Overview of Purchase Application Data

The recent trends in purchase applications have shown a noteworthy rebound, with the latest data indicating an 11% increase from the previous week and a 13% increase year-over-year. This uptick comes after three weeks of consecutive declines, yet overall figures remain positive compared to last year. Historically, this metric is closely monitored from mid-January to early May, and the next week may mark a significant milestone if positive year-over-year trends continue into the summer months, although typical volumes decline post-May.

As of now, the weekly metrics for purchase applications in 2025 are as follows:

• Positive readings: 8
• Negative readings: 6
• Flat prints: 3

Total Pending Sales Insights

The latest figures from Altos on total pending sales suggest an overall slowdown, which can be attributed to the impact of elevated mortgage rates. As mortgage rates climbed above 7% in early April, the data reflected some effect, but home sales remain comparatively stable to the previous year despite these conditions.

Weekly pending sales from recent years are as follows:

• 2025: 398,653
• 2024: 393,788
• 2023: 368,490

Mortgage Rates and 10-Year Treasury Yield

Looking ahead, mortgage rates are projected to fluctuate between 5.75% and 7.25% in 2025, with the 10-year yield expected to range from 3.80% to 4.70%. Recently, yields have increased while mortgage spreads showed improvements, particularly on days with rising bond yields. Stability in mortgage rates has been observed despite some fluctuations in yield rates.

Understanding Mortgage Spreads

Historically elevated since 2022, mortgage spreads have shown signs of improvement from their peak in 2023. With recent market volatility, spreads have faced setbacks, but overall trending shows positive developments. If current spreads were at their previous peak, mortgage rates could have been approximately 0.66% higher. In contrast, a return to normal spread levels could lower rates about 0.64% to 0.84%, suggesting a potential for rates near 6%.

Weekly Housing Inventory Update

One notable shift in the housing market for 2024 and 2025 is the increase in inventory levels, essential for restoring market efficiency. Recent inventory changes indicate a rise from 744,225 to 755,895 units between May 3 and May 9, compared to last year’s increase from 556,291 to 568,557 during the same time. The lowest recorded inventory was 240,497 in 2022, while the current peak for 2025 is 755,895 units.

New Listings Data Milestone

May 2025 marks a significant achievement with over 80,000 new listings recorded. While this milestone aligns with predictions, the previous two years saw historically low new listings. The current figures reflect a shift toward normalcy, where seasonal peaks typically range from 80,000 to 110,000 listings weekly. Recent data reveals:

• 2025: 80,338
• 2024: 68,793
• 2023: 61,911

Market Dynamics in Price Reductions

In any given year, it is common for about one-third of homes to experience price reductions due to rising inventory and mortgage rates. The projection for home prices in 2025 indicates a modest increase of approximately 1.77%. This cautious forecast could be adjusted upward if mortgage rates decrease to around 6%.

Recent data on price reductions shows:

• 2025: 36.7%
• 2024: 33%
• 2023: 29%

Looking Ahead: Key Economic Indicators

The upcoming week is pivotal as it includes updates on the trade talks with China, speeches from several Federal Reserve Presidents, and crucial inflation data alongside housing starts information. Continuous monitoring of bond and stock market reactions to trade news, as well as purchase application trends, will be essential during this period.