Frankly,
however,
the
biggest
surprise
at
the
moment
might
be
that
sales
volumes
have
held
up
pretty
well
over
the
past
few
weeks
even
as
mortgage
rates
have
climbed
into
the
mid-7s.
We’ve
been
talking
about
sales
growth
over
the
past
year.
More
home
sales
are
happening,
but
we
can
also
see
—
once
adjusted
for
seasonal
patterns
—
that
sales
should
be
much
higher
now
if
a
real
market
recovery
were
underway. 

It
feels
like
the
latest
macro
trends
will
keep
mortgage
rates
in
the
mid-7%
range
for
the
near
term.
And
we’d
expect
that
to
slow
home
sales
further.
That’s
why


Altos
Research
tracks
every
home
for
sale
in
the
country
each
week.
The
data
so
often
defies
expectations
or
changes
very
quickly.
Let’s
dig
further
into
the
details
of
the
U.S.
housing
market
for
the
week
of
April
22. 

Housing
inventory

When
we
look
at
the
active
inventory
of
unsold
homes
on
the
market,
we
can
definitely
see
the
impact
of
higher
mortgage
rates
in
the
past
month.
There
are
543,000
single-family
homes
on
the
market
now.
That’s
a
3%
jump
from
last
week
and
31%
above
year-ago
levels.

The
available
inventory
of
unsold
homes
on
the
market
is
building
quickly
due
to
the
most
recent
mortgage
rate
jumps.
There
are
130,000
more
homes
on
the
market
now
than
last
year
at
this
time. 

Normally,
inventory
is
climbing
at
this
point
in
the
second
quarter.
We’re
rapidly
approaching
the
peak
of
the
market
in
terms
of
seller
listings,
and
as
inventory
builds,
the
sales
rate
will
peak
by
the
end
of
June.
So,
it’s
normal
that
inventory
is
growing
now.

But
when
you
add
a
spike
in
mortgage
rates
that
makes
homebuying
less
affordable,
that
leads
to
fewer
buyers
and
inventory
grows.
Altos
data
currently
shows
an
inflection
point
in
April.
With
the
most
recent
mortgage
rate
jump,
inventory
growth
has
also
accelerated.

This
is
what
is
meant
when
we
say
that
higher
rates
leads
to
higher
inventory.
We
are
on
the
path
back
to
the
formerly
normal
levels
of
unsold
homes
on
the
market.
A
couple
more
years
with
elevated
rates
will
get
us
there. 

But
it’s
also
noteworthy
to
point
out
that
falling
rates
reverse
this
trend.
Lower
rates
mean
that
people
snap
up
the
existing
inventory.

New
listings

Growing
inventory
is
not
just
about
slowing
demand.
We
are
also
consistently
measuring
more
sellers
coming
back
into
the
market.
At
69,000
new
listings
unsold
today,
that’s
3%
more
than
a
week
ago
and
14%
more
than
this
time
last
year.

In
fact,
there
are
more
new
sellers
this
week
than
in
any
week
of
2023.
This
selling
season
still
has
two
more
months
of
growth
potential.
Industry
professionals
would
love
to
see
70,000
or
80,000
new
listings
per
week
in
May.
More
sellers
means
more
sales
can
happen.
There’s
a
limit,
of
course,
as
we
could
eventually
reach
an
imbalance
if
too
many
sellers
flood
the
market
and
too
few
buyers
follow
suit.
But
we’re
not
close
to
that
yet.

In
the
years
before
the

COVID-19
pandemic,
the
latter
half
of
April
would
normally
see
80,000
to
100,000
new
listings
in
a
week.
Now
we’re
at
69,000.
Obviously,
elevated
mortgage
rates
slows
both
buyer
and
seller
activity.
There
are
a
lot
of
people
who
will
never
sell
their
house
with
a
3%
mortgage.

There’s
unlikely
to
be
a
flood
of
sellers
in
the
next
few
years,
but
we
can
see
steady
growth.
Each
year
with
higher
rates
will
create
more
inventory
growth
and
have
fewer
people
locked
into
low
rates.
That
growth
is
good
for
the
market. 

The
available
inventory
of
homes
to
buy
and
the
new
ones
being
listed
for
sale
each
week
are
what
consumers
care
about.
If
I’m
buying
a
house,
do
I
have
any
houses
to
buy?
For
homebuyers,
the
selection
they
have
now
is
the
most
they’ve
had
in
years. 

Real
estate
professionals,
on
the
other
hand,
have
to
care
about
transaction
volume.
How
many
home
sales
are
happening?
Because
there
were
so
few
sellers
last
year,
the
number
of
sales
was
quite
constricted.
That’s
starting
to
change.
The
14%
increase
in
new
listings
over
the
past
year
is
a
really
good
sign
that
sales
can
grow.

Pending
sales

When
we
look
at
the
sales
rate,
we
can
indeed
see
that
home
sales
are
growing.
There
were
71,000
new
contracts
started
for
single-family
homes
this
week.
That’s
3%
more
than
last
week
and
7%
more
than
a
year
ago.

There
are
still
8%
fewer
sales
happening
each
week
than
in
2022.
At
that
time
two
years
ago,
there
were
frantic
last-minute
deals
getting
done
as
mortgage
rates
were
rising
quickly.
So,
even
though
rates
were
up
back
then,
sales
were
still
strong.

But
the
hectic
pandemic-era
pace
of
sales
had
slowed,
so
inventory
was
building
quickly.
In
2022,
the
new
sales
rates
really
cratered
after
the
Fourth
of
July
holiday.

There
are
now
385,000
single-family
homes
under
contract.
That’s
5%
growth
compared
to
this
time
last
year
but
is
still 14%
less
than
two
years
ago.
New
sales
started
this
week
saw
7%
growth
while
the
total
number
of
homes
under
contract
saw
5%
growth.

It
takes
30
to
40
days
for
the
typical
sale
to
close.
The
homes
under
contract
now
will
mostly
close
in
April
and
May. 
The
5%
annualized
growth
rate
is
less
than
we’d
hoped
for
at
the
start
of
the
year,
but
it’s
creeping
up
even
with
higher
mortgage
rates.

Altos
Research
uses
direct
measurement
rather
than
seasonally
adjusting
its
numbers.
There
are
385,000
single-family
homes
in
escrow
to
complete
a
sale
as
of
today.
If
you
were
to
approximate
a
seasonal
adjustment
on
this
number,
you
would
see
a
yearly
sales
pace
of
about
4.4
million
units
for
April
2024.
That
pace
is
up
from
April
2023,
but
it
is
still
running
slower
than
the
typical
April.
The
seasonal
pace
is
where
one
can
observe
the
slowdown
due
higher
mortgage
rates.

The
takeaway
from
the
weekly
new
pending
sales
data
is
that
even
though
sales
continue
to
outpace
last
year,
that
growth
has
definitely
slowed.

Home
prices

The
median
price
of
single-family
homes
under
contract
is
now
$398,000.
That
jumped
by
2.4%
jump
this
week
and
is,
in
fact,
a
new
all-time-high,
surpassing
the
sale
prices
of
two
years
ago.

These
spring
weeks
are
indeed
the
time
when
home
prices
climb,
so
it’s
not
too
surprising
that
this
trend
is
occurring
now.
But
we’ve
also
been
keeping
a
close
eye
on
home
prices
in
the
face
of
these
rising
mortgage
rates. 

The
prices
of
the
homes
going
under
contract
are
6%
more
expensive
than
one
year
ago.
Last
year
at
this
time,
home
prices
were
lower
than
in
April
2022.
But
we’re
now
back
at
all-time
highs.
The
previous
peak
was
$395,000
two
years
ago.

One
thing
of
interest
in
the
price
data
is
how
slow
this
climb
has
been.
Compared
to
Jan.
1,
2024,
prices
are
up
6.6%.
In
most
years,
the
increase
is
closer
to
10%
by
this
time
in
April.
So,
as
a
leading
indicator
for
how
the
year
ends
up,
this
price
signal
is
much
softer
than
usual. 

We
can
also
see
this
in
asking
prices.
The
median
price
for
all
homes
currently
on
the
market
is
$449,000.
That’s
up
a
fraction
from
last
week
and
only
1%
above
last
year
at
this
time.

Asking
prices
can
be
thought
of
as
a
leading
indicator
for
future
sales
prices.
Homes
that
are
on
the
market
now
will
get
offers
in
May,
close
in
June
and
will
be
reported
on
in
July.
So,
the
future
signals
for
home
prices
aren’t
falling
because
of
higher
mortgage
rates,
but
it
certainly
looks
like
price
appreciation
has
slowed.

Price
reductions

Another
strong
leading
indicator
for
future
home
sale
prices
is
the
share
of
homes
on
the
market
with
price
reductions.
If
more
sellers
have
to
cut
their
prices
now,
that’s
a
real
signal
for
sales
that
will
happen
in
the
future.

Surprisingly,
given
the
mortgage
rate
changes,
there
is
no
jump
yet
in
the
share
of
price
reductions.
We’ve
been
watching
this
stat
closely. 

This
week,
32%
of
the
homes
on
the
market
have
taken
a
price
cut.
That’s
actually
down
a
fraction
from
last
week,
given
a
relatively
strong
set
of
new
listings
that
hit
the
market
and
the
fact
that
home
sales
are
at
their
highest
point
of
the
year. Fresh
inventory
doesn’t
take
a
price
cut
until
after
it
sits
for
a
while
without
an
offer.

There
are
3%
more
homes
with
price
reductions
today
than
a
year
ago.
Last
year
at
this
time,
price
cuts
were
still
decreasing
with
very
tight
volumes
of
new
listings.
There
are
more
homes
on
the
market
now
with
price
cuts
than
in
any
April
on
record.
That
shows
weakness
in
prices,
but
it’s
not
a
super
high
number
and
it’s
not
skyrocketing,
so
that
implies
we
won’t
see
prices
tanking
anytime
soon. 

The
takeaway
here
is
that
with
the
30-year
fixed
mortgage
at
7.4%,
there
is
still
just
enough
sales
volume
to
keep
home
prices
from
dropping
like
they
did
in
late
2022.
The
current
market
is
not
changing
nearly
that
quickly.
We’ll
continue
to
watch
data
on
price
cuts.
As
mortgage
rates
make
homes
less
affordable,
fewer
offers
will
be
made
and
some
sellers
will
cut
their
prices.
That
could
accelerate
in
the
next
few
weeks.