Is housing inventory about to turn negative year over year?

Housing inventory

Inventory is seeing its traditional seasonal increase and while we are on the verge of going negative over last year, inventory is in a much healthier spot than the COVID years. Easter weekend had some impact on last week’s data, but the growth rate is really running  into hard comps until mid-June.

We have gone from 33% year-over-year growth in inventory at the highest point in 2025, to 3.21% last week. In the past, inventory growth picked up amid higher mortgage rates, softening demand and rising year-over-year new listings. Even with the Iran conflict pushing rates higher from 5.99% toward 6.64% recently, 2026 has had the lowest rate curve for the housing market to work from since 2022 and rates have not gotten above 7% in a while. 

• Weekly inventory change: (April 3-April 10): Inventory rose from 723,460 to 724,977
• Same week last year: (April 4-April 11): Inventory rose from 691,173 to 702,436

New listings

I have been disappointed with the new listing data so far this year as I was hoping we would get some weeks where new listings ranged between 80,000-100,000 during the seasonal peak months, which would be what we would see in a normal year.

Last week new listings were again negative year over year. I can attribute some of that data to the Easter holiday but it’s still been a disappointing year with new listings as it looks very hard to get the range I wanted. For context, during the housing bubble crash, new listings ranged from 250,000 to 400,000 per week for several years.

Here is last week’s new listings data for the past two years:

• 2026: 70,244
• 2025: 76,271

Price-cut percentage

Typically, about one-third of homes undergo price reductions before they sell, reflecting the dynamic nature of the housing market. As mortgage rates and inventory rise together, the percentage of price cuts increases.

In my 2026 home-price forecast, I had a negative 0.62% call for the year nationally. However, mortgage rates were lower than I thought they would be at the start of this year and the FHFA’s announced purchase of mortgage-backed securities pushed mortgage spreads lower than I expected.

I believed we would see that improvement later on in the year. Spreads are higher than that level today due to the Iran conflict so if there was no Iran conflict my forecast would have been incorrect. Now, if rates head higher and stay higher for longer, I do have a shot at my call being more correct. Still, the percentage of price cuts is below this time last year.

The price-cut percentage for last week:

• 2026: 34.30%
• 2025: 35%

10-year yield and mortgage rates

In the 2026 HousingWire forecast, I anticipated the following ranges:

• Mortgage rates between 5.75% and 6.75%
• The 10-year yield fluctuating between 3.80% and 4.60%

Last week saw the 10-year get as low as 4.23% due to the ceasefire news, but ended the week at 4.32% as we all wait to see if a ceasefire can hold. Even amid higher oil prices, the 10-year yield didn’t reach its yearly high last week, holding mostly steady with news about the ceasefire and hotter inflation data. Mortgage rates didn’t budge too much this week as they started at 6.43% and ended the week at 6.39%.

Mortgage spreads

Mortgage spreads remain a positive story for housing in 2026, as mortgage rates would have easily been over 7% in 2023 and 2024 and close to 7% in 2025, with the current 10-year yield level and the worst spread levels. The spreads were already getting worse in February as yields fell, compressing volatility on the downside, and then got even worse due to the war, but now have moved slightly lower again. As you can see below, we are still at better levels than the past two years.

Historically, mortgage spreads have ranged from 1.60% to 1.80%. Last week, spreads closed at 2.05%, down from 2.11% the week prior.

However, I wanted to compare last week’s rates to the worst levels of the spreads over the past three years, with the 10-year yield at its current level.

• If we had the worst mortgage spread levels of 2023, mortgage rates would be 7.45% today, not 6.39%.
• If we had the worst levels of 2024, mortgage rates would be 7.08% today.
• If we had the worst levels of 2025, mortgage rates would be 6.88% today.

Weekly pending sales

• 2026: 68,864
• 2025: 71,632

Mortgage purchase application data

Purchase application data is a forward-looking indicator: growth here leads home sales by roughly 30-90 days. Last week, we saw week-to-week growth of 1% but purchase apps were down 7% year over year. So, higher mortgage rates are impacting this data but nothing too dramatic so far. We did have a hard year-over-year comp to work with, so again it will be interesting to see next weekend’s data.

For purchase apps, what I really value is at least 12-14 weeks of positive week-to-week data. If we can get that positive week-to-week data to go with year-over-year growth, then we have something cooking. For 2026, every week has shown positive year-over-year growth, but that growth rate has slowed for the last two weeks. 

Here’s 2026 so far:

• 6 positive week-over-week prints
• 6 negative week-to-week prints
• 1 flat week-to-week print
• 7 weeks of double-digit year-over-year growth
• 12 weeks of positive year-over-year growth
• 1 negative year over year print

The week ahead: Iran, plus inflation, Fed speeches and existing home sales

Monday morning we will all be waiting to see what happens with the ceasefire and whether there is a plan to end this conflict and gets ships moving again.