4 constructive readings
3 destructive readings
2 flat prints
We have now not too long ago skilled a couple of weeks of constructive year-over-year development, which hasn’t occurred a lot over the previous few years.
Mortgage charges have barely elevated currently, however there’s nonetheless a silver lining. If we will preserve a constructive pattern when charges are hovering across the 6.64% mark, we’ll see a lift in house gross sales if mortgage charges simply head down towards 6%.
The essential issue right here is the period of decrease mortgage charges. I talked extra about this subject throughout a latest episode of the HousingWire Every day podcast, the place I unpacked the information and its implications.
Final 12 months, when mortgage charges ranged from 6.75% to 7.50%, the weekly knowledge regarded like this:
14 destructive prints
2 flat prints
2 constructive prints
There was no year-over-year development to report when evaluating 2024 and 2023. And keep in mind, mortgage charges fell to round 6% in late 2022 and early 2023. By early 2024, mortgage charges elevated barely to six.63%.
Weekly pending gross sales
The newest weekly pending contract knowledge from Altos affords precious insights into present traits in housing demand. Final 12 months, after charges fell towards 6%, this knowledge 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.
Pending weekly gross sales usually are not getting worse, however we solely see a slight enchancment. With buy apps, it usually takes 30 to 90 days earlier than gross sales knowledge is accessible, and also you want roughly 12 to 14 weeks of constructive knowledge to create a development narrative. Nonetheless, our shorter weekly contract knowledge traces are exhibiting enchancment.
Weekly pending contracts for the previous week over the previous a number of years:
2025: 333,385
2024: 345,502
2023: 320,804
10-year yield and mortgage charges
In my 2025 forecast, I anticipate the next ranges:
Mortgage charges will probably be between 5.75% and seven.25%
The ten-year yield will fluctuate between 3.80% and 4.70%
Final week was a whirlwind of information and headlines! Regardless of a barrage of eye-catching headlines and a sell-off that despatched the inventory market into correction territory, bond yields and mortgage charges surprisingly didn’t dip. The bond market held its floor after hitting lows on Monday. This might sound puzzling, however I attempt to make sense of the chaos on this podcast.
Mortgage spreads
At this time’s housing market would look fairly totally different if mortgage spreads hadn’t improved in 2024 and 2025. Often, we see these spreads hanging out between 1.60% and 1.80%. If we had been nonetheless going through the difficult mortgage spreads from 2023, we’d be taking a look at mortgage charges which can be a stunning 0.74% larger proper now.
On the flip aspect, if the spreads had been extra like what we’ve seen prior to now, our present mortgage charges might be decrease by about 0.76% to 0.86%. Simply think about — if these spreads return to regular, we might be taking a look at mortgage charges close to 6%.
Waiting for the remainder of this 12 months, I anticipate solely a modest decline in mortgage spreads, round 0.27% to 0.41%, working off the two.54% common we noticed in 2024. We’ve been near reaching that forecast a couple of instances this 12 months however haven’t gotten there but.
Weekly housing stock knowledge
Spring is lastly right here, and you realize what which means — it’s time for the standard stock increase that occurs yearly! I’ve to say that the most effective a part of the housing story in 2024 has been watching the energetic stock attempt to get again to a extra regular stage. Whereas it didn’t fairly get there, the progress we’ve seen has been constructive.
Weekly stock change (March 7-March 14): Stock rose from 642,359 to 655,626
The identical week final 12 months (March 8-March 15): Stock rose from 500,579 to 507,160
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 had been 982,369
New listings knowledge
Considered one of my most vital housing predictions for 2024 ended up being a swing and a miss. I wholeheartedly believed that new listings would hit at the very least 80,000 throughout the season’s peak weeks — this was the norm earlier than the pandemic shook issues up. I ended up being off by about 5,000 listings, and that miscalculation affected my home-price development forecast. I believed we’d see a modest enhance of two.33%, however I underestimated the market.
However there may be some excellent news after a rocky begin to the 12 months: it appears like we’re lastly inching nearer to that elusive 80,000 minimal.
To present you some perspective, throughout the years of the housing bubble crash, new listings had been hovering between 250,000 and 400,000 per week for a few years. So the expansion in new listings knowledge is simply attempting to get again to regular the place the seasonal peaks would vary between 80,000-110,000 per week.
The nationwide new itemizing knowledge for final week over the earlier a number of years:
2025: 68,191
2024: 59,542
2023: 41,415
Worth lower share
In a median 12 months, about one-third of all properties usually expertise a value lower, which displays the housing market’s traditional dynamics. As stock will increase and mortgage charges keep elevated, the price-cut share knowledge has been larger than when charges had been decrease.
As we look forward to 2025, I predict a modest house value development of 1.77%. We’ll probably see one other 12 months of destructive actual house value development. With extra properties out there and excessive mortgage charges, I must be proper except mortgage charges fall towards 6%. That’s how I misplaced my 2.33% value development forecast.
Curiously, the share of value cuts has been rising earlier this 12 months in comparison with earlier years, so my forecast stays the identical. Right here’s a fast snapshot of the value reductions from final week over the previous few years:
2025: 34%
2024: 31%
2023: 31%
The week forward: Fed week, retail gross sales and housing knowledge
On Monday’s HousingWire Every day podcast, we’ll take a look at the complexities of the Federal Reserve’s upcoming assembly and the potential of a brand new coverage period with so many unknowns to contemplate. I’m particularly trying ahead to the Q&A session.
Additionally, don’t overlook we’ve retail gross sales knowledge on Monday, which may shake up the bond market a bit. And let’s regulate the jobless claims knowledge popping out on Thursday; it’s been trying higher during the last two weeks.
Additionally, we’ll have a ton of housing knowledge this week, together with the builders’ confidence, housing begins and current house gross sales, so buckle up for Fed week and no matter different commerce struggle faucet dance headlines we get.