The number of new listings has reached its peak for 2024: it is the second lowest year on record

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

• 2024: 68,407
• 2023: 61,707
• 2022: 73,462

Weekly home inventory data

On the plus side for 2024, and something I recently discussed on the HousingWire Daily podcast, active inventory is growing and growing nicely. While we are not yet back to normal inventory levels in America, especially given our current population, we are working our way up the ladder.

Since I’m not a mortgage rate lock person, I want to see the stock grow with mortgage rates at these recent high levels. We can’t assume that higher mortgage rates will last forever, so we need to build that inventory cushion while we can. This interim week we did not achieve my target level 11,000-17,000 but the stock grew at a good clip 8,883.

• Weekly inventory change (July 19-26): Inventory increased from 668,363 Unpleasant 677,246
• Same week last year (July 21-27): Stock rose from 480,448 Unpleasant 485,743
• The lowest inventory level of all time was in 2022 240,497
• The annual inventory peak for 2024 is 677,246
• For some context, the active listings for this week in 2015 were 1,207,259

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 U.S. have higher inventories than national data indicates. The only major difference between the 2024 and 2022 data is that in 2022, home sales plummeted throughout the year, and the number of new homes dropped to an all-time low in the second half of the year. Now home sales remain at historically low levels – a big difference.

A few weeks ago I discussed on the HousingWire Daily podcast that price growth rates 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: 36%

Awaiting sales

Below you will find the Altos 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. Purchasing application data tends to be 30-90 day out, and the only time we saw real growth in purchasing apps was in late 2022 and 2023, when rates fell by more than 1%.

• 2024: 381,704
• 2023: 375,995
• 2022: 417,887

Buy application data

Purchase application data has been slow to respond to lower mortgage rates, but four of the last seven weeks have been positive and as crazy as this sounds, that’s the best seven-week period of 2024 so far. There isn’t much going on with purchasing apps and the seasonality ended in May. The only time I’ve seen twelve weeks of positive trend growth was when mortgage rates fell back to 6% in late 2022 and early 2023. Mortgage rates are still higher than those levels.

Since mortgage rates started falling in November 2023, we’ve seen it 16 positive prints, 16 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, 16 negative prints, And two flat printing.

10-year interest rate and mortgage interest rate

I’ve been talking for a while that 10-year yields around this 4.20% level will be a tough nut to crack, and that has proven true once again. It doesn’t seem like we can get any traction above or below here, but the average downside in the bond market is still there as long as the labor data gets weaker. Despite all the progress we’ve made on inflation, the ten-year yield today is still 4.20%. We haven’t seen much movement in interest rates over the past two weeks, but we do have a Fed meeting and jobs week coming up.

Mortgage spreads

Imagine if mortgage spreads had not improved this year, we would have a very different housing story today. If mortgage spreads were normal today, we would have mortgage rates below 6% without the 10-year rate falling much. Imagine if both coincided! However, the fact that we have achieved some improvement I think is a big deal, just as the deterioration in spreads was a negative housing story last year.

If we took the worst levels of 2023 spreads and included them today, mortgage rates would be the same 0.58% 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: Fed Meeting and Jobs Week!

This week is prime time for economic data and the Fed meeting. What more can you ask for when the 10-year yield is at the key level of 4.20%? Not only do we have jobs week and the Fed meeting, we also have home price data, pending home sales, and data from a key Fed wage tracker known as the employment cost index.

On Monday’s podcast I talk about whether the Fed will cut rates this week – listen to find out! I believe the verbiage will be so important now because all the recent labor numbers are getting softer on them. So buckle up, we have a lot of things that can change interest rates in the short term, but more importantly, in the longer term.