Inventory and mortage rates go in the right direction

HousingWire’s lead analyst Logan Mohtashami closed out the year with a clear message: demand is finally stabilizing. As he noted, total pending home sales in 2025 have reached a “multiyear high for this calendar week,” and it’s supported by four straight months of year-over-year growth in existing sales.

The big driver is straightforward. Mortgage rates have held below 6.64% for 16 consecutive weeks, and every dip toward the low-6s has pulled buyers back into motion. Weekly pending contracts remain up more than 15% year over year, and purchase applications have posted 42 straight positive YOY readings, including 29 consecutive weeks of double-digit growth.

Rates have been steady. The 10-year Treasury has moved inside a narrow band for a month, and mortgage spreads continue to improve. As Mohtashami put it, spreads are now only “33 basis points away from normal levels,” which is why today’s rates are in the mid-6s instead of nearly a full point higher. A continued return to normal spreads puts mortgage rates in the 5.8–6.0% range.

Inventory is telling a different seasonal story. Growth that peaked at 33% YOY is now cooling to 15.5% as demand firms and new listings decline. Active listings slipped again last week — a normal November pattern — but remain solidly above last year’s levels. Pending homes sales in 2025 were at a weekly high. Price reductions rose to 41.2%, a reflection of a market adjusting its expectations rather than losing footing.

Bottom line:
The data points to a market that’s stabilizing, not stumbling. When rates hover near 6%, buyers respond. Inventory is expanding but not enough to shift full leverage. And the steadiness we didn’t have in 2023–2024 is finally taking shape heading into 2026.

Credit: Logan Mohtashami, HousingWire. Source Altos Research