Last
year,
when
mortgage
rates
fell
from
8%
to
the
mid-6%
level,
we
saw
demand
pick
up,
but
it
wasn’t
spectacular.
However,
lower
rates
did
push
home
sales
to
grow
by
a
combined
500,000
in
two
months
earlier
this
year.
So,
starting
this
week,
I
will
see
if
we
can
get
a
traditional
seasonal
run
in
purchase
apps
earlier
than
average.

This
week,
purchase
apps
were
up
2%
weekly
and
1%
year
over
year.
The
shallow
bar
in
year-over-year
data
from
rates
headed
toward
8%
last
year
is
now
officially
over.

When
mortgage
rates
were
running
higher
earlier
in
the
year
(between
6.75%-7.50%),
this
is
what
the
purchase
application
data
looked
like:

• 14
  negative
  prints
• 2
  flat
  prints
• 2
  positive
  prints

When
mortgage
rates
started
falling
in
mid-June,
here’s
what
purchase
applications
looked
like:

• 12
  positive
  prints 
• 5
  negative
  prints
• 1
  flat
  print
• 3
  straight
  positive
  year-over-year
  growth
  prints

With
mortgage
rates
up
again,
here
is
where
we
are:

• 3
  negative
  prints
• 2
  positive
  weekly
  prints
• 5
  straight
  weeks
  of
  positive
  year-over-year
  data,
  but
  the
  bar
  is
  low
  for
  this. 

Weekly
pending
sales

Below
is
the

Altos
Research
weekly
pending
contract
data
to
show
real-time
demand.
This
data
line
is
very
seasonal,
as
seen
in
the
chart
below.
Even
with
elevated
mortgage
rates,
this
data
line
still
shows
steady
year-over-year
growth.
Remember
that
the
second
half
of
2022
had
the
biggest
crash
in
home
sales
ever,
and
last
year
rates
headed

toward
8%
late
in
the
year.
Even
so,
it’s
nice
to
see
this
data
line
continue
to
show
growth
year
over
year.

Weekly
housing
inventory
data

Two
weeks
ago,
housing
inventory
fell
a
bit
more
than
I
anticipated
and
so
did
the
new
listings
data.
I
assumed
that
maybe
the
election
held
some
people
back
from
listing
their
homes.
With
that
assumption,
I
anticipated
a
bigger
snap
back
in
inventory
last
week,
looking
for
numbers
between
4,500-4,800,
but
it
turned
out
to
be
less
than
1,000.

If
you
want
to
know
why
inventory
data
looks
a
little
different
now
(and
want
to
answer
your 
Uncle
Dave
at
Thanksgiving,
who
only
reads
the
headlines
and
says
it’s
housing
2008
all
over
again), this
article is
for
you.

• Weekly
  inventory
  change
  (Nov.
  8-Nov.
  15):
  Inventory
  rose
  from
  
  721,576
  to
  
  722,032
• The
  same
  week
  last
  year
  (Nov.
  10-Nov.
  17):
  Inventory
  rose
  from
  
  566,882
  to
  
  569,898
• The
  all-time
  inventory
  bottom
  was
  in
  2022
  at
  240,497
• The
  inventory
  peak
  for
  2024
  so
  far
  is
  739,434
• For
  some
  context,
  active
  listings
  for
  this
  week
  in
  2015
  were
  1,135,684

New
listings
data

I
thought
new
listings
data
would
show
more
growth
last
week
than
we
got,
but
that
didn’t
happen
either;
we
are
also
in
the
seasonal
decline
here.
Still,
it
is
a
big
positive
for
the
housing
market
that
we’ve
seen
growth
in
2024,
but
context
is
critical
since
it’s
the
second-lowest
year
ever. 

• 2024:
  51,832
• 2023:
  48,610
• 2022:
  46,916

Price-cut
percentage

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

price
cut
—
this
is
standard
housing
activity.
When
mortgage
rates
rise,
the
price-cut
percentage
grows.
When
rates
go
lower
and
demand
picks
up,
this
data
line
can
cool
down,
as
it
has
recently. 

Here
are
the
price-cut
percentages
for
last
week
over
the
previous
few
years:

• 2024:
  38.8%
• 2023:
  39%
• 2022:
  43%

The
week
ahead:
Housing
data
and
the
Fed’s
Austan
Goolsbee

The
critical
data
for
next
week
is
the
housing
data;
the
builder’s
confidence
and
housing
starts
data
are
essential
to
my
economic
cycle
work.
Housing
permits
and
starts
are
already
at
early
COVID-19
recession
levels,
and
we
are
working
through
the
backlog
of
orders.
So,
this
week,
I
want
to
see
how
the
builders
feel
about
higher
mortgage
rates
because,
according
to
my
economic
models,
when
residential
construction
workers
start
losing
their
jobs,
the
recession
isn’t
far
away.
This
is
something
I
brought
up
on


CNBC
recently.
I
also
recently
discussed
what
to
expect
for
housing
in
2025
on
the

Top
of
Mind
podcast
with
Mike
Simonsen.

This
week
I
will
also
be
watching
what
Chicago
Fed
President
Austan
Goolsbee
has
to
say;
he
is
probably
the
most
dovish
of
all
the
Fed
presidents,
even
questioning
why
long-term
rates
are
rising.
Stay
tuned.