CHM Blog

The market found its footing

Realtor.com's Glen Morgenstern brings this week's housing trends update using the past four weeks of a stretch that's been genuinely hard to characterize with a single word. The Data? It leans toward "settling."

Homes sold faster than they did a year ago for the second time in four weeks, a signal that demand may finally be finding solid ground after a long stretch of softness. Active inventory held above 1.1 million properties for the 6th straight week, and new listing activity stayed nearly flat against last year's pace, continuing a pattern of consistency that's held since late January.

Let’s start with the pace of sales, since that's where the most encouraging shift showed up. Median days on market fell by one day relative to last year, the second time that's happened in the past four weeks. Context helps here. In February, homes were sitting nearly 12% longer than they had the year before. Going back even further, from April 2024 through May of this year, homes sold more slowly than the prior year in every single week without exception. Since May, that pattern has reversed. Homes have sold either at the same pace or faster than a year ago, week after week, a genuine change in market conditions rather than a one-off blip.

New listings told a quieter but nonetheless consistent story. Activity dipped modestly from the prior week but stayed just above last year's pace. That near-flat reading extends a streak that's now held since late January, with new listings tracking within 1% of last year's level for six straight months. The two years are essentially following the same seasonal rhythm, and the year-to-date average sits only marginally below last year's, a negligible gap this deep into summer.

Inventory kept building too. The count of homes for sale held above 1.1 million properties for the 6th consecutive week, and this week's year-over-year gain was the largest since April, a modest acceleration after several weeks of steadier, more gradual growth. Active inventory has now grown on a year-over-year basis every single week since November 2023, though the pace has cooled considerably from the double-digit surges seen earlier in that run.

Supply hasn't sat at this level since November 2019, which says something meaningful about how far the market has traveled since the disruption of the pandemic years.

Prices eased slightly, which fits the seasonal pattern rather than signaling anything new. Both median list prices and price per square foot dipped a small amount in absolute terms this week, mirroring the same dip that showed up at this point last year.

This marks the 28th consecutive week that median list prices have trailed year-ago levels, a streak stretching back to mid-January. Price reductions, meanwhile, continue running below last year's pace, a trend that's held since January. Sellers, in other words, don't appear to be feeling meaningfully more pressure to cut prices than they were earlier this year. As Morgenstern's data shows, this is a market finding its footing rather than one still searching for it.

Realtor, TBWS

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Lower

Mortgage rates are moving lower today. The MBS market worsened by -37 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

These are the three things that have the greatest ability to impact rates this week. 1) Geopolitical (Oil), 2) Jobs and 3) ISMs.

1) Geopolitical: MBS were pushed lower last week primarily due to rising oil prices. This week, we start off with news that military action from the US is on "hold" to allow for some negotiations, as a result - oil prices have fallen.

2) Jobs: Every day this week we get either a job or wage related release that culminates with Big Jobs Friday. The stronger the job and wage data is... the worse it is for rates and vice versa.

3) ISMs: The most important non-jobs data this week are the ISM Manufacturing (Monday) and ISM Services (Wed).

This Week's Potential Volatility: High

This morning markets are seeing a boost on lower oil prices. Volatility has started high and could easily stay that way all week.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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