Purchase application data
Last week, mortgage rates hit their lowest point of the year, leading to significant improvements in the purchase application data. In 2024, we faced challenges as mortgage rates increased, but in 2025, the trends have been more favorable. Weekly data for 2025 shows positive readings outnumbering negative and flat prints, with encouraging year-over-year growth. Despite mortgage rates remaining above 6.64%, we have seen a 9% year-over-year increase in purchase applications. This positive trend is expected to continue as long as mortgage rates trend towards 6%.
Weekly total pending sales
The latest data on weekly total pending contracts from Altos Research indicates positive year-over-year growth in housing demand. Despite mortgage rates hovering above 6.64%, we are seeing positive trends in pending sales data. Weekly pending contracts for 2025 have shown an increase compared to previous years, indicating a positive shift in the market.
10-year yield and mortgage rates
In the 2025 forecast, mortgage rates are expected to range between 5.75% and 7.25%, while the 10-year yield will fluctuate between 3.80% and 4.70%. Recent market volatility, influenced by tariff developments, has led to fluctuations in both the 10-year yield and mortgage rates. However, positive labor reports have contributed to reaching year-to-date lows in mortgage rates.
Mortgage spreads
Despite recent market volatility, mortgage spreads have shown positive trends. While last week saw less favorable spreads, mortgage rates have reached year-to-date lows. The growth in mortgage spreads has influenced the current rate environment, with rates potentially reaching significant milestones if spreads were more typical.
Weekly housing inventory data
Inventory growth in the housing market has been a highlight in 2024 and 2025. While not yet at normal levels, progress has been made, with a recent week showing a solid increase in inventory. This growth in inventory levels is a positive sign for the market.
New listings data
New listings in the housing market are showing positive trends, with the number of listings increasing compared to previous years. This shift towards more listings reflects a positive trend in the market as it moves towards a more balanced state.
Price-cut percentage
The proportion of homes experiencing price reductions has increased in the current market environment, influenced by rising inventory levels and mortgage rates. This trend suggests a modest increase in home prices for 2025, with a focus on maintaining stability in the market.
The week ahead: Nothing matters until markets calm down
This week’s focus is on CPI and PPI inflation data, along with monitoring Federal Reserve speeches. Market stability is crucial in current volatile conditions, with a need to restore balance to credit markets for meaningful impact on data trends.