One of the most notable early signals in the 2025 housing market has been the resurgence of new listings, which have finally rebounded after a prolonged two-year lull. During this year’s seasonal peak, new listings surpassed 80,000 per week—an encouraging milestone. The pressing question now is whether we’ve already reached the high-water mark for new listings this year.
New Listings: A Cautious Recovery
We’re currently in the calendar window when new listings typically peak, but last week’s performance offered only a modest uptick—falling short of expectations. Post-holiday data can be noisy, so it’s often wise to wait two weeks before interpreting the trend. That said, both new listings and active inventory posted only slight increases last week.
The past two years represent historically low periods for new home listings—especially troubling considering that 70–80% of sellers are also buyers. In 2024, the goal was to hit 80,000 listings per week during peak season, but the market only reached 75,000. This year, we’ve already exceeded 80,000 twice, with hope remaining for a few more weeks at or above that level before seasonal declines set in.
What the market must avoid is a premature drop-off—like the one seen in the latter half of 2022—which led to fewer sellers and tighter inventory. Historically, from 2013 to 2019, seasonal peaks for new listings ranged from 80,000 to 110,000 per week.
For context, during the housing bubble crash years, weekly new listings often hovered between 250,000 and 400,000—a vastly different landscape. Here’s a snapshot of last week’s figures for the past two years:
- 2025: 73,433
- 2024: 72,012
Inventory Growth: A Positive Turn
The expansion of active inventory in 2024 and 2025 marks a pivotal development. After declaring the market “unhealthy” in late 2020 and “savagely unhealthy” by early 2022, the current growth is a welcome shift. It may have taken longer than hoped—since expressing optimism in February 2021 about rising rates—but the trend is now moving in a healthier direction.
- Inventory Change (May 30–June 6, 2025): Increased from 803,519 to 808,564
- Same Week in 2024 (May 31–June 7): Increased from 604,922 to 611,543
Though growth was modest last week, expectations are for stronger momentum in the weeks ahead.
Price Cuts and the Home Price Forecast
Roughly one-third of homes see price reductions in a typical year, reflecting a dynamic response to inventory pressures and high mortgage rates. In 2025, the forecast calls for a moderate 1.77% rise in home prices—a conservative outlook reflecting the broader climate.
Last year’s prediction of a 2.33% increase proved too low as falling mortgage rates—approaching 6%—boosted demand, ultimately pushing home prices up by 4%. The uptick in price cuts this year adds weight to the subdued 2025 outlook:
- 2025 Price-Cut Share: 39%
- 2024 Price-Cut Share: 36%
Rates and Yields: Staying Within Forecasted Ranges
The 2025 forecast projected mortgage rates between 5.75% and 7.25%, and 10-year Treasury yields ranging from 3.80% to 4.70%. So far, the data has followed the script.
Last week featured significant movement driven by job reports. The 10-year yield fell on a weaker ADP employment number, only to rebound following a stronger-than-expected Jobs Friday. Meanwhile, news of a potential meeting between former President Trump and Chinese officials nudged yields upward again.
- Start of Week Mortgage Rate: 6.96%
- Post-ADP Low: 6.87%
- End of Week Rate: 6.97%
Mortgage Spreads: Still Elevated but Improving
Since 2022, mortgage spreads—the gap between Treasury yields and mortgage rates—have been persistently wide. However, they’ve gradually improved since their peak in 2023. The market turmoil surrounding tariffs had temporarily disrupted spreads, but conditions have since stabilized.
What matters most is that spreads are behaving more constructively when yields rise—limiting rate volatility. If spreads were still at their 2023 peak, mortgage rates would be approximately 0.67% higher than they are today. Conversely, a return to normal historical ranges would place rates 0.63% to 0.83% lower.
Historically, spreads have hovered between 1.60% and 1.80%.
Purchase Applications: Positive Momentum Sustained
Last week saw an 18% year-over-year increase in purchase mortgage applications—despite a 4% week-over-week drop. This continued a strong 18-week streak of year-over-year gains, including five straight weeks of double-digit growth during May’s peak season.
With May behind us, the seasonal high for purchase application volume has passed, but 2025 marks a turning point: it’s the first year in a long while to deliver net positive growth.
Weekly 2025 data:
- 10 positive prints
- 8 negative prints
- 3 flat weeks
- 18 consecutive weeks of year-over-year growth
Pending Sales: Stability Despite High Rates
Data from Altos highlights the steady, if unspectacular, pace of pending home sales. Typically, rates near 6% are required to unleash stronger buying activity. Although rates have remained elevated in 2025, pending sales are slightly ahead of 2024 levels—showing resilience.
- Total Pending Sales (2025): 402,833
- Total Pending Sales (2024): 393,632
The weekly pending sales numbers also show moderate gains, though holidays can distort short-term trends:
- Last Week (2025): 69,363
- Last Week (2024): 67,649
As with new listings, it’s prudent to reserve judgment for another week to determine whether the trend will strengthen or stall.
Looking Ahead: Inflation, Auctions, and Policy Uncertainty
The week ahead brings high-stakes data and geopolitical developments. Two key inflation reports are due, alongside several bond auctions that could influence yields and rate expectations. Former President Trump is also expected to meet with Chinese officials to discuss trade policy—an event that could ripple through markets.
A new podcast episode next week will explore the inflation trajectory for the remainder of the year, especially in light of growing consensus—including from Fed officials—that inflation may rebound from its recent 2.1% low.
Watchers of the housing market will also be eyeing jobless claims, which are beginning to show signs of softening. As inflation and labor data shape the economic outlook, all eyes remain on the bond market—and on whether the “Godzilla tariffs” will continue to cast a shadow over trade and rates.
As for new listings, next week’s data will be telling. Will sellers stay engaged, or will the market see another early retreat?
