After
years
of
identifying
the
housing
market
as
unhealthy
—
culminating
in
a

savagely
unhealthy
housing
market
in
early
2022
—
I
can
confidently
assert
that
the
housing
market
in
2024
and
2025
is
on
better
footing.
This
transformation
sets
an
extremely
positive
foundation
for
what’s
to
come.
Some
recent
headlines
about
housing
suggest
that
demand
is
crashing.
However,
that’s
not
the
case,
as
the
data
below
will
show.

Today
on


CNBC,
I
discussed
this
very
point:
what
is
happening
now
is
not
only
in
line
with
my
price
forecasts
for
2024
and
2025,
but
it’s
why
I
am
so
happy
to
see
inventory
grow
and
price
growth
data
cool
down.
What
we
saw
in
late
2020,
all
of
2021
and
early
2022
was
not
sustainable
and
we
needed
higher

mortgage
rates
to
cool
things
down
—
hence
why
I
was
team
higher
rates
early
in
2021.
The
last
two
years
have
ushered
in
a
healthier
market
for
the
future
of
existing
home
sales.

Existing
home
sales

Before
the

existing
home
sales
report
was
released
Thursday,
I
confidently
predicted
a
month-to-month
decline,
while
estimating
the
existing
home
sales
print
to
be
just
a
tad
above
4
million.
That’s
precisely
what
occurred
—
no
surprises
there,
as
every
month
in
2025
has
consistently
exceeded
4
million.
However,
it’s
important
to
note
that
our
weekly
pending
home
sales
data
has
only
recently
begun
to
show
growth
compared
to
last
year.
We
have
an
advantage
over
the
data
from
the

National
Association
of
Realtors
since
our
weekly
pending
home
sales
data
is
updated
weekly,
making
their
report
somewhat
outdated.

The
notable
surprise
for
me
in
2025
is
the
year-over-year
growth
we
observe
in
the
data,
despite
elevated
mortgage
rates.
If
mortgage
rates
were
ranging
between
6%-6.64%,
I
wouldn’t
have
been
surprised
at
all
because
we
are
working
from
the
lowest
bar
in
sales
ever.

Purchase
application
data

If
someone
had
said
the
purchase
application
data
would
show
positive
trends
both
year
to
date
and
year
over
year
by
late
April,
even
with
mortgage
rates
not
falling
significantly
below
6.64%,
I
would
have
found
that
hard
to
believe.
Yet,
here
we
are
witnessing

consistent
year-over-year
growth.
Even
with
the
recent
rate
spike,
which
has
clearly
cooled
demand
week
to
week,
we
are
still
positive. If
mortgage
rates
can
just
trend
down
toward
6%
with
duration,
sales
are
growing.

Housing
inventory
and
price
growth

While
my
forecast
for
national
price
growth
in
2024
at
2.33%
was
too
low
and
in
2025
at
1.77%
may
be
too
low
again,
it’s
encouraging
to
see
a
slowdown
in
price
growth,
which
I
believe
is
a
positive
sign
for
the
future.
The
increase
in

inventory
is
also
promising
and
supports
long-term
stability
in
the
housing
market.

We
can
anticipate
that
millions
of
people
will
continue
to
buy
homes
each
year,
and
projections
suggest
that
we’re
on
track
for
another
nearly
5
million
total
home
sales
in
2025.
As
wages
rise
and
households
are
formed,
such
as
through
marriage
and
bringing
in
dual
incomes,
this
influx
of
inventory
returning
to
normal
levels
provides
an
optimistic
outlook.
This
trend
in
inventory
data
is
truly
heartening.

Conclusion

With
all
the
data
lines
I
added
above,
you
can
see
why
I
have
a
renewed
optimism
about
the
housing
market.
If
price
growth
significantly
outpaced
inflation
and
wages,
and
inventory
wasn’t
increasing,
I’d
be
discussing
a
much
different
and
more
concerning
state
of
affairs.
Thankfully,
that’s
not
the
case.

Historically,
we’ve
observed
that
when
home
sales
dip
due
to
higher
rates,
they
may
remain
subdued
for
a
while
but
ultimately
rise
again.
This
is
common
during
recessions,
as
I
discussed
in
this
recent

HousingWire
Daily
podcast.
As
you
can
see
in
the
existing
home
sales
data
below,
we
had
an
epic
crash
in
sales
in
2022
but
found
a
base
to
work
from
around
4
million.

This
trend
has
shaped
the
landscape
of
housing
economics
since
post-WWII,
reminding
us
that
resilience
and
recovery
are
always
within
reach.