Purchase application data
Last year, when mortgage interest rates fell, 7.37% to 5.99%We had three months of strong purchase application data through the first week of February before mortgage rates started rising in February. 6%-8%. We’re working from historically low levels and it doesn’t take much to move the needle, so we’ll be updating our weekly You need to focus on data.
so far, back to back positive print, And the year-on-year rate of decline is at the lowest level throughout the year. However, this is because year-over-year comps are very easy. Let’s see how this plays out in the critical period from the second week of January 2024 to his first week of May. Remember that application data is predicted 30 to 90 days before sales data arrives.
Purchase requisition data increased by 3% vs. Last week, we did a tally from the beginning of the year to today. 20 positive prints, 23 negative prints, And one flat week.
Mortgage interest rate and 10-year yield
10-year bond yields hit high 4.69% to the lowest 4.38% Last week, mortgage rates fell from their all-time highs. 7.58% to the lowest 7.36%. More importantly, the CPI data was revealed and it appears that it may have put the final nail in the coffin. federal reserve As for rate hikes, the market is currently pricing in several rate cuts in 2023, as inflation growth has slowed enough.
Still, current 10-year Treasury yields and mortgage rates are higher than last year, and inflation growth is lower than peak inflation growth in 2022. I talked about how far mortgage interest rates could fall in the future. this recent podcast. As I have emphasized, if the market believes the Fed is done raising rates, history has shown that the next big move will be lower bond yields and mortgage rates.
Weekly housing inventory data
I believe that higher interest rates increase housing stock, and I expected that to happen once mortgage rates rose above this level. 7.25% There are still a few more weeks left this year. 11,000～17,000 Growth, but not much.i failed 100% Time so far.
Normally, stocks would have entered a seasonal decline by now, but recently rising interest rates have accelerated inventory growth. So higher interest rates helped, but not enough for my liking. Mortgage interest rates are falling, so if they continue to fall, it will be something to consider next year. That’s because assuming the economy is still expanding, that traditionally means inventory data will be flat.
According to last year, Altos Researchthe seasonal peak in housing inventory was October 28th.
- Weekly inventory changes (11/10~11/17): Inventory has increased 566,941 to 569,898
- Same week last year (November 11th to November 18th): Inventory decreased compared to the previous year 572,347 to 569,571
- The bottom price of inventory in 2022 is 240,194
- So far, the inventory peaks for 2023 are: 569,898
- Check out this week’s active list for context. 2015 was 1,120,115
One positive story for 2023 inventories is that no matter how high mortgage rates rise, they did not create new lows, while new listing data is hovering at all-time lows. is. Despite the noticeable weekly decline, the number of new listings is positive year over year and remains at an all-time low. We talked about how new listing data is forming a bottom. CNBC recently.
Traditionally, one-third of all homes have their prices reduced before they go on sale. When mortgage rates rise and demand falls, the percentage of homes that are priced out typically increases. This is why it’s so strange that even though home prices and interest rates have been rising recently, they can’t keep up with the declines in 2022, when home prices were falling month by month this year. .
Despite mortgage rates reaching 8%, they remain consistently 4% below last year’s reduction levels. If mortgage rates drop further over the next six months, this data line could be exciting heading into spring 2024.
- 2023: 39%
- 2022: 43%
- 2021: 28%
The week ahead: Leading Economic Indicators and Existing Home Sales
Although this week is Thanksgiving and a holiday, important economic indicators will be released: the Leading Economic Index and the Existing Home Sales Report. If mortgage rates rise as much as this report suggests, the monthly housing supply should also increase. People will wait and see how Black Friday sales go, but Black Friday doesn’t mean the same thing it did 30 years ago. It will be interesting to see if the bond market and mortgage rates become volatile during the week when holiday trading is light.