Looking forward, however, purchasing applications have just had their best eight weeks of the year and this data line usually only reflects 30-90 days later in the sales data. So we can still see a growth in the existing home sales as the year progresses.
We really need 12-14 weeks of consistently positive weekly purchase request data to be a equipment event and in the past eight weeks we have seven positive and only one negative, marked eight consecutive weeks with double digits on an annual basis. If we can strant four to six weeks more of positive purchasing apps, we can see some growth from these low levels.
Existing home sales
By Nonsense: Total sale of the existing home for August:
- 0.2% decrease in the total sale of existing home, month-over month to a seasonal annual percentage of 4.0 million.
- 1.8% increase in sales on an annual basis.
“The sale of home has been slow in recent years due to increased mortgage interest and limited inventory,” said Nar Chief Economist Lawrence Yun. “However, the mortgage interest rate is falling and there will be more inventory on the market, which should stimulate sales in the coming months.”
Earlier this year I said that if the sale of houses remains stable at around 4 million, we will still see a growth of year-on-year despite increased mortgage interest, because our housing market tracker data indicate that a slight increase on an annual basis. It will be interesting to observe how the rest of the year unfolds, especially because the comparisons for November and December will be more challenging. These results are reported in December and January. For now, however, turnover this year is better done than last year at the moment with a growth of 1.8% on an annual basis.
Home inventory
Inventory in August:
- 1.53 million units: Total home inventory by 1.3% decrease from July and an increase of 11.7% from August 2024 (1.37 million).
- 4.6 months delivery of unsold inventory, no change compared to July and an increase of 4.2 months in August 2024.
The inventory of the house has somewhat taken with the NAR data and we may have already reached 1.55 million this year, as reported by the NAR. The growth of the inventory is one of the best stories in 2025 for the US economy.
With our own Housing Wire data about the inventory, however, we have seen that the housing stock growth delays since mid-June, while still showing a profit on an annual basis. In recent months we have ran from 33% growth on an annual basis to 20%.
Yet the most striking aspect of the housing market has been the increase in the inventory, because price growth has cooled and now has an increase of only 2.2%. Historically, normal stock levels vary between 2 million to 2.5 million. (For context, in 2007, the inventory peaked at 4 million.) If the current stock levels remain between 1.52 million and 1.93 million, discussions with regard to low inventory will become less relevant, because sufficient delivery will be available in the market.
Conclusion
It has been a good week for housing data, with purchase apps, new housing sales that beat the expectations of the home, year-on-year growth in existing home sales and inventory year after year. Given the real negative view of the housing data early in the year, things have improved. When the mortgage interest rate falls below 6.64% and goes to 6%, the change in housing dynamics and 2025 is now the third time since the end of 2022 that we have seen this happen.
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