Boban John
- 4 positive readings
- 3 negative readings
- 2 flat prints
We have recently experienced a few weeks of positive year-over-year growth, which hasn’t happened much over the past few years.
Mortgage rates have slightly increased lately, but there’s still a silver lining. If we can maintain a positive trend when rates are hovering around the 6.64% mark, we will see a boost in home sales if mortgage rates just head down toward 6%.
The crucial factor here is the duration of lower mortgage rates. I talked more about this topic during a recent episode of the HousingWire Daily podcast, where I unpacked the data and its implications.
Last year, when mortgage rates ranged from 6.75% to 7.50%, the weekly data looked like this:
- 14 negative prints
- 2 flat prints
- 2 positive prints
There was no year-over-year growth to report when comparing 2024 and 2023. And remember, mortgage rates fell to around 6% in late 2022 and early 2023. By early 2024, mortgage rates increased slightly to 6.63%.
Weekly pending sales
The latest weekly pending contract data from Altos offers valuable insights into current trends in housing demand. Last year, after rates fell toward 6%, this data line showed noticeable improvement versus prior years. However, as mortgage rates started to rise late into 2024 and have stayed elevated in 2025, that has facilitated a slight but consistent decline in pending sales year over year.
Pending weekly sales are not getting worse, but we only see a slight improvement. With purchase apps, it typically takes 30 to 90 days before sales data is available, and you need approximately 12 to 14 weeks of positive data to create a growth narrative. However, our shorter weekly contract data lines are showing improvement.
Weekly pending contracts for the past week over the past several years:
- 2025: 333,385
- 2024: 345,502
- 2023: 320,804
10-year yield and mortgage rates
In my 2025 forecast, I anticipate the following ranges:
- Mortgage rates will be between 5.75% and 7.25%
- The 10-year yield will fluctuate between 3.80% and 4.70%
Last week was a whirlwind of data and headlines! Despite a barrage of eye-catching headlines and a sell-off that sent the stock market into correction territory, bond yields and mortgage rates surprisingly didn’t dip. The bond market held its ground after hitting lows on Monday. This might seem puzzling, but I try to make sense of the chaos on this podcast.
Mortgage spreads
Today’s housing market would look quite different if mortgage spreads hadn’t improved in 2024 and 2025. Usually, we see these spreads hanging out between 1.60% and 1.80%. If we were still facing the challenging mortgage spreads from 2023, we’d be looking at mortgage rates that are a surprising 0.74% higher right now.
On the flip side, if the spreads were more like what we’ve seen in the past, our current mortgage rates could be lower by about 0.76% to 0.86%. Just imagine — if those spreads return to normal, we could be looking at mortgage rates near 6%.
Looking ahead to the rest of this year, I expect only a modest decline in mortgage spreads, around 0.27% to 0.41%, working off the 2.54% average we saw in 2024. We’ve been close to reaching that forecast a few times this year but haven’t gotten there yet.
Weekly housing inventory data
Spring is finally here, and you know what that means — it’s time for the usual inventory boost that happens every year! I have to say that the best part of the housing story in 2024 has been watching the active inventory try to get back to a more normal level. While it didn’t quite get there, the progress we’ve seen has been positive.
- Weekly inventory change (March 7-March 14): Inventory rose from 642,359 to 655,626
- The same week last year (March 8-March 15): Inventory rose from 500,579 to 507,160
- The all-time inventory bottom was in 2022 at 240,497
- The inventory peak for 2024 was 739,434
- For some context, active listings for the same week in 2015 were 982,369
New listings data
One of my most significant housing predictions for 2024 ended up being a swing and a miss. I wholeheartedly believed that new listings would hit at least 80,000 during the season’s peak weeks — this was the norm before the pandemic shook things up. I ended up being off by about 5,000 listings, and that miscalculation affected my home-price growth forecast. I thought we’d see a modest increase of 2.33%, but I underestimated the market.
But there is some good news after a rocky start to the year: it feels like we’re finally inching closer to that elusive 80,000 minimum.
To give you some perspective, during the years of the housing bubble crash, new listings were soaring between 250,000 and 400,000 per week for many years. So the growth in new listings data is just trying to get back to normal where the seasonal peaks would range between 80,000-110,000 per week.
The national new listing data for last week over the previous several years:
- 2025: 68,191
- 2024: 59,542
- 2023: 41,415
Price cut percentage
In an average year, about one-third of all homes typically experience a price cut, which reflects the housing market’s usual dynamics. As inventory increases and mortgage rates stay elevated, the price-cut percentage data has been higher than when rates were lower.
As we look ahead to 2025, I predict a modest home price growth of 1.77%. We will likely see another year of negative real home price growth. With more homes available and high mortgage rates, I should be right unless mortgage rates fall toward 6%. That is how I lost my 2.33% price growth forecast.
Interestingly, the percentage of price cuts has been rising earlier this year compared to previous years, so my forecast remains the same. Here’s a quick snapshot of the price reductions from last week over the past few years:
- 2025: 34%
- 2024: 31%
- 2023: 31%
The week ahead: Fed week, retail sales and housing data
On Monday’s HousingWire Daily podcast, we’ll look at the complexities of the Federal Reserve’s upcoming meeting and the possibility of a new policy era with so many unknowns to consider. I’m especially looking forward to the Q&A session.
Also, don’t forget we have retail sales data on Monday, which could shake up the bond market a bit. And let’s keep an eye on the jobless claims data coming out on Thursday; it’s been looking better over the last two weeks.
Also, we’ll have a ton of housing data this week, including the builders’ confidence, housing starts and existing home sales, so buckle up for Fed week and whatever other trade war tap dance headlines we get.
