Better mortgage distribution stimulates the demand for housing in 2025

Mortgage spreads

Mortgage Spreads the difference between the 10-year-old Treasury revenue and the 30-year mortgage interest rate are a complex subject. In the past decade they have not received much attention because spreads were typical and not concern. Under normal circumstances, the spread usually varies from 1.60% to 1.80%. A historical assessment of these spreads shows that they are currently increased.

If the spreads were just as bad as at the height of 2023, the mortgage interest would currently be 0.75% higher. Conversely, if the spreads return to their normal reach, the mortgage interest would be 0.55% to 0.75% lower than today’s level – that would mean almost 6% mortgage interest.

Before 2025 I was looking for the spreads to improve only 0.27% -0.41% compared to a basic average of 2.54% in 2024. That has not happened this year so far. To improve the spreads in the future, we need the markets to be calm and to get more snacks from the fed in the system.

10-year revenue and mortgage interest

In my forecast of 2025 I expected the following series:

• The mortgage interest is between 5.75% and 7.25%
• The return of 10 years will fluctuate between 3.80% and 4.70%

The 10-year proceeds experienced fluctuations this week and surpassed 4.50% before he comes down again. However, the mortgage interest rate remained relatively stable due to improved mortgage spreads, which help reduce the impact of rising returns. On Friday evening, Moody’s the American debts loweredAs a result, the return of 10 years with a few basic points increases. We will see how the markets respond to this on Monday.

Technically, this downgrade does not change the status of those who keep us treasuries, so many market participants are not worried about it. However, the timing was not ideal, because the Republicans are working on their budget this weekend.

Application -Buy data

The purchase request data last week increased by 18% year after year and came from a 13% on an annual basis last week. Traditionally, I weigh the purchase request data from the second week from January to the first week of May, because the volumes tend to fall after May. So seeing this growth with raised rates is a surprise. We usually see this type of data when the mortgage interest rate moves from 6.64% to 6%. Remember that the details of the purchase application look 30-90 days, so you will not see this in the existing home sales report this week or possibly even next month.

Here are the weekly data for 2025:

• 9 Positive Lectures
• 6 Negative measurements
• 3 PLAT PRINTS
• 15 consecutive weeks of positive data on an annual basis

Total current turnover

The last weekly information about total pending sale of Altos Offers valuable insights into current trends in the demand for homes. Usually a mortgage interest rate is needed to promote real growth in the housing market. Although the total pending housing sales is slightly higher than last year, it is surprising to see that these data remain stable despite increased rates in 2025. Fortunately, the mortgage spreads have improved compared to the high levels that are seen in 2023; Otherwise we would not have this conversation.

Weekly pending the sale of the past week in recent years:

• 2025: 409,896
• 2024: 400.653
• 2023: 387,251

Weekly inventory data

In great news for the housing market in 2024 and 2025 we see an increase in the inventory! It is a positive step to get things back to normal, just as we had before the pandemic. More available houses should help the market work more smoothly in the long term. Let us celebrate this seasonal rise in the inventory as a step in the right direction!

• Weekly stock change (May 9, 16 May): Inventory Rose van 755,895 Unpleasant 767,274
• The same week last year (17 May 17 May): Inventory Rose van 568.557 Unpleasant 578,015
• The soil of all time was in 2022 240,497
• The stock peak before 2025 is 767,274
• For some context were active lists for the same week in 2015 1,124,747

New frame data

Another positive development for 2025 is that new listing data is increasing. Last week we achieved the minimum prediction of 80,000 lists during the seasonal peak period. Although there was a slight decrease last week, it is encouraging to note that both new list data and purchasing applications have risen compared to last year. This has not happened in recent years. We can attribute this growth to the improvements in mortgage spreads.

To give you perspective, during the years of the bubble crash of the house, new entries have been rising between 250,000 and 400,000 a week for many years. The growth we see in new list data only tries to become normal again, whereby the seasonal peaks vary between 80,000 and 110,000 a week. The national new list data for last week in recent years:

• 2025: 76,112
• 2024: 67,530
• 2023: 59.072

Price percentage

In a typical year, about a third of the houses undergo price reductions, which emphasizes the dynamic nature of the housing market. As the stock levels rise and mortgage interest rates increase, many homeowners make adjustments to their selling prices.

In my price forecast of 2025 I expected a modest rise in house prices by around 1.77%. This means another year of a negative real house prices for 2025. What can make my prediction wrong is a decrease in mortgage interest to almost 6%, which can make my prediction too low again. In 2024 my price forecast of 2.33% was incorrect because it was too low, and I lost it when the mortgage interest rate went to 6%.

The rise in price reduction this year compared to the last reinforces the validity of my conservative growth gaming for 2025. Below is a summary of the price reductions of previous weeks in recent years:

• 2025: 37.4%
• 2024: 34%
• 2023: 30%

The coming week: debtendown grade, fed speeches and home sales

We will see how the market will deal with the debtendown grade on Sunday evening and Monday morning, and we will also receive every update about the new budget. We also have many FED presidents this week and we always like to check how the market reacts to their opinion.

We also have both existing and new house sales reports. The existing Home Sales report for April can disappoint the expectation a little and remember the growth we have seen in purchasing apps, recently looks out of 30-90 days. We always keep an eye on the data of unemployed claims, which arrived OK last week.

Hopefully the stock and bond markets will behave this week because the mortgage spreads have improved. With still increased returns of 10 years, the housing market needs these spreads to stay at the Low 2025 levels.