In the two weeks leading up to the July 4th holiday week, our weekly Housing Market Tracker showed that housing data was stabilizing as mortgage rates approached their lowest levels of the year. However, with July 4th falling on a Friday, I noted that the following two weeks would likely disrupt our weekly data, and that turned out to be the case. That said, I expect things to return to normal next week. Let’s take a look at the current housing data.
Weekly housing inventory data
The most promising aspect of the housing market in 2025 is the increase in inventory and the slowing growth rate of home prices nationally. After several years following the COVID-19 pandemic, this year seems to reflect a nearly perfect balance. Although inventory decreased last week, this drop was mainly due to the impact of the two weeks around the holiday. The previous week, however, showed stronger growth than the usual trend. We can expect a return to normalcy starting next week.
- Weekly inventory change (July 4-July 11): Inventory fell from 853,180 to 846,833
- The same week last year (July 5-July 12): Inventory rose from 645,713 to 652,518
New listings data
The new listings data seems to have reached its peak for 2025. While we met my minimum target of 80,000 new listings per week this year during the seasonal peak period, I had hoped to see at least a few weeks of activity ranging between 80,000 and 100,000. Nevertheless, achieving the target is still a victory for 2025. This data line experienced a significant dip last week, but I expect it to rebound next week.
To give you some perspective, during the years of the housing bubble crash, new listings were soaring between 250,000 and 400,000 per week for many years. Here’s last week’s new listings data over the past two years:
- 2025: 60,726
- 2024: 56,622
Price-cut percentage
In a typical year, approximately one-third of homes experience price reductions, highlighting the dynamic nature of the housing market. Homeowners adjust their sale prices as inventory levels rise and mortgage rates stay elevated. We saw some stabilization in this data line before the July 4th holiday week, and we shall see what happens now that the two-week holiday data has been lifted.
For my 2025 price forecast, I anticipated a modest increase in home prices of approximately 1.77%. This suggests that 2025 will likely see negative real home prices again. In 2024, my forecast of a 2.33% increase proved inaccurate, primarily because rates fell to around 6% and demand improved in the second half of the year. As a result, home prices increased by 4% in 2024.
The rise in price reductions this year compared to last year reinforces my cautious growth forecast for 2025. The price-cut percentage looks perfectly healthy to me in a rising inventory environment where affordability is an issue — this is something I love dearly about the 2025 housing market.
Here are the percentages of homes that saw price reductions last week in the previous two years:
Purchase application data
The purchase application data showed 25% year-over-year growth last week, with 9% week-to-week growth. I wrote an entire article on what I believe is going on here, and this recent HousingWire Daily podcast explains why we have had the best year-over-year growth in years in 2025.
Here is the weekly data for 2025:
- 12 positive readings
- 9 negative readings
- 5 flat prints
Here is the year-over-year data for the last 23 weeks
- 23 straight weeks of positive year-over-year data
- 10 straight weeks of double-digit year-over-year growth
Weekly pending sales
Our weekly pending home sales provide a week-to-week glimpse into the data; however, this data line can also be impacted by holidays and any short-term shocks. Still, last week’s data showed year-over-year growth in our weekly pending sales, but the week-to-week data, like other weekly data lines, took the traditional July 4th holiday dive. We should get back to a more normal trend next week.
Weekly pending sales for last week in the previous two years:
- 2025: 61,143
- 2024: 58,321
Total pending sales
The latest weekly data on total pending sales from Altos offers valuable insights into current trends in housing demand. Typically, mortgage rates around 6% are necessary for significant growth in the housing market. However, even with elevated rates, we are still experiencing year-over-year growth.
Weekly pending sales for the last week over the previous year:
- 2025: 387,590
- 2024: 381,517
10-year yield and mortgage rate
In my 2025 forecast, I anticipated the following ranges:
- Mortgage rates between 5.75% and 7.25%
- The 10-year yield fluctuates between 3.80% and 4.70%
We didn’t have a lot of economic data last week. Still, we had some crazy headlines — from Fed President Waller talking about needing to cut rates to get to neutral faster to President Trump putting more new tariffs on countries before the Aug. 1 deadline — so bond yields did have some action. We had a mini rollercoaster with the 10-year yield: it started at 4.32%, got up to 4.43%, dropped back down to 4.32% and then ended the week up at 4.41%. Mortgage rates didn’t budge much at all, starting the week at 6.79% and ending the week at 6.82%.
Again, mortgage spreads acting better this year limits the damage to the upside when the 10-year yield rises.
Mortgage spreads
Mortgage spreads have been elevated since 2022 but have improved since their peak in 2023. We experienced some drama with the spreads in April as the markets dealt with the tariffs, but things have improved as the market has calmed down. Over the weekend and last week Trump announced new tariff percentages on countries ahead of the Aug. 1 deadline, so we shall see how the stock market reacts to that. The spreads calming down recently has helped bring stability to the mortgage market.
If the spreads were as bad as they were at the peak of 2023, mortgage rates would currently be 0.76% higher. Conversely, if the spreads returned to their normal range, mortgage rates would be 0.74%-0.54% lower than today’s level. Historically, mortgage spreads have typically ranged between 1.60% and 1.80%.
The week ahead: Inflation week, tariff headlines, retail sales and housing starts
We have a ton of data coming up this week: it’s inflation week, and one of the Fed presidents said last week that the Fed believes that they will see the tariffs inflation start to hit in the June reports and continue for the rest of the year. And who knows what tariff headlines we’ll get? We also have retail sales to track consumer activity and the all-important jobless claims data, which has been falling over the last few weeks.
We also have a pair of housing data lines that are always key to the economic cycle: builders’ confidence data and housing starts. We will have a multitude of economic reports to work with this week.
