If we had experienced the worst mortgage spreads in 2023, the mortgage interest rate would be 0.72% higher today. On the other hand, with regular mortgage spreads, the mortgage interest rate would currently be 0.68% to 0.78% lower. If we return to typical spreads, many housing problems can be solved because the sale of houses could grow with mortgage interest almost 6% and remain stable for some time.
This year, however, the mortgage spreads are getting better, which means that the damage caused by higher bond returns compared to the 2023 market. Although this is not the big price that people want, it appears that the mortgage interest would be much worse if the spreads do not improve in 2024 and 2025.
10-year revenue and mortgage interest
In my forecast of 2025 I expect the following series:
- The mortgage interest is between 5.75% and 7.25%.
- The return of 10 years will fluctuate between 3.80% and 4.70%.
Last week the 10-year yield closed at around 4.49%. We observed a bounce after the job report, which showed positive results and revisions for previous months. I discussed this report here in more detail.
As I said before, the damage to the mortgage interest rate is becoming less and less when the return of 10 years increases because the spreads tend to take these days. This is the biggest reason why the mortgage interest rate this year has not become more than 7.25%, although the return of 10 years this year has increased than in 2024. This is a positive story for 2025 because the mortgage interest could be worse.
Application -Buy data
While we start the year, the data application data has shown a mild positive trend, despite increased mortgage interest. Here is a summary of the recent data:
- 2 positive lectures
- 1 flat lecture
- 1 negative reading
Last week the weekly data fell from 4% from week to week, but an increase of 0.2% year after year. Historically, the mortgage interest rate, the details of the purchase application, reflect the tendency to display negative trends. Last year, when the mortgage interest ranged between 6.75% and 7.50%, the purchase request data showed 14 negative measurements, two positive measurements and two flat measurements.
We will keep a close eye on the data in February and we will discuss these and other economic topics in the home with our large Housing Economic Top 26 February in Dallas.
Weekly pending sales
The last weekly current contract details of Altos Research Offers valuable insights into current trends in the demand for homes. This dataset has shown a remarkable improvement since the summer of 2024 and by the end of the year it showed growth on an annual basis. However, because the mortgage interest rate started to rise late in 2024 and will continue to be increased by 2025, the year after year a small decrease has facilitated where we had grown. We still show higher growth compared to 2023 levels, but not much.
Weekly current contracts for the past week in recent years:
- 2025: 288,605
- 2024: 297,402
- 2023: 283,689
Weekly inventory data
The highlight of 2024 for me was the growth in the home inventory when we started to return to normal levels. Inventaris makes a strong effort to recover after the challenges of the past five years, even with record-bearing sales. We saw a decline last week, which is not unusual for this time of the year. However, we strive to identify the lowest point in the seasonal stock data and anticipate the usual annual increase that we usually experience.
- Weekly inventory change (January 31, 7-Febaal): The inventory fell from 634,979 Unpleasant 632,367
- The same week last year (2 February 9 February): The inventory fell from 497,347 Unpleasant 494,819
- The soil of all time was in 2022 240,497
- The stock peak before 2024 was 739,434
- For some context were active lists for the same week in 2015 947,864
New frame data
Our new listing data from Altos Research reflects houses that come on the market without an immediate contract, which gives us a real -time picture of every sales pressure in the market. The two lowest new list data in history were the two lowest new list.
Last year I predicted that we would get at least 80,000 a week during the seasonal peak months, but it didn’t happen. This year I think we should hit that goal. Last week was slightly lower than what I was looking for, which can endanger my call. I don’t see a big extra sales pressure in the data early on; Between 2013 and 2019 between the seasonal peak weeks between the seasonal peak weeks was between 2013 and 2019.
NOTE: During the house bubble crash years this data line ran between 250,000-400,000 a week.
The new listing details for last week in recent years:
- 2025: 53,863
- 2024: 51,874
- 2023: 44,533
Price percentage
In an average year, about a third of all houses usually experience a price reduction, which reflects the usual dynamics of the housing market. Last year I had a low prediction, with only 2.33% nominal price growth, which turned out to be too low.
Before 2025 I predict a growth of 1.77%, indicating another year of negative growth in house prices. As the inventory increases and the mortgage interest rate remains above 7%, the price growth is expected to cool. I acknowledge that I was mistaken last year, partly because the mortgage interest rate fell to 6% for a short time. However, the delay in price growth is a positive development for the housing market, which desperately needs this.
Price reduction percentages for last week in recent years:
- 2025: 33.15%
- 2024: 31%
- 2023: 33%
The coming week: Inflation week
This week is our traditional inflation week, but with a turn: certain members of the Federal Reserve Seems more confidence in the disinflation trend in rental prices, which significantly influences the data of the Consumer Price Index (CPI). However, this trust does not extend so much to the inflation data of the producer Price Index (PPI) or the personal consumption issues (PCE). We will test this assumption.
In addition, a few FED presidents will speak this week, and bond auctions are planned, together with retail data released on Friday. As always, unemployed claims will be our focus on Thursday morning.
This week we will probably see more headline drama with regard to mutual rates, and I will discuss how the market responds, as I did here.
