week final 12 months (March 1-March 8): Stock rose from 498,339 to 500,579
The all-time stock backside was in 2022 at 240,497
The stock peak for 2024 was 739,434
For some context, energetic listings for a similar week in 2015 have been 1,081,867
New listings information
The brand new itemizing information from Altos displays houses that come to the market with out a direct contract, offering us with a real-time view of any promoting strain out there. The final two years have been the 2 lowest years for brand spanking new listings information in historical past, they usually have been additionally not wholesome years for the newest listings information.
Final 12 months, I had excessive hopes that we’d see at the least 80,000 new listings per week throughout the peak seasonal months, however sadly, that didn’t come to fruition. This 12 months, although, I strongly really feel we will lastly hit that focus on!
To present you some perspective, throughout the years of the housing bubble crash, new listings have been hovering between 250,000 and 400,000 per week. After I noticed a slight dip two weeks in the past, I admit I felt a twinge of fear about our sluggish new listings progress this 12 months.
However then got here final week; wow, we obtained a great quantity! Whereas the rise might not be dramatic in comparison with 2024 ranges, we’re inching nearer to that elusive 80,000 mark—one thing we haven’t achieved previously two years. It’s a small victory, but it surely’s a victory nonetheless, and it places a giant smile on my face!
The nationwide new itemizing information for final week over the earlier a number of years:
2025: 63,858
2024: 59,243
2023: 50,687
Worth lower proportion
In a median 12 months, about one-third of all houses sometimes expertise a worth lower, which displays the housing market’s ordinary dynamics. As stock will increase and mortgage charges keep elevated, the price-cut proportion information has been larger than when charges have been decrease.
For 2025, I predict a house worth progress of 1.77%, which signifies one other 12 months of damaging actual residence worth progress. As stock ranges rise and mortgage charges stay excessive, damaging actual residence worth progress is anticipated for 2025. The proportion of worth cuts has elevated earlier this 12 months in comparison with earlier years, so my present forecast stays intact. If charges decline sooner or later, we will reevaluate the weekly information.
Worth-cut percentages for final week over the earlier a number of years:
2025: 33.6%
2024: 31%
2023: 31%
The week forward: Inflation week and job openings information
This week guarantees to be a pivotal one on the earth of knowledge. Not solely are we anticipating essential inflation studies, however we’re additionally gearing up for one of many Federal Reserve’s key labor information releases: the job openings information.
As we glance forward, the job openings information will play a significant position, particularly as we method the center of the 12 months. With the federal government’s current actions affecting federal employees, the tightening of the cash provide, and the continued twists and turns of the commerce conflict, this information might reveal some fascinating tendencies. It will likely be intriguing to see whether or not the job market confirmed indicators of softening even earlier than these adjustments occurred. Final week, the jobless claims information did fall from its current spike.
Keep tuned, because the insights we achieve might form our understanding of the economic system within the coming months.