Weekly home inventory data
Housing inventory is now in the traditional seasonal slump for December, but the inventory growth story, which I was pleased to see earlier this year, has changed a lot in recent months. The latest stock growth rate has now fallen to 13.54%, which is still positive, but not as strong as the 30%+ growth we saw earlier this year.
A few things here: We had more sellers more likely to become buyers in 2025 as purchase request data consistently showed positive year-over-year growth. And for the first time in many years, our new advertising data returned to the low levels we would consider normal. However, mortgage rates did not fall below 6.64% until the second half of 2025.
Growth in new listings peaked at the end of May; Some sellers simply stopped selling, and mortgage demand and sales picked up again. In fact, the latest report on existing home sales was at a nine-month high. If you’re operating from the lowest revenue ever, once you adjust to the population, it doesn’t take much to move the needle. So that’s the simplest answer for housing. This may also explain why the S&P Cotality Case-Shiller home price indices for national, 10-city and 20-city composite, prices have only increased slightly month over month.
- Weekly Inventory Change: (December 12-19): Inventory has decreased from 775,339 Unpleasant 757.76
- Same week last year: (December 13 – December 20): Stock fell from 682,152 Unpleasant 667,417
New advertising data
New listings are also experiencing the traditional seasonal decline. I was very excited earlier this year when my prediction for weekly new listings – above 80,000 – finally came true. However, we didn’t see much growth after May, and now the seasonal slump has arrived. I would love to see a trend of new ad data between 80,000 and 100,000 during each peak season period each year, which would be normal pre-COVID from 2013 to 2019.
To give you another perspective, during the years of the housing bubble crash, the number of new homes rose between 250,000 and 400,000 per week for years. Here is the new advertising data from the past two years:
- 2025: 38,260
- 2024: 39,260
Price reduction percentage
In an average year, about a third of homes experience price reductions, which underlines the dynamic nature of the housing market. Many homeowners are adjusting their sales prices as inventory levels rise and mortgage rates remain high. The growth rate of price reductions cooled earlier this year and is now also experiencing a seasonal decline.
For my Price prediction 2025I expected a modest increase in house prices of 1.77%, and it looks like we will end the year at that level. The seasonal price cut rate slump has arrived as we prepare for 2026. Last week’s price cut rates over the past two years:
Mortgage interest rates, spreads and the 10-year interest rate
In my forecast for 2025 I expected the following margins:
- Mortgage interest between 5.75% and 7.25%
- The 10-year interest rate fluctuates between 3.80% and 4.70%
For the year, the 10-year yield ranged from 3.87% (this was Sunday evening trading with an index of 3.87%) to a high of 4.79%. Mortgage interest rates ranged from 6.12% to 7.26%. Everything seems fine to me, given that the bond market preferred weaker labor market data to picking up inflation. Since the beginning of September, we have been stuck between 3.95% and 4.20% for the ten-year interest rate, and between 6.12% and 6.36% for the mortgage interest rate.
Mortgage interest rates fluctuated between 6.29% and 6.22% per month last week Mortgage news daily. PollyData, which tracks locked loans across all credit profiles, shows interest rates at 6.37%.
Mortgage spreads (the hero of housing construction in 2025!)
For 2025, I was looking for an improvement in mortgage spreads of 0.27%-0.41%, with an average of 2.54% for 2024, and this week the data was better than that, with an improvement of 0.49%.
In recent history, mortgage spreads have fluctuated between 1.60% and 1.80%. If current spreads were as bad as they were at the 2023 high, mortgage rates would be roughly 1.05% higher, at 7.30%. Conversely, if spreads return to their normal range, mortgage rates would be 0.45% to 0.25% lower than current levels, meaning they would be 5.80% to 6.00%.
The improvement in spreads is a huge win for the housing market, because we are closer to normal levels and we can still benefit from spreads a little more in 2026.
Mortgage purchase application details
Mortgage purchase application data is a forward-looking indicator as it typically takes about 30 to 90 days for purchasing apps to lead to home sales. In some cases it can be even longer, as most sellers are also home buyers and it depends on how long it takes to sell and buy their next home.
The key to buying apps is having positive week-over-week and year-over-year growth data, which we’ve seen over the past 19 weeks. We are now at a multi-year high through 2026. We really need 12 to 14 weeks of positive week-to-week data to have anything of value and now we are close to that.
- 11 positive prints from week to week
- 9 negative prints from week to week
- 20 weeks of double-digit year-over-year growth
Total weekly pending home sales
Our overall weekly data on pending home sales has improved, especially compared to 2023 and 2022, and remains slightly higher than 2024, when numbers were tougher. As with much of our data, it is very seasonal and the holidays are approaching. Here are the weekly pending home sales for the past week over the past four years:
- 2025: 296,525
- 2024: 293,258
- 2023: 267,033
- 2022: 263,937
Next week: a lot of bond auctions and new home sales
It’s Christmas week and we’ll have a bunch of bond auctions, plus data on new home sales, durable goods, inflation, industrial production, weekly unemployment claims, and the weekly ADP data. It can be a funky bond trading week with so many government bonds coming up and the holidays, so take this week’s market reaction with a grain of salt and make sure you enjoy Christmas and the holidays.
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