It has been almost two months since mortgage rates spiked again, and my initial thought was this would tank housing demand. We had a positive 18-week period with purchase applications before mortgage rates started rising in September. I figured those increases would produce the same weakness in purchase apps that we saw earlier in the year. However, surprisingly, demand has held up better than I anticipated. We aren’t growing like before, but we aren’t as negative as I thought either. Let’s take a look at the data.Purchase application dataWe have had six weeks of rising mortgage rates and I had anticipated purchase apps to be primarily negative. Instead, we are flat, with three positive and three negative purchase application data prints on the week-to-week data.When mortgage rates were running higher earlier in the year (between 6.75%-7.50%), this is what the purchase application data looked like:14 negative prints2 flat prints2 positive printsWhen mortgage rates started falling in mid-June, here’s how purchase applications responded:12 positive prints 5 negative prints1 flat printI expected more weakness as rates rose. I am curious about the next few weeks because, in the last two years, we had an early spring run in demand with application data, but that was with rates falling. Last week saw 2% week-to-week growth but was down 1% year over year.Weekly pending salesThe Altos Research weekly pending contract data provides insights into real-time demand. This data tends to be seasonal, as illustrated in the chart below. Initially, the data showed more robust performance as mortgage rates approached 6%. Even today, the pending contract data remains resilient despite higher home prices and mortgage rates than last year. This has caught my attention and is something I am following closely.The next time mortgage rates head toward 6%, assume that the demand curve gets better. But let’s be honest here: we are working from depressed sales levels.10-year yield and mortgage ratesMy 2024 forecast included:A range for mortgage rates between 7.25%-5.75%A range for the 10-year yield between 4.25%-3.21%This week was relatively calm for mortgage rates as the 10-year yield continues to hold steady at a critical level, which ranges from 4.40% to 4.50%. Given the inflation data and statements from the Federal Reserve, the past two weeks could have been interpreted as hawkish. However, the 10-year yield has managed to maintain its position, and the downtrend observed in the charts since the 10-year yield was at 5% in 2023 is still in place. Additionally, I’ve noticed that the Citigroup Economic Surprise Index, which usually fluctuates in tandem with the 10-year yield, is also peaking in the short term.Mortgage spreadsThe mortgage spread situation has shown improvement in 2024, in contrast to its negative performance in 2023. With these spreads improving, mortgage rates have been able to approach 6% at different times this year. Without this spread improvement, mortgage rates would currently be over 7.50%.Spreads have worsened slightly since mortgage rates started rising in September, but they remain far better than the disastrous peak levels experienced in 2023. If the spreads were as high as they were then, mortgage rates would be 0.68% higher today. Conversely, if we had average spreads, mortgage rates would be lower by approximately 0.75% to 0.85% today.Weekly housing inventory dataLast week saw another slight decline in active listing and soon, the holidays will kick in. I thought we might see a small pop in supply before Thanksgiving week, but no. The seasonal decline is well underway, and it looks like the 739,434 level will be the peak of inventory for 2024.Weekly inventory change (Nov. 15-Nov. 22): Inventory fell from 722,032 to 719,055The same week last year (Nov. 17-Nov. 24): Inventory fell from 569,898 to 565,875The all-time inventory bottom was in 2022 at 240,497The inventory peak for 2024 so far is 739,434For some context, active listings for this week in 2015 were 1,104,310New listings dataWhile active inventory didn’t rise, we did get a nice boost in new listings this last week. Still, when it’s all said and done, 2024 will be the second-lowest new listings year in history. We haven’t seen stress sellers on any scale that all those terrible YouTube accounts have been pushing for years. The goal for 2025 is to get new listings back to normal, which means that during the seasonal peak period, we should get new listings between 80,000 and 110,000 per week. During the housing bubble crash years, this data line was running between 250,000-400,000 per week for years. Here are the number of new listings for last week over the last several years:2024: 53,2202023: 48,5872022: 45,859Price-cut percentageIn an average year, one-third of all homes experience a price cut, which is typical in the housing market. When mortgage rates increase, the percentage of homes reducing prices tends to rise. Conversely, this trend can slow down when rates decrease and demand increases, as recently when rates fell. However, rates are back higher again. As we can see, we are at the same levels today as we were last year, even with more inventory. Here are the price-cut percentages for last week compared to previous years:2024: 39.1%2023: 39%2022: 43%The week ahead:  Home prices, new home sales, bond auction and inflation data This week is a holiday week, which means all hands aren’t at the trading desk, so we can see some volatility in markets, especially with some bond auctions happening. The markets will normalize after Thanksgiving, so it’s important to view the movements of the 10-year yield with some skepticism as mortgage rates might fluctuate a little bit more than normal this week.The new home sales data will be particularly significant as that reflects the economic cycle and recent purchase application data for builders has been positive. We also have the Fed’s PCE inflation data this week, which will be a factor for the next Federal Reserve meeting, although labor data is more critical. Home-price data is expected to show a cooling trend in growth compared to the highs earlier in the year. Additionally, keep in mind that jobless claims data can be unpredictable around holidays, so it’s important to consider this over the next few weeks.

In this week’s episode of the Power House podcast, HousingWire President Diego Sanchez sits down with Chad Smith, president and chief operating officer at Better. The duo discuss Smith’s decision to join Better, the company’s new platform and AI loan assistant, and its growth strategies going into 2025.This interview has been edited for length and clarity. To start the conversation, Sanchez dives into Smith’s decision to join Better following the company’s recent struggles.Diego Sanchez: Better has had a little bit of a difficult time with PR over the past few years. Why did you decide to take the president’s role at a company that has a little bit of a damaged reputation?Chad Smith: I’m a little surprised at how long the PR hangover, so to speak, has lasted. When Better called me, I was honored to get the call. With what’s happened in the marketplace over the last few years, I have a better chance at disrupting that and being part of a team capable of innovation and making change. Sanchez: How can the mortgage industry do a better job to avoid this boom-and-bust hiring trend?Smith: One thing Better has done an excellent job at is becoming one system with the Tinman platform. You don’t have all these different integrations or legacy vendor contracts. We’ve been able to lower manufacturing costs by 35% over the industry average, and I think that really has to be the answer for the larger industry. We focus on making people more productive.Sanchez: Let’s talk a little bit more about Tinman, since it is a proprietary, end-to-end platform. How does Tinman help Better grow and gain market share in 2025?Smith: We’re obsessed with driving costs down on the fulfillment side. I think customers are doing a lot more homework just from an affordability perspective. If you can leverage technology to drive the fulfillment cost lower than the price, consumers should benefit and that should improve conversion.Sanchez: Do you make Tinman available to other lenders?Smith: We have a pipeline. We focus on that. In this cycle, we’ve been very focused on our own house. Having said that, when people want fulfillment, solutions and quote, unquote, “mortgage in a box,” we certainly entertain those conversations.Sanchez: I do want to talk about Betsy. That was an interesting press release that you recently released. What is it?Smith: Betsy is the first voice-based AI loan assistant in the mortgage industry. It uses AI and language models to create solutions for consumers and internal customers. She is fully integrated with Tinman. We feel strongly about being able to scale in 2025 and beyond. The conversation ends with Sanchez and Smith exploring Better’s growth strategies for 2025 as technology becomes more prevalent due to impending growth for refinances. Smith: Servicers have a lot of MSRs and are in a slow grind down. They’re in a good position to capture minor refinances. For us, it’s about being in the right place, making sure you’re testing your marketing channels and maintaining a relationship with consumers.

President-elect Donald Trump announced late Friday that he has chosen Scott Turner, the former executive director of the White House Opportunity and Revitalization Council (WHORC), to serve as the next secretary of the U.S. Department of Housing and Urban Development (HUD) in his administration.Scott Turner, the nominee to lead HUD under President-elect Donald Trump." data-image-caption="Scott Turner" data-medium-file="https://img.chime.me/image/fs/chimeblog/20241123/16/original_ee96e50c-21f8-4219-a671-13f120ea40e3.jpg?w=201" data-large-file="https://img.chime.me/image/fs/chimeblog/20241123/16/original_ee96e50c-21f8-4219-a671-13f120ea40e3.jpg?w=534" tabindex="0" role="button" src="https://img.chime.me/image/fs/chimeblog/20241123/16/original_ee96e50c-21f8-4219-a671-13f120ea40e3.jpg" alt="Scott Turner, the nominee to lead HUD under President-elect Donald Trump." class="wp-image-494660" style="width:200px" srcset="https://img.chime.me/image/fs/chimeblog/20241123/16/original_ee96e50c-21f8-4219-a671-13f120ea40e3.jpg 534w, https://img.chime.me/image/fs/chimeblog/20241123/16/original_ee96e50c-21f8-4219-a671-13f120ea40e3.jpg?resize=100,150 100w, https://img.chime.me/image/fs/chimeblog/20241123/16/original_ee96e50c-21f8-4219-a671-13f120ea40e3.jpg?resize=201,300 201w" sizes="(max-width: 534px) 100vw, 534px" />Scott TurnerTurner, an ally of the president-elect and member of the America First Policy Institute, is a former professional football player and Texas state representative for part of Collin County and Rockwall County, from 2013-2017.  He played for the National Football League (NFL) for nine seasons prior to entering politics for teams including the former Washington Redskins, San Diego Chargers and the Denver Broncos.Turner helped “lead an unprecedented effort that transformed our country’s most distressed communities,” according to a statement from Trump released by the transition team, and he worked closely with former HUD Secretary Ben Carson by “overseeing more than 200 policy actions furthering economic development.”The president-elect added that Turner oversaw roughly $50 billion of private investment in opportunity zones, and is the founder and CEO of the Community Engagement and Opportunity Council (CEOC) that offers sports programs and mentorship in local communities. He is also an associate pastor at Prestonwood Baptist Church based in Plano, Texas.Housing industry groups were quick to react. From the Community Home Lenders of America (CHLA): “CHLA congratulates Scott Turner on being nominated as the next HUD Secretary. We look forward to continuing to work with HUD and the rest of the administration on creating affordable and accessible homeownership, particularly for first-time and underserved borrowers.“Heading into 2025, CHLA will continue to spearhead important initiatives at FHA that protect borrowers and the community lenders that serve them, such as: premiums commensurate with risk, a partial claims payment option, streamlining condo approvals, and pay-scale comparability.”David Dworkin, president and CEO of the National Housing Conference (NHC), also weighed in: “Scott Turner has a well-established commitment to community development and was a vocal advocate for investing in underserved communities in the first Trump administration,” he said. “We look forward to working with him in the years ahead.“He has been a vocal advocate for the Opportunity Zone program and we anticipate working with him to extend and expand the program to incentivize the construction of housing affordable to first-time home buyers, especially first-generation homebuyers.”Turner’s announcement comes alongside a slew of other major appointments the transition made late Friday, including hedge fund manager Scott Bessent as secretary of the U.S. Department of the Treasury, Rep. Lori Chavez-DeRemer (R-Ore.) as secretary for the U.S. Department of Labor, Russell Vought to lead the White House Office of Management and Budget (OMB), Marty Makary as commissioner for the Food and Drug Administration (FDA), and physician and former congressman Dave Weldon as head of the Centers for Disease Control and Prevention (CDC).Consumer Bankers Association (CBA) President and CEO Lindsey Johnson issued the following statement on Bessent’s appointment: “On behalf of America’s leading retail banks, we congratulate Scott Bessent on being tapped to be President-elect Trump’s U.S. Treasury Secretary.“As an experienced and accomplished businessman, we applaud Mr. Bessent’s recent comments in which he has called for a surge in small business optimism, a smart deregulatory banking agenda, and support for Main Street. If confirmed, we look forward to working with Mr. Bessent to advocate for sound financial regulatory policy that enable banks to better support consumers, small businesses, and the economy at large.”This is a developing story.