Here are the number of listings last week over the past few years:
- 2024: 68,407
- 2023: 61,707
- 2022: 73,462
Weekly housing inventory data
On the positive side for 2024, which I discussed recently on the HousingWire Daily podcast, active inventory is growing, and growing well. While inventory levels in the United States have not yet returned to normal levels, especially given our population today, we are working to increase inventory levels.
Since I’m not a mortgage rate lock-in person, I would like to see inventory grow as mortgage rates are at their recent highs. We can’t assume higher mortgage rates are here to stay forever, so we have to build up inventory buffers wherever possible. We didn’t hit my target level this week 11,000-17,000 But inventories have grown significantly 8,883.
- Weekly inventory changes (July 19-26): Inventory growth from 668,363 arrive 677,246
- Same week last year (July 21-27): Inventories rising 480,448 arrive 485,743
- Historical inventory bottom occurs in 2022 240,497
- The annual inventory peak in 2024 is 677,246
- For some purposes, active listings this week in 2015 were 1,207,259
Price reduction percentage
On average, one in three homes loses price every year—standard housing activity. With interest rates remaining high, price reduction percentages are higher than in the past two years and inventories in some parts of the country are higher than national data. One big difference between 2024 and 2022 data is that home sales fell sharply throughout 2022, with new listings falling to all-time lows in the second half of the year. Now, home sales remain stuck at historic lows — and that’s a big difference.
A few weeks ago, I discussed on the HousingWire Daily podcast that price growth data would cool down in the second half of the year. Here are last week’s price reduction percentages over the past few years:
- 2024: 39%
- 2023: 34%
- 2022: 36%
for sale
Below is altos research corp. Weekly open contract data shows immediate demand compared with the same period last year. Our demand has increased this year as more sellers become buyers. Purchase app data tends to last 30-90 days, and the only time we see real growth in purchase app is in late 2022 and 2023, when rates dropped by more than 1%.
- 2024: 381,704
- 2023: 375,995
- 2022: 417,887
Purchase application data
Purchase application data has been slow to respond to lower mortgage rates, but four of the past seven weeks have been positive, and as crazy as it sounds, these are the best seven weeks of 2024 so far. Not much has changed with purchasing apps, with seasonality ending in May. The only time I see a positive 12-week growth trend is in late 2022 and early 2023 when mortgage rates fall back to 6%.
Since mortgage rates began to fall in November 2023, we have seen 16 positive photos, 16 negatives, and Two flat prints in weekly data. However, as mortgage rates began to rise earlier this year, we observed a decline in demand. Data so far in 2024 remains unfavorable; 10 positives and 16 negatives, and two Flat print.
10-Year Yield vs. Mortgage Rates
I’ve been talking for a while now about how the 10-year yield is going to be a tough nut to crack around the 4.20% level, and this has proven to be true once again. We can’t seem to gain any traction above or below this level, but the bond market’s median downtrend remains in place as long as labor data softens. Despite all the progress we’ve made on the inflation front, the 10-year Treasury yield currently stands at 4.20%. We haven’t gotten much interest rate movement over the past two weeks, but the Fed meeting and jobs week are coming up.
mortgage spread
Imagine if mortgage spreads had not improved this year, our housing situation would be very different today. If mortgage spreads were typical today, we would have mortgage rates below 6% and the 10-year yield would not fall significantly. Imagine if both fell together! However, the fact that we’ve made some improvements is a big deal in my book, just as the worsening of spreads last year was a negative housing story.
If we took the worst spread levels from 2023 and combined them to today, mortgage rates would be 0.58% Now higher. While our spreads are far from average, the improvement we’ve seen this year is a plus.
The week ahead: Fed meeting and jobs week!
This week is prime time for economic data and the Fed meeting – what more could you ask for when the 10-year yield is at the critical level of 4.20%? Not only do we have jobs week and the Fed meeting, but we also have housing price data, pending home sales and data from the key Fed wage tracker called the Employment Cost Index.
On Monday’s podcast, I talk about whether the Fed will cut interest rates this week – tune in to find out! I believe these words are going to be so critical now because all the labor force data has been softer lately. So buckle up, we’ve got a ton of stuff that could move interest rates in the short term, but also more importantly in the long term.
