As we start a new year, the housing market landscape is constantly evolving. Over the last couple of years, we have witnessed fluctuating mortgage rates and shifting demands. The current scenario sees mortgage rates surpassing 7% in the second week of January, contrasting with the previously observed rates creeping towards 6%. Despite this, the year-over-year data still exhibits some positivity.
Weekly Pending Contracts and Purchase Application Data
The statistics from previous years showcase a clear trend in weekly pending contracts:
2025: 252,586 contracts
2024: 250,621 contracts
2023: 231,674 contracts
Purchase application data always plays a crucial role in understanding market trends. During the early months of 2024, when mortgage rates varied between 6.75% to 7.50%, the purchase application data displayed:
14 negative prints
2 flat prints
2 positive prints
As we closely monitor the current mortgage rates approaching the levels seen in 2024, it is imperative to assess the foreseeable trends in the market.
10-Year Yield and Mortgage Rates
For the year 2025, the forecast estimates a range for mortgage rates between 7.25%-5.75% and for the 10-year yield between 4.70%-3.80%. Recent data indicates a surprising rise in the 10-year yield, surpassing even the forecasted peak values. The mortgage rates, however, are marginally lower than expected for this year. This occurrence mirrors the situation from the previous year, underlining the impact of economic factors on the mortgage market.
To sustain the upward trajectory of mortgage rates, the labor market must consistently outperform expectations, particularly given the current precarious state of the housing sector.
Mortgage Spreads
While current mortgage rates present a challenge for the housing market, the comparison with past data reveals a nuanced perspective. Analyzing spread levels from previous years offers insights into potential scenarios. The forecast for 2025 anticipates a noteworthy improvement in spreads, with the aim of enhancing market stability and willingness to invest.
Weekly Housing Inventory Data
The housing inventory scenario in 2025 depicts a favorable trend compared to prior years. The key question remains about the possible seasonal pattern and the expected surge in inventory during spring. Recent inventory data sheds light on the evolving market dynamics, indicating the need for a careful analysis of market trends.
This year’s inventory changes closely mirror historical patterns, paving the way for a potentially robust market trajectory in the coming months.
New Listings and Price-Cut Percentage
The optimistic outlook for 2025 includes potential growth in new listings data compared to the preceding year. Understanding the historical context of new listings data offers valuable perspectives on market conditions and growth potential.
Similarly, monitoring price cut percentages and inventory trends is essential to gauge the market vitality and investor confidence in the housing sector.
The Week Ahead: Inflation Week!
With the upcoming focus on inflation and its implications, along with critical data points like retail sales and housing starts, the housing market is headed towards a pivotal phase. The Federal Reserve’s stance on rising yields and its impact on market dynamics will play a crucial role in shaping the future trajectory of the housing market.
In conclusion, amidst the evolving market conditions and economic complexities, a vigilant approach is necessary to navigate the housing market landscape effectively. Stay tuned for more insights and analysis in our weekly Housing Market Tracker articles.
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