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Are we back to normal yet?  These last two weeks have my thinking every day is either Monday or Saturday! Here’s what we have for today: ️ Happenings: Mortgage demand plummets to end 2024  Education: Housing supply at 4-year high Rates: Rates generally flat last 2 weeks  Opportunities: You’re missing out on deals      HAPPENINGS… ️Mortgage demand plummets to end 2024A sharp rise in mortgage interest rates at the end of December severely impacted mortgage demand, coinciding with the housing market’s traditionally quietest period of the year. According to the Mortgage Bankers Association’s (MBA) seasonally adjusted index, total mortgage application volume for the two weeks ending December 27, 2024, plummeted by 21.9% compared to the previous week. Adjustments were also made to account for the Christmas holiday, and the MBA released data covering two weeks after closing for the holiday period. During this time, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances (up to $766,550) climbed to 6.97% from 6.89%. Points, including origination fees for loans with a 20% down payment, increased to 0.72 from 0.67. Mortgage rates, which had been lower than the previous year for much of 2024, ended the year 21 basis points higher annually. Applications to refinance home loans, which are particularly sensitive to interest rate fluctuations, fell by 36% compared to two weeks earlier. Despite this sharp drop, refinance activity remained 10% higher than the same period in 2023. However, the refinance share of mortgage activity decreased to 39.4% from 44.3% the previous week. Applications for home purchase mortgages dropped by 13% over the two-week period and were 17% lower than the same time a year ago. While December typically sees the lowest home sales activity annually, these figures are seasonally adjusted, emphasizing the market’s underlying weakness.Although more homes are available for sale compared to the same time last year, many properties have lingered on the market for months due to high prices and rising interest rates.      HERO NEWS SHORTS Half of listings on market more than 60 days Pending sales up 6.9% year-over-year Renters are continuing to stay renting NAR membership drops below 1.5M Home price growth continues to slow Fed may need stay restrictive for longer       EDUCATION… Housing supply at 4-year highKey Points:Over half of November’s home listings remained on the market for 60 days or more—the highest share since 2019.Active home listings rose 12.1% year-over-year, reaching their highest level since 2020.The increase in supply is largely due to a surplus of homes deemed overpriced or undesirable by buyers. Active home listings climbed to the highest level since 2020 in November on a seasonally adjusted basis, increasing 0.5% month-over-month and 12.1% year-over-year. While this might seem like relief in the context of America’s housing shortage, the numbers tell a more complicated story. The jump in supply stems mainly from a buildup of unsold homes—many of which buyers view as overpriced. More than half (54.5%) of home listings last month sat on the market for at least 60 days without going under contract. This marks the highest percentage for November since 2019 and is up from 49.9% a year earlier. Homes that did go under contract in November took a median of 43 days to sell, the slowest pace for that month since 2019. These findings are based on an analysis of listings on Redfin.com dating back to 2012. The report focuses on homes that spent at least 60 days on the market and were actively listed for sale on the final day of the month.      RATES… Rates generally flat last 2 weeksThe official holiday season may be behind us, but in the world of interest rates and bond markets, Friday marked the end of the winter holiday lull.  From a rate perspective, the period began on December 23rd, when the average top-tier 30-year fixed mortgage rate was exactly the same as it is today. While rates had an opportunity to move slightly lower, a stronger-than-expected economic report shifted momentum. The ISM Manufacturing Index, a key monthly indicator that tracks economic activity, came in modestly above market expectations. While it didn’t signal a major economic surge, the report was strong enough to prompt a mild reaction in bond markets, pushing the average 30-year fixed rate up by 0.03%. This week, the stakes increase as market activity typically ramps up during the first full week of the new year. A series of economic reports will be released, culminating in Friday’s highly anticipated jobs report. This report has a long-standing reputation for significantly influencing interest rate trends and could set the tone for the bond market in early 2025.

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