07/14/2025
🏡 Surprise Dip in Housing Inventory: Is the Market Tightening Again?
Inventory Dip | Buyer Demand Surges | Major Economic Reports on Deck
As we move into mid-July, the U.S. housing market is showing remarkable resilience. Despite disruptions from the July 4th holiday, the key data points paint a picture of a market that’s stabilizing — not stalling. Inventory may have taken a brief dip, but buyer demand is gaining steam, and all eyes are on the economic reports ahead that could shape the rest of the summer.
Here’s what’s happening:
📉 Inventory Update: Temporary Dip, Long-Term Growth Intact
Last week, total active housing inventory slipped from 853,180 to 846,833 — a typical post-holiday decline. But this drop doesn’t signal a shift in trend. It’s more about timing than sentiment. For comparison:
Same time last year (2024): 645,713 → 652,518
This year: Inventory levels are 30% higher year-over-year
💡 Why it matters:
Inventory growth is a key pressure release valve for affordability. More homes on the market give buyers options and force more realistic pricing from sellers — something we haven’t consistently had since 2020.
🆕 New Listings: Below Peak, But Rebound Expected
We may have reached the seasonal peak for new listings. Last week’s number fell to 60,726, down from our recent high of 80,000+, but that’s not cause for alarm.
2025: 60,726
2024: 56,622
The decline is typical after a major holiday and should bounce back next week. While we didn’t quite hit the 100,000-week threshold, we consistently met the target minimum of 80,000 during peak season — a win for 2025.
🔥 Buyer Demand: Purchase Applications Surging
This is the headline of the week.
📈 Purchase applications are up 25% year-over-year, with a 9% week-over-week jump — and we’ve now logged:
23 straight weeks of annual growth
10 consecutive weeks of double-digit year-over-year increases
🧠 Why it matters:
This kind of consistent growth hasn’t happened in years — not even in the recovery years after COVID. Despite mortgage rates hovering in the 6.8% range, buyers are stepping back in, drawn by more inventory and perhaps motivated by rate stability.
🏷️ Price Cuts on the Rise — And That’s a Good Sign
As expected in a more balanced market, the percentage of homes with price reductions continues to climb:
2025: 40.7%
2024: 38%
💡 Why this is healthy:
We’re finally seeing sellers react to market feedback. This helps prevent overpricing and encourages buyer engagement. A 1.77% price appreciation forecast for 2025 shows we're in a cooling but not crashing environment. For buyers, this means negotiating power. For sellers, it means pricing right matters more than ever.
📝 Pending Sales: A Clear Sign of Sustained Demand
Pending sales — both weekly and total — showed strength, even with the expected July 4th dip.
Weekly Pending Sales:
2025: 61,143
2024: 58,321
Total Pending Sales:
2025: 387,590
2024: 381,517
✅ Takeaway: Demand hasn’t disappeared — it’s adjusting to affordability and opportunity.
💰 Mortgage Rates & Spreads: Stability in the Face of Volatility
Mortgage rates held steady last week, moving slightly from 6.79% to 6.82%
The 10-year Treasury yield fluctuated from 4.32% → 4.43% → 4.41%
🔍 Mortgage Spreads Matter:
Spreads are better than they were in 2023 — this is helping keep mortgage rates from climbing even more, despite the movement in bond yields.
If spreads were still at 2023 peak levels, rates would be 0.76% higher
If spreads returned to normal, rates could be 0.54%–0.74% lower
🏦 With Fed officials signaling potential rate cuts and inflation watching, spreads may continue to improve — and that could mean slightly lower mortgage rates ahead.
🔮 The Week Ahead: Huge Data Incoming
This is a make-or-break week for economic data that could impact the housing market for the rest of summer:
Consumer Price Index (CPI) – inflation trends, especially tariffs
Retail Sales – consumer spending strength
Jobless Claims – early signal for employment health
Builder Sentiment Index & Housing Starts – critical for supply forecasts
🧭 Why this week matters:
Markets are looking for direction. If inflation cools and retail activity holds steady, we could see easing pressure on rates — which would further fuel demand and stabilize pricing.
✅ Bottom Line: A Market in Motion
The housing market is returning to its normal rhythm post-holiday — and it’s bringing opportunity for both buyers and sellers:
For buyers: Stronger inventory and rising price cuts improve your leverage
For sellers: Motivated buyers are active, but pricing strategically is crucial
For investors/observers: Economic data this week could move mortgage rates
