Weekly home sales appear to be stronger than normal, but there’s a catch

We need to take these factors into account when looking at last week’s data. Pending home sales did recover last week, but not to the exact levels the data seems to show. The same goes for our new advertising data and inventory data. Let’s see.

Weekly ongoing sales

Last week’s existing home sales report showed another increase in year-over-year demand, up 4.1%.

This is something I talked about months ago: if the revenue trend remains steady around 4 million – given the low bar in 2025 – we should see many more months of growth. The months of June through October, with reports coming out in July through November, should be positive year over year as early forward-looking housing data was better than last year. This happened and now we have another month of low COMPs left.

However, our weekly sales data started showing growth in May; it will take 30-60 days for this to be reflected in the existing home sales market. It’s not significant growth, but growth nonetheless.

Our weekly pending sales are up, but probably not by much:

• 2025: 67,757
• 2024: 58,966

As you can see below, our new advertising data saw a larger increase than normal, which is unusual for this time of year. This will normalize in the coming week. It’s important to remember that most home sellers are also buyers. I was encouraged to see the recent stabilization in this data line, but the spike here was anomalous, similar to the weekly ongoing home sales data.

Our markdown rates have stabilized in recent months and have recently decreased slightly. In fact, it is currently below the level we saw in 2022. Last week we saw a slight dip in the data, but I’m also a little aware of this data.

Hopefully we can achieve some normalization in the data this week; we’ve had enough drama with the government shutdown.

Buy application data

We tested housing data for twelve weeks with mortgage rates below 6.64%, which has been the most important level in the past. Over the last twelve weeks, we’ve had seven positive prints, five negative prints, and twelve consecutive weeks of double-digit year-over-year growth in purchasing apps.

I’d like to see at least 12 to 14 weeks of positive weekly purchasing data to say this trend is material, but it’s still been the best 12 weeks of the year. However, in recent weeks, week-on-week data has been negative. I answered the question of whether the government shutdown caused this this episode from the HousingWire Daily podcast.

Here are the weekly data for 2025 so far:

• 19 positive measurements
• 16 negative measurements
• 6 flat prints
• 38 consecutive weeks of positive data on an annual basis
• 25 consecutive weeks of double-digit growth, year after year

Weekly home inventory data

My first reaction when housing inventory hit a new annual high in these numbers was a giant leap of joy, as I didn’t think it peaked in the first week of August. I have been consistently wrong in my call that we should see a new annual high in the stock. Stock growth has slowed significantly lately, but I wasn’t ready to call the top yet. However, I’m not sure I can declare victory yet due to this week’s data outages.

Be that as it may, inventory growth peaked at 33% early this year and has now fallen to 17.92%. According to our data, the seasonal decline should start soon.

• Weekly Inventory Change (October 17 – October 24): Inventory increased from 859,419 Unpleasant 867,811
• Same week last year (October 18 – October 25): Stock fell from 739,401 Unpleasant 735,961

Mortgage interest and the 10-year interest rate

In my forecast for 2025 I expected the following margins:

• Mortgage interest between 5.75% and 7.25%
• The 10-year interest rate fluctuates between 3.80% and 4.70%

Well, we had CPI week. It wasn’t really a story with the 10-year yield because we had a small range last week and not much movement because we don’t have all the data due to the government shutdown.

However, looking to 2025, we are only near the bottom because labor data has become weaker; without it, mortgage rates and 10-year rates would be higher today. Mortgage rates ended the week at 6.19% Mortgage news dailyand the Polly Rate Lock data has rates of 6.30%. I’ve gotten close to the bottom of my range for 10-year rates and mortgage rates again, so it will be a long time before I fall below my forecast, I think.

Mortgage spreads

Mortgage spreads were the best story for mortgage rates in 2025. At one point this year we were just 0.35% off normal spread levels, reaching 0.2% below my 2025 peak improvement forecast for mortgage spreads. So much of the good news is priced in here.

Historically, mortgage spreads have fluctuated between 1.60% and 1.80%. If current spreads were as bad as they were at the 2023 peak, mortgage rates would be 0.91% higher. Conversely, if spreads returned to their normal range, mortgage rates would be 0.59% to 0.39% lower than current levels. Normal spreads would mean mortgage rates today are 5.60% to 5.80%.

Upcoming week: Fed week, bond auctions, pending home sales, Fed speeches and home prices

This week we have a lot of economic news! It’s Fed Week and the Fed will cut rates, but the verbiage Fed Chairman Jerome Powell is using is critical. Powell normally makes a very aggressive statement when ten-year yields are so low, so everyone should take that into account.

We have some big bond auctions this week, along with speeches from the Fed. The ongoing home sales data could also be interesting because if the government shutdown slows down closings, you’ll see it here.

The house price indexes will also be published this week. Please note that these reports are a few months behind schedule. The market shift in prices has been noted by the NAR reports as the average sales price index has increased a bit over the past two months, so we should have a little more fun during Halloween week.