Why are home prices holding steady despite high rates?

If you want to see sales growth with a bit of a kick, you need mortgage rates under 6% to term, but I'm not going in that direction until the labor market breaks or spreads are available as I can't predict those levels yet. the better. I talked about it recently. This is something to consider in the future. Every year wages rise, more households are formed, and mortgage rates fall, another positive demand curve over 12 weeks should produce a data line. However, if mortgage rates can remain between 5.75% and 6.25% for 12 months, it could sustain higher sales levels than we have seen since late 2022.

Buy app data

Last week was a positive 5% print week-over-week and up 10% year-over-year. Keep in mind, however, that October had a shallow streak, so take the entire month of positive year-over-year growth with some context. If I take October, which is positive every week, we averaged 7.4% growth from last year.

Let's see how this data line is moving this year.

When mortgage rates were higher at the beginning of the year (6.75-7.50%), purchase application data looked like this:

• 14 negative prints
• 2 flat print
• 2 positive prints

As mortgage rates begin to fall in mid-June, purchase applications look like this:

• 12 positive prints
• 5 negative prints
• 1 flat print
• 3 straight positive growth tracks year over year

As mortgage rates rise again, here we are:

• 2 negative prints
• 1 positive weekly print

Here we can see a clear positive, forward-looking data line with mortgage rates heading towards 6%, and now that's twice since the end of 2022, where demand has improved for more than 12 weeks. Last week I talked about the latest data being different. But it is not only the demand, but also the price.

Pricing information

As for the information about the price reduction, many fake housing experts took information from other sources and did not know how to explain it properly. By the way, this was one of the most fun things to watch in 2024. They misread the percentage of price reductions and rising inventory data to suggest that national home prices should fall sharply this year. But we've never had a proper deep negative price curve data line this year, and now it's November.

However, with mortgage rates heading toward 6% this year, rate cuts have allowed interest rates to come in lower than 2022 and 2023 data earlier this year. Nothing too dramatic here, but as you can see from the expected contact data, we have a rate variable that can change the data line even incrementally.

There was multi-year housing data from the early to mid-1980s and mid-1990s, and even from 2000 to 2005, where we saw inventory rising. and sale. You can have increased inventory, increased sales, and increased prices. Markdown percentage data is very important if you know how to read it correctly, and as you can see below, markdown percentage data has slowed down recently.

Surprisingly, our weekly new expected price median data has strengthened even in a seasonally soft price period, especially now with higher inventory data. As you can see below, there is a clear deviation from the 2022 and 2023 data. So my 2.33% forecast for 2024 and house price growth is at risk. It wouldn't take a rocket scientist to guess what the data line would indicate if mortgage rates stayed close to 6%.

Weekly data lines

I'm focusing on deviation data in this weekend tracker, which is different from what we usually do; this is a quick overview of the traditional information we display.

Weekly housing stock decreased slightly. This is a back-to-back week of a small decrease in inventory. We've seen good growth in active listing data this year, so for those of you who thought inventory couldn't grow at higher rates, 2024 has changed your mind.

Inventory dropped 736,014 for 735,718.

New listing information has increased slightly from this week 60,066 for 60,819.

So far, the positive story for 2024 is the increase in inventory. I wanted it to be in 2023, but it's too late to make material changes. However, for 2024, we saw inventory growth and no new serious inventory data from 2024 new inventory data. Compare the following to give you some perspective on what the new featured listings look like. 60,819 New roster data this week versus what we've seen this years:

• 2009: 280,400
• 2010: 353,457
• 2011: 352,030

As I often say, we had different credit markets back then, so stop dancing with the nightmare.

10-year income and mortgage interest

I include:

• It is for mortgage interest rates between 7.25%-5.75%
• 10-year yield range of 4.25%-3.21%

I'll keep it as simple as possible. I've been talking about this 4.40% line in the sand on the 10-year yield for a while now. If this level is higher, we have broken the downtrend in the 10-year yield at 5% starting on October 16, 2023. We've got a lot going on this week, so let's check it out. If you're confused about bond market action on Jobs Friday, check out my take on it.

Mortgage spreads

Mortgage spreads had a good day on Friday, preventing rates from deteriorating. However, the bigger story was that spreads that improved this year were positive for housing. If there were no progress this year, rates could be higher not just today, but all year. Spreads have gotten worse recently, but are still better than last year.

Next week: All bets are off

Between the election and this week's Fed meeting, all bets are off that everything will be normal. I will be there three times this week to explain what happened. Monday's podcast will try to explain what's going on with 10-year yields and mortgage rates.

The 4.40% level is key for bond yields this week; closing above that level and getting a follow-up bond sale could spell trouble for housing. However, try to ignore the intraday moves – they can be wild near critical technical levels. Good luck to everyone this week.