If we take the worst spread rates from 2023 and put them in today, loan rates would be 0.59% currently high. Although we are still far from measuring and spreading, the fact that we have seen this improvement adds up this year.
In line with my 2024 forecast, I never target mortgage rates in my forecast; I only work with 10-year yields. Also, the spread was raised in 2023, so they’ve had room to go down, which they don’t have. However, the big move has already happened without a rate cut, meaning you’ll need more help to get mortgage rates below 5.75%.
Buy app data
With mortgage rates down more than 1% recently, we’ll draw a line in the sand at that point and track purchase application data throughout the year. For the last 13 weeks, the purchase request data has eight are negative and five are negative prints. Last week, weekly app purchases grew by 3%. Yes, shopping apps have had a great move at lower prices, folks. Now, the year-on-year decline came to 4%, which is the lowest decline since 2022; this is mainly due to the lowest bar ever.
As mortgage rates started to fall in November 2023, weekly mortgage application data shows 20 positive prints, 18 negative prints, and two flat prints. As we can see from the data, not much is happening. However, if mortgage rates can get below 6% and stay there, we should see growth similar to builders’ purchase demand data, which has fared better than the current home sales market.
Weekly housing inventory data
As mortgage rates have fallen, asset growth has slowed, and the season will soon begin. Last week, we had the Labor Day holiday, so take the inventory drop in that context. For me, the best story of 2024 was the overall growth of the American stock market, and there was no housing bubble crash.
- Weekly inventory changes (Aug. 30-Sept. 6): Inventory decreased from 704,335 to 703,646
- In the same week last year (Sept. 1-Sept. 7): Inventory increased from 509,562 to 509,892
- The all-time inventory low was in 2022 240,497
- The annual peak value of 2024 was there 704,744
- In another context, this week’s active listings in 2015 were available 1,195,353
New listing data
One of the positive data lines this year is that we have seen growth in new inventory data, as 2023 was the lowest ever. Even though 2024 will be the second lowest year ever, it is still good that we have growth this year. I didn’t get my minimum average weekly new listings during the annual peak of 80,000. I was almost 5,000, but still, 2024 is a good year in my new listing book.
- 2024: 61,599
- 2023: 49,661
- 2022: 58,004
Discount percentages
In an average year, one-third of all households reduce prices – this is a common real estate activity. The increase in mortgage rates last year and this year has led to an increasing rate of discounting, especially with rising assets. This data line has just dropped with falling rates. Also, the season and the withdrawals are kicking into gear now.
A few months ago, on the HousingWire Daily podcast, I discussed that price growth data will cool in the second half of the year. Here are the last week’s price reduction percentages over the last few years:
- 2024: 39.8%
- 2023: 36%
- 2022: 40%
Weekly pending sales
Below is Altos weekly pending contract data to show real-time demand. We see a seasonal decline in the data line but we have some growth year over year. Just remember, last year at this time, mortgage rates started to rise to 8% so let’s all take the better year-over-year data for some context.
- 2024: 358,670
- 2023: 348,317
- 2022: 390,543
Next week: Inflation week
Inflation week doesn’t have the same value as it used to, but it’s always something we need to keep an eye on, especially when other Fed presidents talk about rising inflation in the last few months of the year.
Just remember, the year-over-year data is off because of last year’s low reading base results, so the Fed is focusing on month-to-month numbers now. We also have some bond auctions, bad claims data, and a used car price index coming out this week. However, I want to see how the bond market reacts after last week’s jobs data is digested.
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