Home sales are positive but higher rates slowing demand

Mortgage rates hit a yearly high last week and even though housing demand is still positive year over year, it is slowing down, just not in a big way yet. Typically, in the past few years, when mortgage rates get above 6.64% and then break over 7%, housing demand slows. Housing data always improves when rates move lower than 6.64% and just stay near 6%. We have seen this back-and-forth dance with sales data since the start of 2023 and typically sales don’t go anywhere, but since most of the year has been below 6.64%, housing demand has held firm. Mortgage rates still haven’t breached 7% this year, but if rates go higher for longer, the data will fade, so let’s take a look at this weekend’s tracker. Weekly pending sales Our pending home sales data provides a week-to-week perspective, though results can be affected by holidays and short-term fluctuations. This weekly pending sales data typically takes 30-60 days to be reflected in the sales data. Two weeks ago, we saw a smidge of a decline year over year, and last week we saw a smidge of an increase year over year, but make no mistake, housing is slowing. For now, the growth rate has really cooled off. Here are the pending sales for ...