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Mortgage rates are at yearly highs, but housing demand is still positive
Pending sales rose to 78,006 and purchase apps rose 7% yearly, even as mortgage rates hit highs and yields neared 4.60%.
Mortgage rates and the 10-year yield both hit yearly highs after the Friday
We closed last Friday at 4.596% on the 10-year, which was the high end of my 2026 forecast. Back in March, Weekly pending sales usually take 30-60 days to hit the sales data. Typically, mortgage rates above 6.64% and those breaking over 7% really impact the data negatively. Under 6.25% has been the sweet spot over the past several years, excluding short-term variables. I went on Mortgage purchase application data
Purchase application data is a forward-looking indicator: growth here leads home sales by roughly 30-90 days. Housing inventory
The housing inventory story has really stayed the same since mid-June of 2025, when I New listings
I was very excited about the new listing data from two weeks ago, when we got over 80,000, and I am still looking for the elusive back-to-back weeks of new listings data over 80,000 during the seasonal peak period. We didn’t get that last week as we had a slight decline, but it’s still higher than last year at this time. Normal new listings data runs between 80,000 and 100,000 during the seasonal peak period. Some context for those who think this market resembles the housing bubble years: new listings ranged from 250,000 to 400,000 per week for several years. Conversely, the peak in new listings post-COVID was 91,000 in 2022. So, if I doubled the highest new listings in the past few years, it wouldn’t even match the lowest period during the crash years. I wrote about why a 2008 housing crash can’t happen again Price-cut percentage
Typically, about one-third of homes undergo price reductions before they sell, reflecting the dynamic nature of the housing market. For the most part in 2026, the price-cut percentage has been lower year over year. In my 2026 home-price forecast, I had a negative 0.62% call for the year nationally. However, mortgage rates went lower than I thought they would at the start of this year, and when the FHFA announced the The week ahead: Iran, oil prices, Fed speeches and housing starts
The closer we get to June, the more mindful we need to be about oil prices, the bond market, inflation, and Fed governors. One month from now, if we get no closure to the Iran conflict and oil reserves continue to dwindle, it could be an even bigger issue for everyone around the world as we go into September. This week, we have a number of Fed governors scheduled to speak, and more and more of them are getting vocally hawkish. We do have housing starts data as well. However, it’s all about the conflict in Iran, especially if President Trump decides to end the ceasefire and start attacking again.
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Originally published by Logan Mohtashami
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