Housing demand remained positive year over year, but momentum cooled as mortgage rates reached 6.64%. Purchase applications slowed to 5% year-over-year. Inventory increased to 713,549. The 10-year yield hit 4.48% amid global volatility. Historical trends indicate that mortgage rates below 6.64% boost demand, while rates above 6.64% negatively impact it. Weekly pending sales data showed positive yearly growth but a week-to-week decline. Purchase application data, a forward-looking indicator, also slowed from 12% to 5% year-over-year, indicating a potential downturn in home sales.
"Housing demand, even last week, still showed year-over-year growth with mortgage purchase applications data and our weekly pending home sales. However, that growth has slowed and we are at a key inflection point for mortgage rates."
"Over the past few years, anytime mortgage rates fell below 6.64% and headed toward 6%, housing demand always improved. However, it works the other way too: when mortgage rates go above 6.64% and head over 7%, demand turns negative."
"Last week, we did see year-over-year growth, but it slowed from 12% to 5%, and we saw a week-to-week decline of 5%. So, higher mortgage rates bit into the yearly growth data last week."
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