REAL ESTATE REALITY ZONE

The RE Reality Zone is a quick summary of key real estate market data available for you to get clarity on the market trends without getting lost in the noise of fake news, YouTube clickbait, or data overwhelm.

30 Second Summary

If you only have 30 seconds read this:

Mortgage Interest rates dropped a bit to get under 7% again. Buyers can’t get into a loan unless they buy less house than they need, or wages increase.

We’re getting farther and farther from the super-low interest rates, so the “recency bias” is wearing off.

That will increase buying activity as wages rise, and/or optimism of wages increasing. Home sales are down 5% this week from the same period last year, but mortgage applications were huge and held up. Let’s see if that translates into a surge of home purchases/sales this Spring to offset the inventory.

Seasonally, the national supply of single-family houses (inventory) will increase as we enter the Spring (total inventory is still 20% below the pre-pandemic level in 30 states).

The new listing volume is trending down, and sellers' motivation to sell continues to be very low because they have lower mortgage payments than they will get if they sell and move. This lack of sellers has been coined “the Great Stay.”  

Mortgage delinquency rates are 3.48%, less than the 4.5% normal pre-pandemic level.

Foreclosure starts are 5.4% lower than pre-pandemic levels.  Foreclosures are 34% less than pre-pandemic levels. This is because people don’t want to lose their loan payments. Renting somewhere would be hundreds of dollars more per month.

Nothing shows an imminent price crash unless the greater economy tanks. That is unlikely. The real problem is that people with median incomes can't afford a median-priced house. That is a significant problem that can only be fixed with wages catching up to cost.

We need more houses. If the illegal immigration situation changes, that may affect housing. No one knows by how much.

Make your purchase and sale decisions based on the fact that the sales pace increases starting in late January.

Key Stats

If you have 2.5 more minutes see below:

(Stats from from Altos, Housingwire, Jason Hartman, Joe Manausa, and others)

Last week’s SFH Inventory on Market: $635,000 (Altos)

This week’s SFH Inventory on Market: $632,000 (27.8% higher than same week last year)

Listing volume – 54,000 new listings (3.8% higher than same week last year)

Sales volume – 57,500 new contracts (5% lower than same week last year)

This week’s TOTAL SFH in Contract status: no weekly data

This week’s price reductions are Lower at 33.2% = High (normal is 30-35%).

(A leading indicator of buyer demand strength, and home price direction)

Last week’s on-market SFH Median Home Price: no weekly data

This Week’s on-market SFH Median Home Price: $425,000 (unchanged vs. same week last year)

Last week's Median Price of Homes in Contracts: $389,700

This Week’s Median Price of Homes in Contracts: $389,000 (2.4% higher than same week last year)

Last week’s Median Price of New Listings: no weekly data

This Week’s Median Price of New Listings: no weekly data

Housing Vacancy Rate: 6.9% – very low (quarterly)

National vacancy rates in the third quarter 2024 were 6.9 percent for rental housing and 1 percent for homeowner housing. The rental vacancy rate was slightly higher than the rate in the second quarter 2024 (6.6 percent) and than the rate in the third quarter 2024 (6.6 percent).. Source

United States Single Family Home Prices

Source: tradingeconomics.com

United States Total Housing Inventory

Source: tradingeconomics.com

Charts below updated on February 11, 2025

Policy Watch

– Look for economic changes to increase national revenue, like energy sales. Hard to say what the affects will be on mortgage interest rates.

— The US owes 36 Trillion dollars in national debt, please hold our leaders accountable to reduce that number and be fiscally responsible. Yes, it means tough discussions on what should be cut. This high debt means interest rates have to be high to sell the treasuries to other countries. Speaking of debt, the treasury bonds that came due in 2024 were not pushed out years like they should have been - instead they were pushed out short term to the first quarter of 2025 to be dealt with this quarter, or pushed out again.

— Are the BRICS nations going to get off the Dollar and go to gold or a digital currency? It seems like those countries would not be able to organize themselves enough to do it, but they are sure trying hard to unseat the dollar. Firm but fair financial system management is critical.

-The complaining about tariffs is unwarranted. Look how quickly Canada and Mexico put troops on the border to stop the fentanyl. Also using tariffs to balance trade deficits is not going to “harm our allies” it’s called fair trade. It may have a temp effect on price, but the long-term gains are obviously far better for Americans.

— *** The jobs report is important. Please know when the gov puts out a report like "jobs", there is a revision done a month or so later, sometimes later, when they crunch the actual numbers. The press rarely reports the revisions, but that is the most accurate. I advise you to ignore the initial reports and ONLY look at the later revised reports for a more accurate view. They indicate part-time, full-time, or foreign-born jobs, those are categories that matter. December jobs increase was fantastic, but let’s hold applause until we see what the revision later is.

— In my view, everything is about to get better with a reduction in Federal involvement in everything, delineated to the states, and reduction in Fed spending.

— Please say NO to Central Bank Digital Currency (CBDC) in any form (ie Fedcoin).

– Passive income from RE is a shield for most of this, whereas "flipping" and wholesaling can stop at any time.

**** We love “co-living” for amazing cash flow. Ask us about how we can help you retire with just 5 single-family houses.

Mortgage Applications & Rates

Because the current market relies HEAVILY on the CHANGE in mortgage rates, we’ve added this section.

Key Mortgage Stats:

30-Year Mortgage Rate: 6.89% as of February 6th, 2025 (previously 6.95%)

MBA Mortgage Applications: 2.20% as of January 31, 2025 (previously -2.00%)

The average rate on a 30-year fixed mortgage backed by Freddie Mac eased to 6.89% as of February 6th, declining for the third consecutive week from the highest level since early May 2024 of 7.04%. The decrease aligned with declining long-dated Treasury yields amid soft economic data, easing trade concerns, and market expectations of further interest rate cuts by the Federal Reserve.

“Mortgage rates have been stable over the last month and incoming data suggest the economy remains on firm footing. Even though rates are higher compared to last year, the last two weeks of purchase applications are modestly above what was seen a year ago, indicating some latent demand in the market,” said Sam Khater, Freddie Mac’s Chief Economist.

Source: Trading Economics

Mortgage applications in the US rose by 2.2% from the previous week in the last week of January, making up for the 2% drop in the previous period and extending the surge from earlier in the month, according to data from the Mortgage Bankers Association.

The slight increase was in line with the muted pullback in benchmark mortgage rates, which eased back to below the 7% threshold in the period amid the drop in long-term Treasury yields. Applications to refinance a home loan, which are more sensitive to short term changes in interest rates, jumped by 12% from the previous week. On the other hand, applications for a mortgage to buy a new home sank by 4%, underscoring muted housing demand at the start of the year.

Source: Trading Economics

United States MBA 30-Yr Mortgage Rate


Source: Trading Economics

Delinquency & Foreclosures

Understand the leading indicator of borrower stress. (It will lag behind a few weeks before the data is reported)

ICE First Look at Mortgage Performance: Delinquencies Ended 2024 on a Strong Note Despite Remaining Near a Three-Year High

  • The national delinquency rate eased 2 basis points (bps) to 3.72% in December, but rose 4.0% year over year – the seventh consecutive annual increase – ending 2024 near a three-year high

  • Early-stage delinquencies fell 41K (-3.6%) in the month, while serious delinquencies (loans 90+ days past due but not in active foreclosure) continued their slow climb – up 29K (+5.7%) in the month and a fifth consecutive rise year over year

  • Foreclosure sales declined by 5K (-5.6%) in December, hitting their lowest level in nearly two years, while foreclosure inventory climbed 7K (+3.8%), but was down -10.7% year-over-year

  • Despite rising in December on volatility around the holidays, foreclosure starts averaged 26,800 per month in 2024, down from 28,500 in 2023 and lower than any year outside the pandemic moratoria

  • Prepayment activity (measured by single-month mortality or SMM) fell to 0.57% on rising interest rates, down -9.8% in the month but up 47.2% from the same time last year

For more information about gaining access to ICE’s loan-level database, please send an email to
[email protected]
.

US Historical Foreclosure Activity and Rates

Population Growth

Top Ten Growing States

Top Ten Declining States

Transform your financial future with Fidelis Wealth Builders and iAccelerate.

Copyright 2025. Fidelis Wealth Builders. All Rights Reserved.