Has the spring housing demand already started?

Has the spring home buying season already started? Our weekly pending contract data has been up for a while, even . I believe spring demand actually started in November this year – a trend reflected in the increasing sales data we've seen in winter months in recent years.

However, we have to keep in mind that current home sales data is working off record low sales, so it won't take long to move the needle as it has recently.

Weekly expected sales

The latest weekly pending contract data offers critical insight into real-time trends in housing demand. For some time now, it has been showing positive growth against both 2022 and 2023 data and the first few days of 2025 against 2024 data. We have single-digit growth in demand year over year.

Unfortunately, mortgage rates have risen 1% since September, as around 4.5 million could be printed monthly. When rates fall by more than 1% in late 2022 and 2023, we see demand increase by about 500,000. Now, pending home sales have increased for four months in a row, so we're going to lose the super low bar we've been working towards over time. However, it was good to see demand firming up in the last few months of 2024.

Last week's expected weekly contracts over the past few years:

• 2025: 260,329
• 2024: 247,652
• 2023: 231,127

Buy app data

My rule of thumb: I don't track procurement application data during the last two weeks of the year because very few people go to complete applications during Christmas and New Year's weeks. Also, this year, both Christmas and New Year fell in the middle of the week, which could throw people off their travel plans. Before the last two weeks, we recorded six positive weekly results and four negative results with higher mortgage rates. Although last week was New Year's, we will start tracking purchase application data next week.

10-year income and mortgage interest

I include:

• It is for mortgage interest rates between 7.25%-5.75%
• 10-year yield range of 4.70%-3.80%

Recently, the 10-year yield has been hovering around the key level of 4.60%, showing little meaningful movement in either direction. We are nearing the top of the 2025 10-year income and mortgage rate forecast. Heading into the work week, I wrote about the importance of labor data for mortgage rates in 2025 and .

Mortgage rates briefly stayed above my 7.25% in 2024, but the range stuck for most of the year as mortgage spreads improved.

Mortgage spreads

If mortgage spreads had not improved in 2024, we would have already lost several construction workers due to rising interest rates. However, we should be thankful for it and remain kind.

If we apply the worst-case spread levels to today's rates from 2023, we'll see an additional 0.77% rise in mortgage rates, bringing us closer to 8%. Conversely, if mortgage spreads were typical, we would expect mortgage rates to be around 0.76% to 0.86% lower today.

Weekly housing inventory data

We're heading into 2025, and historically March and April tend to be down, at least after the COVID pandemic. In the last decade before that, we would see the lowest inventory in late January or February, and then the inventory would start to rise. The lowest point for inventory last year was in February, so we'll be watching that closely.

I don't want inventory to bottom out in April because that would be too late in the year.

• Weekly inventory change (December 27 – January 3): Inventory has dropped 650,992 for 635,432
• Same week last year (December 29 – January 5): inventory fell 513,240 for 499,143
• The all-time inventory level was in 2022 240,497
• The inventory for 2024 was the peak 739,434
• For some context, these were the active listings for the same week in 2015 959,028

New announcements

I am very excited about the new list information this year. Last year I expected growth and although we saw growth, it fell short of my target. Still, I was happy to see the growth.

It's important to remember that most sellers are also buyers, and the last two years have posted the lowest new listing data in history. This means that we can look forward to 2025 as the year when things return to normal, and we should expect to see a few weeks in the peak season where new listings reach 80,000-110,000.

Last week was a holiday week, so new listings information was reduced; everything will be back to normal soon. It also explains why people shouldn't take the last two weeks of the year too seriously with purchase application data.

New listing data for the past week over the last few years:

• 2025: 18,484
• 2024: 35,698
• 2023: 31,995

Price discount percentage

In an average year, it is common for about a third of all homes to reflect the normal dynamics of the housing market. Rising mortgage rates often lead to higher interest rates on homes and lower house prices. On the other hand, when mortgage rates fall, we usually see an increase in demand, which often stabilizes or even increases because we have recently experienced falling rates.

There is a seasonal dip in this data line and we will monitor this closely for any changes in the data.

• 2025: 34.9%
• 2024: 33%
• 2023: 36%

The week ahead: Business week, bond auctions and Fed speeches

It's going to be a busy week ahead! We have a week of work that includes four jobs reports, plus bond auctions, Global PMI data, the release of Fed minutes, and speeches from some hawkish Fed presidents. Given that we are at a key level in the bond market, this week could be wild. As always, we'll be tracking jobless claims data every Thursday. It went down again last week.

Close this week; It's the first week of 2025 and it's shaping up to be another year of drama.

Related