Royalty Concierge

Last week ending 1/16/23, inventory added 1,339 homes while mortgage rates fell! Weekly changes: 1. Purchases application data has stabilized. 2. Housing inventory increased by 1,339 Nationwide, this is a small number but could be the start of an important trend. 3. Mortgage rates peaked on 10/20/22.

The weekly data shows some good news for the housing market! The weekly inventory data, which had fallen faster than anticipated in the last weeks, has now seen a slight uptick.  With mortgage rates also falling, hopes increase that more sellers will list their homes and buy another, so expect a more functional housing market.

One of the biggest concerns for housing started at the end of June 2022, once mortgage rates got above 6%, the new listing data began to decline faster and earlier than normal. This is a problem for the existing home sales market since a traditional seller is usually a buyer, so lack of listing growth was a big hit to demand.

Every Friday we will get the existing home sales report, and we will have data to follow and to see, as it was expected, that the demand keeps falling but after this week’s report, we should have a low-level base formed for housing to stabilize.

As this week data shows, the waterfall dive in existing home sales has taken us toward the level of 2007-2008 monthly home sales. In general, it’s rare to have monthly sales below 4 million past 1996, but we can’t be surprised if it will be present next Friday.

However, the next existing home sales report will be for December 2022, which is backward looking, and now is time to look forward. The best way to look forward is the purchase application data, which has formed a bottom for now since seven of the last 10 reports have been positive in a non-seasonal time of growth. Before that, the data was showing constant weakness, so the lower mortgage data move since November has changed the dynamics, with purchase application data.

HOUSEWIRE.COM

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