10-year
yield
and
mortgage
rates

There
is
nothing
good
to
report
on
mortgage
rates
from
last
week.
The
chart
below
shows
that
we
broke
the
critical
technical
level
on
the
10-year
yield
(marked
with
a
red
line).
The
CPI
data,
which
the

Federal
Reserve
doesn’t
track
for
its
2%
target,
came
in
0.1%
hotter
than
estimates,
but
that
was
good
enough
to
take
one
mortgage
rate
cut
off
the
table
for
now. I
talked
about
this
last
week
on
the

HousingWire
Daily
podcast.

Now
that
this
technical
level
has
been
broken,
2024
is
going
to
be
a
lot
more
interesting,
something
I
discussed
in
an
interview
with

Yahoo
Finance.
 

Now,
with
the
specter
of
a
wider
war
in
the
Middle
East
as

Iran
launches
strikes
against
Israel,
what
will
the
bond
market
do?
Some
will
say
that
bonds
rallied
ahead
of
the
pending
war
news
on
Friday,
but
we
will
get
a
better
answer
Sunday
night
with
bond
market
trading.

One
positive
thing
for
mortgage
rates
is
that
spreads
between
the
30-year
mortgage
and
the
10-year
yield
are
improving.
I
believe
these
spreads
became
one
of
the
bigger
mortgage
stories,
as
the

banking
crisis
sent
the
spreads
to
new
cycle
highs.
This
data
line
is
improving
and
for
now,
it
mitigates
the
damage
done
by
the
higher
10-year
yield.

Of
course,
if
the
spreads
get
better
from
here
and
bond
yields
fall
again,
then
mortgage
rates
can
act
much
better
on
the
downside.
This
is
something
to
watch
for
in
the
future.

Things
are
hapenning
fast
with
mortgage
rates,
which
is
why
I
update
HousingWire’s

Mortgage
Rate
Center
page
with
analysis
every
weekday
morning
— looking
at
how
the
bond
market
reacts
to
economic
data
or
an
event
that
can
move
rates.

Weekly
housing
inventory
data

Usually,
I
would
jump
for
joy
at
last
week’s
inventory
growth.
However,
last
week’s
numbers
don’t
get
a
passing
grade:
The
rebound
impact
of
Easter
boosted
last
week’s
inventory
data,
just
like
it
caused
the
inventory
data
to
decline
in
the
previous
week.

One
item
to
note
for
this
year
is
the
year-over-year
comparisons
on
active
inventory.
Inventory
bottomed
out
on
April
14
last
year,
which
was
the
longest
time
it
took
for
the
housing
market
to
find
a
seasonal
bottom
ever.
From
now
to
the
end
of
the
year,
the
easy
comps
to
show
inventory
growth
are
over.
It
will
get
more
challenging
to
show
more
growth
unless
inventory
starts
to
pick
up,
especially
toward
the
end
of
2024.
However,
with
higher
mortgage
rates,
we
should
see
more
inventory
growth.

• Weekly
  inventory
  change
  (April
  5-12):
  Inventory
  rose
  from
  
  512,930
  to
  
  526,462
• The
  same
  week
  last
  year
  (April
  7-14):
  Inventory
  fell
  from
  
  411,577
  to
  
  406,600
• The
  all-time
  inventory
  bottom
  was
  in
  2022
  at
  
  240,194
• The
  inventory
  peak
  for
  2023
  was
  
  569,898
• For
  some
  context,
  active
  listings
  for
  this
  week
  in
  
  2015
  were
  
  1,042,221

New
listings
data

It’s
the
same
story
with
the
new
listing
data;
we
got
a
nice
snap-back
from
Easter.
I
am
a
big
fan
of
the
inventory
growing
year
over
year
based
on
new
listing
data,
and
this
is
a
big
plus
for
the
housing
market.
I
had
anticipated
more
growth,
but
as
long
as
we
are
showing
some
growth
this
year,
I
will
take
that
as
a
victory.
Last
year,
it
was

savagely
unhealthy
that
new
listings
data
was
trending
at
the
lowest
recorded
levels. 

• 2024:
  
  66,786
• 2023:
  
  48,556
• 2022:
  
  67,229

Price-cut
percentage

In
an
average
year,
one-third
of
all
homes
take
a
price
cut;
this
is
standard
housing
activity.
When
mortgage
rates
increase,
demand
falls
and
the
price-cut
percentage
grows.
That
percentage
falls
when
rates
drop
and
demand
improves.

This
price-cut
data
line
is
critical
to
track
now
as
inventory
growth
picks
up
for
spring
and
mortgage
rates
have
increased
since
the
start
of
the
year. Higher
mortgage
rates
mean
higher
inventory
growth
and
more
price
cuts,
which
keeps
the
model
simple.

Here
is
the
price-cut
percentage
for
last
week
over
the
last
several
years:

• 
  2024:
  32.1%
• 
  2023:
  29.8%
• 
  2022:
  18.8%

Purchase
application
data

Purchase
applications
dropped
last
week,
down
5%
week
to
week,
but
they
showed
a
significant
23%
decline
year
over
year.
The
Easter
holiday
year-over-year
comps
have
played
a
bit
into
this
data
line.
We
saw
an
excellent
rebound
in
our
pending
contracts
data
last
week
and
the
inventory
growth
data
from
week
to
week.
Now
that
Easter
is
out
of
the
mix,
we
can
move
ahead
on
the
week-to-week
and
year-over-year
data
with
some
more
clarity. 

Since
November
2023,
when
mortgage
rates
started
to
fall,
we
have
had

10
positive
prints
versus

seven
negative
prints
and

two
flat
prints
week-to-week.
Year
to
date,
we
have
had

four
positive
prints,

seven
negative
prints,
and

two
flat
prints.

The
week
ahead:
War,
retail
sales
and
housing
data

Do
mortgage
rates
move
with
war
news?
Yes,
they
often
do.
Some
speculate
that
in
a
war,
money
goes
into
the
bond
market
as
a
flight
to
safety,
pushing
rates
lower.
However,
war
can
also
lead
to
higher
inflation
and
higher
mortgage
rates. I
discussed
the
economics
of
conflicts
tied
to
mortgage
rates
as
a
premise
for
double-digit
mortgage
rates
on

this
recent
HousingWire
Daily
podcast.

This
week,
we
will
see
how
the
bond
and
stock
markets
react
to
the
news
from
the
Middle
East.
We
will
also
get
retail
sales
numbers,
which
have
been
holding
up
better
than
most
had
anticipated
for
some
time
now.
Also,
we’ll
get
a
ton
of
housing
data,
including
the
builders
confidence,
housing
starts
and
existing
home
sales.