The housing stock increased by almost 40% last year

Weekly home inventory data

I know I shouldn’t look at a kickback week as positive stock growth, but it’s my chart party and I’ll roll it out however I want. So we accept the sixth week this year where inventory is between 11,000 and 17,000, with inventory growth of 16,910 last week.

• Weekly inventory change (July 12-19): Inventory increased from 651,453 Unpleasant 668,383
• Same week last year (July 14-21): Stock rose from 471,603 Unpleasant 480,448
• The lowest inventory level of all time was in 2022 240,497
• The annual inventory peak for 2024 is 668,383
• For some context, the active listings for this week in 2015 were 1,201,808

New advertising data

Although the data on new listings is growing year over year, as expected, I have not reached my minimum target of 80,000 for the top weeks this year. So far the weekly high print is in 2024 only 72,329. The seasonal decline in the number of new listings will start soon and we will see if we get fewer sellers than the current trend in the second half of the year.

Here you will find the number of mentions from the past week over the past years:

• 2024: 68,681
• 2023: 62,859
• 2022: 80,089

Price reduction percentage

In an average year, a third of all homes are reduced in price; this is the standard home activity. Because interest rates have remained high, the price reduction rate is higher than in the past two years, and some parts of the US have higher inventories than national data indicates.

A few weeks ago, op the HousingWire Daily podcastI discussed that price growth data will cool off in the second half of the year. Here are last week’s price reduction percentages compared to recent years:

• 2024: 39%
• 2023: 34%
• 2022: 35%

Awaiting sales

Below you will find the Alto’s research weekly ongoing contract data year on year to reflect real-time demand. Because there are more sellers who are buyers, we have a little more demand this year. Compared to the purchasing app data, these are live weekly contracts, with the purchasing app data visible for 30-90 days.

• 2024: 382,435
• 2023: 378,227
• 2022: 418,983

Buy application data

With all weekly home data, we always see a holiday impact in the data in purchasing apps. Last week the unadjusted data showed 22% weekly growth, but we never use that data line. Adjusted for seasonal influences, there was a decrease of 3%. Assuming rates fall in the second half of the year, we should keep an eye on the weekly buying apps as four of the last six weeks have been positive, and this usually takes 30-90 days to reach existing home sales. levels.

Since mortgage rates started falling in November 2023, we’ve seen it 16 positive prints, 15 negative prints, And two flat prints in the week-to-week data. However, when mortgage rates started to rise earlier this year, we saw a drop in demand. The year-to-date data for 2024 is still unfavorable 10 positive prints, 15 negative prints, And two flat printing.

10-year interest rate and mortgage interest rate

The past week was mild with 10-year rates and mortgage rates. There wasn’t much movement as the 10-year yield started the week at 4.24% and ended at 4.24%. Rates for some price metrics went up on Friday afternoon. As we’ve been discussing for a while, the 4.20% level on the 10-year yield is a tough nut to crack, but the recent downward trend in rates is still intact. The chart below closes at 4.17%, but on Friday the 10-year yield ended the week at 4.24%.

Mortgage spreads

Again, the only positive story for interest rates this year is spreads. If spreads did not improve this year, we would have a very different housing story in 2024. However, we could see this story improve even further since they returned. to historical standards. If mortgage spreads were normal today, we would have mortgage rates below 6% without the 10-year rate falling much. Imagine if both coincided!

If we took the worst levels of 2023 spreads and included them today, mortgage rates would be the same 0.52% higher now. While we are far from average in terms of spreads, the fact that we have seen this improvement this year is a plus.

Next week: The home sales report is likely to disappoint

Sales of existing and new homes will be announced this week; both reports would fall short of sales estimates. Lately we’ve seen a drop in mortgage rates and an increase in purchase application data, with four of the last six weeks having positive data. But purchasing apps have a duration of 30-90 days, so this week’s reports will have much higher rates built into them, and we also had two fewer business days in June.

We also have a few bond auctions this week and Fed President Bowman is speaking on Wednesday. She is the Fed’s most hawkish president, so it will be interesting to hear her take a week before the Fed meets.