10-year
yield
and
mortgage
rates 

After
the
intense

jobs
week
data,
we
ran
straight
into
CPI
and
PPI
inflation
week,
with
a
Fed
meeting
thrown
in!
I
got
one
good
crumb
from
the
Fed
meeting
that
made
me
smile:
Powell
finally
admitted
that
the
labor
market
isn’t
tight
anymore,
which
is
a
beneficial
statement
for
rates
down
the
line
if
the
labor
data
gets
weaker.
I
discuss
this
in

this
episode
of
the

HousingWire
Daily
podcast.

Last
week
had
softer
inflation
data,
but
I
am
much
more
focused
on
the
weekly
jobless
claims
data
and
jobs
week
data.

The
10-year
yield
closed
last
week
at
4.22%.

Mortgage
spreads

The
spread
between
the
30-year
mortgage
rate
and
the
10-year
yield
has
been
an
issue
since
2022
and
things
got
worse
after
the
March
2023

banking
crisis.
However,
this
year,
spreads
have
improved
despite
being
far
from
ordinary.

If
we
took
the
worst
levels
of
the
spreads
from
2023
and
incorporated
those
today,
mortgage
rates
would
be

0.52%
higher.
While
we
are
far
from
being
average
with
the
spreads,
the
fact
that
we
have
seen
this
improvement
is
a
plus
this
year.

Purchase
application
data

Last
week,
we
had
the
second-best
week-to-week
purchase
application
data
percentage
print
as
mortgage
rates
have
fallen
recently.
Now,
I
caution
everyone
that
we
are
working
from
a
shallow
bar,
so
moving
the
needle
doesn’t
take
much.
However,
you
have
something
if
we
can
string
out
a
few
weeks
like
this.  

Since
November
2023,
when
mortgage
rates

started
to
fall,
we
have
had
13
positive
prints
versus
13
negative
prints
and
two
flat
prints
week-to-week.
Once
mortgage
rates
began
rising
in
2024,
some
demand
was
removed.
As
shown
below,
the
year-to-date
data
isn’t
even
positive
for
2024:
we’ve
had
seven
positive
prints,
13
negative
prints,
and
two
flat
prints.
We
aren’t
getting
any
real
mortgage
demand
growth
with
rates
this
high
and
the
bounces
we
see
in
the
data
are
coming
from
depressed
levels.

Weekly
housing
inventory
data

As
we
head
into
the
summer,
I
still
can’t
express
enough
gratitude
for
the
growth
in

inventory
this
year.
If
mortgage
rates
keep
falling
and
demand
picks
up,
we
will
have
a
much
better
buffer
with
active
inventory
than
in
2022
and
2023.

My
rule
of
thumb
has
been
that
inventory
should
have
some
weekly
prints
between
11,000
-17,000
as
long
as
rates
are
above
7.25%.
We
have
hit
that
three
times
this
year;
last
year
was
a
whopping
zero.
Even
though
the
weekly
inventory
growth
rate
didn’t
hit
that
level,
rates
fell
on
Friday
and
inventory
grew
at
a
healthy
clip
of

8,943.

• Weekly
  inventory
  change
  (June
  7-June
  14):
  Inventory
  rose
  from
  
  611,596
  to
  
  620,539
• The
  same
  week
  last
  year
  (June
  9-June
  16):
  Inventory
  rose
  from
  
  443,749
  to
  
  451,808
• The
  all-time
  inventory
  bottom
  was
  in
  2022
  at
  
  240,194
• This
  week
  is
  the
  inventory
  peak
  for
  2024
  at
  
  620,539
• For
  some
  context,
  active
  listings
  for
  this
  week
  in
  2015
  were
  
  1,174
  446

New
listings
data

Another
positive
story
for
2024
has
been
that
new
listings
data
is
growing
from
the
record-low
levels
we
saw
in
2023.
As
most
sellers
are
buyers,
seeing
more
sellers
listing
their
homes
has
been
good.
The
only
thing
about
2024
was
that
I
was
100%
sure
we
would
see
a
seasonal
peak
print
at
a
minimum
of
80,000
and
it’s
starting
to
look
more
and
more
like
it
won’t
happen
this
year
as
the
seasonal
decline
in
new
listings
isn’t
far
away.

Here
are
the
new
listings
for
last
week
over
the
last
several
years:

• 2024 
  
  71,457
• 2023:
  
  62,187
• 2022:
  
  87,996

Price-cut
percentage

In
an
average
year,
one-third
of
all
homes
take
a

price
cut
—
this
is
standard
housing
activity.
When
mortgage
rates
increase,
demand
falls
and
the
price-cut
percentage
grows.
When
rates
drop
and
demand
improves,
the
price-cut
percentage
can
fall.
This
data
line
is
seasonal,
and
we
have
seen
consistent
year-over-year
price-cut
percentage
growth
since
the
end
of
March. 

As
the
old
stale
data
trickles
in,
we
should
see
a
cooling
down
in
year-over-year
price
growth.
I
recently
discussed
this
in

the
HousingWire
Daily
podcast
and
explained
why
I
believe
this
is
the
case.
Here
are
the
price-cut
percentages
for
last
week
over
the
previous
few
years:

• 2024:
  36%
• 2023:
  31%
• 2022:
  27%

Pending
sales

Below
is
our
weekly
pending
contract
data
on
a
year-over-year
basis
to
show
demand
in
real
time.
With
more
sellers
who
are
buyers,
we
have
a
tad
more
demand
this
year.
If
mortgage
rates
head
lower
and
stay
lower,
this
contract
data
will
grow,
but
we
don’t
see
that
growth
in
mortgage
demand
yet. 

• 2024:
  
  395,960
• 2023:
  
  386,052
• 2022:
  
  452,003

Week
ahead:
Existing
home
sales,
housing
starts,
retail
sales
and
Fed
speeches

This
week,
we
will
get
some
economic
data;
retail
sales
will
be
the
essential
data
line
for
the
Fed.
We
will
also
get
housing
starts
and
it
will
be
interesting
to
see
if
we
continue
the
down
trend
in
single-family
and
multifamily
permits.
Existing
home
sales
will
be
out
on
Friday
and
should
still
trend
near
recent
lows.
However,
this
week,
the
Fed
speeches
will
engage
with
all
the
data
we
have
gathered
recently,
so
we’ll
keep
an
eye
on
that.