Housing Market Tracker: Inventory Shock Lowers

The slow zombie move in housing stocks has diminished as inventories have been negative on a weekly basis last week. Additionally, home loan rates rose to year-to-date highs as labor data remained solid and purchase apps experienced their first negative week after three consecutive weeks of positive growth.

  • Decreased number of weekly active lists 866 House
  • Mortgage rates climbed to year-to-date highs 7.22%
  • Purchased apps decreased by 5% weekly

weekly housing inventory

There was a hat-trick in the housing industry last week. The number of active properties for the week was negative compared to the previous week, the number of new properties was negative compared to the previous week, and the number of active properties and the number of new properties were negative compared to the previous year. This is just a seriously unhealthy housing market, with too many people chasing too few homes.

Weekly effective listing data declined from week to week on rare occasions. We attribute some of this to his 4th of July holiday, but it’s not 100% based on the holiday week, as the trends this year and last year were very different.

  • Weekly inventory fluctuations (June 30-July 7): inventory decreased from the previous year 465,755 To 464,889
  • Same week of the previous year (July 1st to July 8th): In stock 472,046 To 487,319
  • 2022 stock bottom price 240,194
  • So far, stock peaks for 2023 are: 472,688
  • For context, see this week’s active list. 2015 it was 1,197,641

Housing inventory growth has been so slow this year that today’s July active property data is typically no higher than January’s level, which saw the seasonal trough of the first half of the year. As you can see from the chart below, inventory year-over-year has been very slow and is now negative compared to 2022.

Another big story in the housing industry is new-property data hovering at all-time lows over the last 12 months. This is the fourth consecutive week of declines and we are about to face a seasonal decline in this line of data. As you can see below, there is a big difference between his 2023 and 2022 data this week.

  • 2023: 58,813
  • 2022: 90,336
  • 2021: 68,328

10-Year Yield and Mortgage Interest Rates

Mortgage rates this week opened at 7.03% and ended at 7.14%. The U.S. bond market isn’t expecting a job-loss recession anytime soon, and 10-year Treasury yields are nearing year-to-date highs. As you can see below, bond yields rose notably during Jobs Week.

In my 2023 forecast, I said, “If the economy remains strong, the 10-year bond yield should range from 3.21% to 4.25%, equivalent to mortgage rates from 5.75% to 7.25%.” . As long as unemployment claims continue to trend below the four-week moving average of 323,000, the labor market will remain healthy. As you can see below, the 10-Year Bond Yield has a 100% chance of staying in this channel in 2023, while the Mortgage Rate is about to top him above 7.25%.

Since the banking crisis, spreads between 10-year bond yields and mortgage rates have deteriorated, creating more upward pressure on rates than I expected in 2023. The chart below shows spreads rising since the start of the SVB banking crisis. .

Purchase application data

Purchase requisition data was down 5% weekly and year-to-date data was aggregated. 13 positive and 12 minus Print. Starting from November 9, 2022, 20 positive print vs 12 minus Print. Considering that mortgage rates were near or above 7% last month, three of the last four weeks of positives suggests that the 2022 collapse market has certainly changed since Nov. 9. is shown.

But keep in mind that the bar for buying apps is so low that it can trip you up. We are all in the same situation with this year’s data as far as we know the data has just stabilized from a waterfall dive.

Next week is inflation week!

Inflation week is here again and we have two inflation reports to deal with. You should be able to see the same story between the CPI data that matters and the PPI data. The headline inflation data are noticeably lower, but the core inflation data are a little more tenacious. Still, as used-car prices fall over the next few months, the inflationary side of things will become even more of a refuge here. Below is the core CPI data year-over-year.

Given the current state of 10-year yields and mortgage rates, a slower than expected CPI inflation rate this week would be exactly what the housing market needs to lower mortgage rates.

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