It was a wild ride for the housing market last week! The 10-year yield rose significantly, sending mortgage rates close to 7% in the heart of the spring selling season. Data for new listings decreased, however, active inventory grew. In app purchases saw a negative weekly print, continuing the 2023 theme of high data impact rates.

Here’s a quick recap of the past week:

• Total active rosters grew by 3,809 weekly, but new listings are still trending toward all-time lows.
• Mortgage rates rose last week as we started the week at 6.55% but closed at 6.90%.
• Orders fell 4.8% weekly as the streak of higher rates continues to affect the weekly data.

Weekly housing inventory

They say slow and steady wins the race; Well, for the housing inventory in 2023, it’s been very slow this spring. How slow is the active roster growing? Here are my crazy stats for the week: In the past year at this time, the weekly active inventory has grown by 25,542 in just one week. This year from the seasonal bottom, the total increase was only 18,722.

Can anyone say brutally unhealthy? In my wildest dreams, I never could have imagined this could happen so close to June.

• Weekly inventory change (May 5-12): Inventory increased from 420381 to 424190
• Same week last year (May 6-13): Inventory increased from 312,857 to 338,399
• It was the lowest stock for 2022 240194
• Peak for 2023 so far 472,680
• For context, this week’s active listings are in 2015 He was 1,108,932

according to Altus Research, and new listings data fell last week, and the year-over-year decline was very noticeable as we’ve been heading at all-time lows all year. However, at this time last year, we saw some growth in new listings versus 2021 levels. In the second half of 2022, mortgage rates were up around 7.37%, and new listings started to turn negative as some people gave up listing their homes at high rates. Extremely.

Here is this week’s new listings data over the past several years:

• 2023: 59651
• 2022: 84,298
• 2021: 76,051

Here’s the new listing data for the same week in more regular years to give some historical perspective:

• 2017: 89,411
• 2016: 90,048
• 2015: 90323

the NAR data To decades and shows how difficult it is to bring total active rosters back into the historical range of 2 million to 2.5 million. The most recent existing home sales report, which I wrote here, showed that year-over-year growth came from it 1.03 million to 1.04 million.

NAR: Total Inventory:

10 year return and mortgage rats

A crazy week in the 10-year yield sent mortgage rates skyrocketing. We have a lot of dramatic talking points with debt ceiling issueHowever, the jobless claims data had a good report, reversing the previous week’s large negative number.

When I talk about mortgage rates, it’s really about where I feel the 10-year yield is going for this year. In my outlook for 2023, I said that if the economy remains flat, the 10-year yield range should be between 3.21% and 4.25%equation for 5.75% to 7.25% mortgage rates.

Now if the economy becomes weaker, which means the job market sees a significant rise in unemployment claims, the 10-year yield should collapse 3.21%all the way to 2.72%. This would take mortgage rates under 6%and if the spreads return to normal, that could send us lower 5% Mortgage rates again.

However, on that front, jobless claims had a good week, as well signed It is a positive signal for the labor market, not a negative one.

From the Federal Reserve Bank of St. Louis: “Initial claims for unemployment insurance benefits fell by 22,000 to 242,000 in the week ended May 13, dragging the four-week moving average down to 244,250.”

Purchase application data

The housing market shifted dramatically when mortgage rates peaked late in the year and began to decline. During that time, orders were more positive than negative publications, stabilizing demand. As we can see below, the dive into in-app purchases has stalled as prices drop.

However, however, as prices go up, it negatively impacts weekly data, and last week’s in-app purchases decline. 4.8%. With mortgage rates again near 7%, this week’s application data is likely to be negative.

When mortgage rates go up 5.99%-7.10% Earlier in the year, we had three weeks of negative data. And then as rates go down, the data line improves — traditionally, total volume peaks in May, and seasonality kicks in for the rest of the year. I’m watching the second half of 2023. If mortgage rates drop significantly, we could see another spike in demand late in the year that we’ve seen in the previous three years.

next week

We are getting closer and closer to each other short term decision debt ceiling issue, but the wild ride could still be crazier this week. The debt ceiling issue is a wild card for market activity This week, with or without a resolution, so the focus will be put there until it ends or it rolls out until September. The market will pay more attention to that than to the economic data this week.

However, we do have some key economic reports this week, including new home sales, pending home sales, and personal consumption inflation data on Friday, which the Fed wants to get closer to 2%. The world would love to pay more attention to CPI inflation data, but core PCE at 2% is the Fed’s target level.

The market knows that the rate of inflation growth peaked last year, but it is trying to determine when the economic expansion is and when the next recession of job losses begins. This is why I make sure to keep track of weekly jobless claims. We need to watch the 10-year bond yield because, due to a debt fiasco, bond yields could have a chaotic week, which could quickly reverse up or down.

That is why in these weeks, when we have political factors, we must be careful about making statements about a long-term change in the data. Once this dramatic story is over, we can focus on the real economic data.