Weekly
housing
inventory
data

One
of
my
concerns
with
higher
rates
has
been
whether
new
listings
data
would
take
another 
leg
lower,
which
wouldn’t
be
a
good
thing
for
the

housing
market.
Not
only
has
that
not
happened,
but
we
have
had
an
orderly
seasonal
decline
this
year
—
outside
some
wild
swings
around
Labor
Day
and
schools
starting.

This
proves
that
we
are
trying
to
form
a
historical
bottom
in
this
data
line,
something
I
discussed
earlier
in
the
year
on


CNBC.
As
we
can
see
in
the
chart
below,
it
is
very
steady,
considering
how
crazy
rates
have
been
lately.

One
of
the
things
I
have
gotten
wrong
in
2023
is
my
premise
that
if
mortgage
rates
rose,
the
inventory
growth
would
pick
up
for
a
few
weeks,
at
least
between

11,000-17,000.
However,
even
with
8%
mortgage
rates
last
week,
I
am
still
batting
a
zero
in
2023
as
inventory
growth
last
week
was
just

7,900.

Last
year,
the
seasonal
peak
for
inventory
was
Oct.
28.
Last
week,
according
to

Altos
Research:

• 
  Weekly
  inventory
  change
  (Oct.
  13-Oct.
  20):
  Inventory
  rose
  from
  
  546,450
  to
  
  554,350
• Same
  week
  last
  year
  (Oct.
  14-Oct.
  21):
  Inventory
  rose
  from
  
  567,452
  to
  
  571,944
• The
  inventory
  bottom
  for
  2022
  was
  
  240,194
• The
  inventory
  peak
  for
  2023
  so
  far
  is
  
  554,350
• For
  context,
  active
  listings
  for
  this
  week
  in
  
  2015
  were
  
  1,171,430

Traditionally,
one-third
of
all
homes
have
price
cuts
all
year
long.
When
rates
rise
and
demand
gets
weaker,
the
price
cut
percentage
can
grow.
The
price
cut
percentage
in
2023
is
still
4%
below
what
we
had
in
2022,
even
with
higher
home
prices
and
mortgage
rates.
Price
cut
percentages
in
recent
years:

• 2023
  
  38.5%
• 2022
  
  42.5%
• 2021
  
  28%

Mortgage
rates
and
the
10-year
yield

The
bond
market
and
mortgage
rates
have
had
such
a
wild
ride
recently,
and
it
reminds
me
of
the
action
during
the
first
week
of
COVID-19
when
we
saw
massive
volume
in
buying
treasuries.
In
the
same
vein,
the
bond
market
is
now
very
oversold.
However,
more
importantly,
real
yields
are
very
restrictive
for
the
economy
now.
In
the
last
week,
the
10-year
yield
went
from

4.62%
to

4.99%,
ending
at

4.92%. 

I
recently
discussed
on
the

HousingWire
Daily
podcast
whether
these
rates
are
recessionary
because
the
history
of
real
yields
being
this
restrictive
has
always
led
to
a
recession.
Earlier
in
the
year
on

CNBC
I
said
that
the
Fed
wouldn’t
be
satisfied
until
the
labor
market
breaks.
Even
though
the
Fed
has
talked
about

no
more
rate
hikes,
now
that
the
10-year
yield
and
mortgage
rates
are
higher,
they
believe
the
monetary
policy
is
restrictive
enough
to
accomplish
the
goal
they
always
wanted
from
the
start:
attack
the
labor
supply.

Mortgage
rates
went
from

7.66%
to

8.03%
last
week
to
end
at

7.97%.
If
the
Fed
wants
to
create
a
job-loss
recession,
attacking
the
housing
market
a
second
time
looks
like
their
target.
They

remain
frustrated
that
the
labor
market
is
not
breaking.

Purchase
application
data

Purchase
application
data
was
down 6%
 last
week
versus
the
previous
week,
making
the
year-to-date
count

18
positive
prints,

21
negative
prints
and
one
flat
week.
If
we
start
from

Nov.
9,
2022,
it’s
been

25
positive
prints
versus

21
negative
prints
and
one
flat
week.

Of
course,
higher
rates
have
made
affordability
worse;
whenever
rates
move
up
or
down
by
just
one
1%,
millions
of
potential
homebuyers
are
qualified
or
not
qualified
to
buy
a
home.

The
week
ahead:
Home
sales
data
and
jobless
claims

Next
week,
we
have
new
home
sales
and
pending
home
sales
—
which
are
at
significant
risk
of
a
big
miss.
Jobless
claims,
of
course,
come
out
every
Thursday
and
that
has
been
the
key
data
line
for
me
at
this
expansion
stage.
Also,
there
are
many
variables
worldwide,
and
who
knows
what
the
Fed
will
say.
We
will
be
tracking
all
the
live
data
to
keep
you
updated.