What
will
happen
to
home
sales?

The
upward
movement
serves
as
a
bucket
of
cold
water
for
a

housing
market
that
has
had
a
relatively
healthy
level
of
activity
at
the
start
of
the
spring
purchase
season.

Altos
data

released
Monday
showed
that
weekly
pending
single-family
home
sales
rose
slightly
compared
to
year-ago
levels
as
the
inventory
of
unsold
homes
for
sale
grew
by
17,000.
This
prompted
Altos
President
Mike
Simonsen
to
write
that
the
“base
case
for
April,
May
and
June
this
year
is
that
we
should
continue
to
see
home
sales
gains
versus
2024.
There
is
more
supply
now
and
it’s
slightly
cheaper
to
buy.”

HousingWire
Lead
Analyst
Logan
Mohtashami
also
presented
a

relatively
rosy
forecast
in
his
weekly
housing
tracker
data
released
Saturday.
Purchase
mortgage
application
volume
dropped
by
5%
during
the
past
week
but
remains
13%
higher
on
a
yearly
basis.
The
mortgage
market
has
seen
seven
positive
application
prints
in
the
first
13
weeks
of
the
year.

Mohtashami
noted
that
the
spread
between
10-year
Treasury
yields
and
30-year
mortgage
rates
—
which
currently
sits
at
2.45%
—
remains
elevated
from
the
historic
averages
of
1.6%
to
1.8%.
But
the
figure
is
also
much
lower
compared
to
the
early
months
of
2023
when
the

regional
banking
crisis
rattled
the
nation.

“It’s
understandable
to
feel
concerned,
especially
considering
that
if
spreads
were
as
unfavorable
as
they
were
in
2023,
we
could
be
facing
mortgage
rates
close
to
8%,”
Mohtashami
wrote.
“This
situation
would
have
made
it
incredibly
difficult
for
anyone
looking
to
buy
a
home,
or
sell
and
buy
a
house.”

Trump-Powell
showdown

The
main
driver
of
the
surge
in
mortgage
rates
appears
to
be
the
heated
public
battle
between
President

Donald
Trump
and

Federal
Reserve
Chair

Jerome
Powell.

Trump
has

renewed
his
attacks
on
Powell
over
the
past
week
as
he
seeks
to
pressure
the
Fed
into
lowering
benchmark
interest
rates.
Investors
have
responded
with
a

stock
selloff
that
has
wiped
out
trillions
of
dollars
in
value.
Treasury
yields
have
moved
higher
and
so
have
mortgage
rates.

The
president’s
remarks
cut
against
the
longstanding
notion
of
Fed
independence
from
executive
branch
influence.
Powell
has
said
in
the
past
that
he
doesn’t
believe
Trump
has
the
authority
to
fire
him,
but
a
pending

Supreme
Court
case
involving
two
recently
fired
federal
agency
board
members
could

reshape
legal
precedent
if
the
justices
rule
in
favor
of
the
president.

The
Wall
Street
Journal
editorial
board

noted
this
week
that
even
if
Trump
successfully
fired
Powell,
he
would
still
have
to
contend
with
the
other
members
of
the

Federal
Open
Market

Committee
who’ve
been
closely
aligned
on
interest
rate
policy.

Powell’s
current
term
as
Fed
chair
ends
in
May
2026.
Reports
have
emerged
that
his
successor
—
either
sooner
or
later
—
could
be

former
Fed
governor
Kevin
Warsh.
Trump
had
reportedly
considered
Warsh
for
the
role
of
Treasury
secretary
before
selecting
Scott
Bessent,
and
Warsh
was
also
a
candidate
to
lead
the
Fed
during
Trump’s
first
term.

Lock-in
effect
loosens
grip

The

U.S.
Census
Bureau
and

U.S.
Department
of
Housing
and
Urban
Development
will
release

new-home
sales
figures
for
March
on
Wednesday.
This
data
doesn’t
include
the
full
impact
of
President
Trump’s
global

tariff
policies,
which
weren’t
implemented
until

April
2
and
have
been

paused
in
many
cases.

In
February,
new-home
sales
rose
1.8%
from
the
prior
month
and
5.2%
from
a
year
ago.
But
housing
market
observers
expected
tariffs
to
stall
progress
in
the
coming
months.

Similar
patterns
may
emerge
for

existing-home
sales,
as
the

National
Association
of
Realtors
(NAR)
will
release
its
data
for
March
on
Thursday.

February
sales
were
positive,
up
4.2%
from
the
prior
month
for
an
annualized
rate
of
4.26
million.
But
they
remain
down
1.2%
compared
to
February
2024,
when
mortgage
rates
were
higher
than
they
are
today.

First
American’s
forecast
calls
for
an
increase
in
existing-home
sales
that
would
push
them
above
the
pace
of
March
2024.
In
written
commentary,
deputy
chief
economist
Odeta
Kushi
said
that
housing
remains
“handcuffed,”
but
there
is
good
news
as
the
persistent
mortgage
rate
lock-in
effect
is
easing.

Kushi
cited

Federal
Housing
Finance
Agency
data
showing
that
the
share
of
outstanding
mortgages
with
rates
below
6%
has
decreased
from
93%
in
second-quarter
2022
to
82%
in
fourth-quarter
2024.

The
average
interest
rate
on
outstanding
mortgage
debt
at
the
end
of
last
year
was
4.3%,
or
2.3
percentage
points
lower
than
the
prevailing
mortgage
rate
of
6.6%.
That
translates
to
a
difference
of
roughly
$400
in
the
monthly
payment
on
a
median-priced
existing
home
—
still
a
significant
barrier
to
many
prospective
homebuyers
but
much
smaller
than
the
gap
of
roughly
$700
per
month
at
the
end
of
2023.

“The
rate
lock-in
effect
will
continue
to
limit
housing
market
potential,
but
it
has
loosened
enough
for
some
potential
sellers
to
list
their
homes
for
sale
and
contribute
to
higher
for-sale
inventory
and
more
sales
activity,”
Kushi
said.