Stable Mortgage Rates Drive Slight Uptick in Mortgage Applications. Housing affordability remains a pressing issue, with 74.9% of U.S. households unable to afford a median-priced new home in 2025, according to the latest analysis by the National Association of Home Builders This Week in Real Estate. Despite this, purchase applications are increasing as mortgage rates stabilize in the mid-6% range, marking a 5% rise compared to a year ago. The average fixed-rate for a 30-year mortgage slightly increased last week, ending a seven-week decline that had previously eased borrowing costs for prospective spring homebuyers. The 30-year fixed-rate mortgage averaged 6.65%, up marginally from 6.63% the previous week, and nearly 10 basis points lower than the 6.74% average from a year ago, according to Freddie Mac. Additionally, data from the Bureau of Labor Statistics indicated that consumer prices rose in February at the slowest pace in four months. Although the shelter category contributed nearly 50% to February’s overall monthly Consumer Price Index (CPI) increase, the rate of housing cost increases eased to the slowest pace in more than three years. Below are key events from the second week of March impacting our business:
FEBRUARY INFLATION DATA SHOWS HOUSING COSTS ROSE AT THE SLOWEST PACE IN OVER 3 YEARS. The latest Consumer Price Index (CPI) showed that housing cost increases eased in February to the slowest pace in over three years. Data from the Bureau of Labor Statistics showed that shelter costs rose 4.2% from a year earlier in February, slower than the 4.4% increase seen in January and the smallest 12-month increase since December 2021. On a monthly basis, housing costs ticked up 0.3% compared to February and down from January’s 0.4% monthly increase. Still, the housing component accounted for nearly 50% of February’s overall monthly CPI increase. Overall, consumer prices rose 0.2% over the previous month, down from January’s monthly increase of 0.5% and lower than economists’ expectations of a 0.3% monthly rise. Read the full story here.
HOUSING SUPPLY GAP REACHES NEARLY 4 MILLION IN 2024. In 2024, new-home construction outpaced household formations for the first time since 2016. Just under 1 million households were formed, the lowest annual rate since 2016. In the same period, 1.36 million homes were started, outpacing household formations by almost 400,000 homes. Despite this notable progress, the housing gap persists, totaling 3.8 million. Home completions reached the highest level in nearly two decades due to an increase in both single- and multi-family construction. An estimated 1.6 million expected Gen Z and millennial households did not form in 2024 due to various factors, including a lack of affordable housing. At a 2024 rate of construction relative to household formations and pent-up demand, it would take 7.5 years to close the housing gap. Although the supply gap improved in 2024, it is still the third-largest annual gap since 2012, behind 2020 and 2023. The improvement compared with 2023 was due to a combination of lower household formations, lower pent-up demand, and higher new-construction activity, especially in the single-family segment. Despite this impressive showing by new construction, the housing gap persisted due to the magnitude of the historical gap and ongoing pent-up household demand. 2024 brought the second-highest level of single-family housing starts since 2007, as builders stepped up to fill the gap created by scarce existing-home inventory. Read the full story here.
COULD HOMEBUYERS FIND BARGAINS THIS SPRING? Pending home sales inched up for the week with small gains but remained below the numbers seen at this time last year. New listings volume is trying to grow with its biggest week since September. List prices inched up for the week, though sales prices did not advance. The unsold inventory of homes on the market across the country is 28% greater than last year at this time. We counted 63,000 newly pending home sales this week for single-family homes. That’s up 5% for the week, though still running a couple percent behind the same week a year ago. It is the most pending home sales since August, so spring is starting to take shape. But since January, the pace of home sales each week has been running about 3% fewer than a year ago. At HousingWire, we’ve forecast that U.S. home prices would climb about 3.5% in 2025 over the previous year. The first price measure to watch is the median price of this week’s pending home sales, which came in at $389,900. That’s unchanged from a week ago. It’s 2.6% above last year at this time. The price of the active market listings is $435,000 now. That’s up 1.2% from a week ago and is just fractionally above 2024. The price of the newly listed cohort came in pretty strong recently at $435,900. This was a jump of 2.5% for the week and is currently 3.7% above last year. There was a nice jump in the new listings volume this week. There were 64,000 single-family new listings with another 12,000 immediate sales. That’s 76,000 total home sellers in the week. That’s just fractionally more than a year ago, and the most new listings since September. The spring market is trying to emerge. Read the full story here.
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