Existing home sales and housing demand

HousingWire

On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about existing home sales and housing demand.   Related to this episode:   Existing home sales rise in November as mortgage rates dip  https://www.housingwire.com/articles/november-home-sales-rise/  HousingWire | YouTube⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠  https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q  More info about HousingWire  https://lnk.bio/housingwire   To learn more about Trust & Will visit trustandwill.com   The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate.

Transcript

00:00Welcome, everyone. My guest today is lead analyst Logan Motoshami to talk about existing home sales

00:11and where we are as we end 2025 and look at 2026. Before we dive in, I want to say thank

00:17you to our sponsor, Trust in Will, for making this episode possible. Logan, welcome back to

00:22this festive episode of the HousingWire Daily Podcast. It's Christmas week, homies, and I am

00:29the gangster rapper, my token gangster rapper that I bring out once a year for this. And

00:38happy Monday. This podcast was done Friday morning, and we're just going to primarily focus on the

00:44existing home sales report and what's really going on and prices and everything. So a very

00:50interesting week, but let's dive into that one. Let's talk about existing home sales. What

00:55happened? So I would say this. I had a very, very good question asked like 30 minutes before I came

01:02on this podcast. And a gentleman asked, said, you know, home prices are not negative on any of the

01:10year-over-year data. So what are certain people talking about? And the Case-Shiller Index that he

01:16was talking about, and this is a good way to explain this. If you look at the Case-Shiller Index, the year

01:21over-year growth is slowing down. And one of the things that I got wrong in 2025 is that because

01:28last year, home prices were acting much stronger than normal, I lost my 2024 forecast because of that,

01:35because I could see it in our weekly data that eventually it's going to hit. So our year-over-year

01:40comps were very difficult. And because of that, the year-over-year growth and a lot of data slowing down

01:46because of the comps, but I was anticipating negative already. Like December is going to be

01:51a really, really hard comp to be even positive. But with that said, every single month this year

01:59in 2025 was positive year-over-year with the NAR median sales price index. But if you're talking

02:05about the Case-Shiller, the gentleman is correct. You are seeing the curve is starting to turn on the

02:10year-over-year data. But what you really want to do is look at the month-to-month. Go find any Case-Shiller

02:17data chart. Do the month-to-month and make it a bar chart. And what had happened is in the last six

02:23months, the data started firming up and nobody wanted to talk about it. In any case, it's now gone

02:30positive on the 2010 and national index, right? And that's the curve that you're starting to see on the

02:38year-over-year data, right? It's no longer kind of a big deal. And again, I thought we'd have a few

02:44negative prints. But again, just like last year, mortgage rates got down towards six. Demand

02:50started picking up. And because of that, the supply and demand equilibrium changes. Now we're just seeing

02:55it in the data. And I don't know how many people focus on the year-over-year comp story. And that's

03:02why we still haven't had negative year-over-year data. It was something that I was looking for.

03:06The forward-looking data started to affirm. When? When did the market change, Sarah Wheeler?

03:11Mid-June.

03:12Mid-June. What happened if the existing home sales report was shown in a bar graph? Oh,

03:18my dear Lord. It bottomed yearly in June. And it slowly started to move up after that.

03:27I think this is really interesting because I looked at one graph, couldn't see it. And then you showed me

03:31like, if you look on the bar graph, you can see it. You can see the slope. You can see where it

03:35goes up. It makes it easier in that cases. And just like the Case-Shiller index on the month-to-month,

03:40a lot of people were forwarding the month-to-month data being negative. But remember,

03:43we were working from an elevated level from December. So one of the reasons why I had real

03:48home prices be negative, only 1.77% nominal, is that I did not think that level could maintain

03:54itself, especially with elevated rates. So I needed the data to stay weaker and weaker and weaker,

03:59weaker. But mid-June, things change and voila, there you go. And this is why having a live

04:05weekly model so you know when something's turning, you don't wait until December 19th to kind of,

04:12oh, what happened, you know, out there. So it looks kind of, everything kind of looks right if you

04:17just kind of follow the trendline data. But yeah, we have now officially 200,000 more home sales

04:25from the bottom of June. And that goes in line with other years where rates head down towards

04:336%. We get a couple hundred thousand more home sales. How does it compare to last year? Was last

04:37year more home sales? Last year, we had eight. See, last year, the forward-looking data, oddly enough,

04:44the forward-looking data was better. And part of that is that within an 18-week period,

04:52we had 12 positive week-to-weeks, five negative one flats. We hardly had any positive year-over-year

05:00data. Because of that, people thought home sales were falling. They weren't. They were getting

05:04better. So we had a couple hundred thousand more home sales last year as well. It just picked up

05:08during that. This year, we haven't had 12 positive week-to-weeks data, but we've had positive trends

05:16and we've had a positive year-over-year combined. That's what you really want to see, right? Again,

05:21purchase apps also look out 30 to 90 days out in the future. And our forward-looking pending sales

05:28data are at multi-year highs. So those things look out 30 to 60 days between the existing home sales.

05:33So they kind of all, if you put late 2022, 2023, 2024, and 2025, they all kind of make sense if you

05:41have a proper way to track things. So it's not shocking that we got a little bit more, a couple

05:45hundred thousand more home sales from the lows in June.

05:49Okay. So explain it to me like I'm five or maybe 10, maybe 10. What does this mean as far as demand?

05:55Demand just picked up a little bit more. That's what's out. And the key is the difference between

06:00this year and last year is last year rates were heading towards 7%, got to 7.25. This year,

06:06you know, the 10-year yield, last time I checked was, you know, Friday morning was 4.13, you know,

06:14something. But mortgage rates are near the yearly lows this year. Where last year, things already

06:20shot up. We're already, you know, spreads weren't as good last year as it was right now. Whole

06:26different ballgame. So the question is, can the duration curve of rates stay low going all the way

06:33until spring? Because we have not had that. Now in late 2022, we had mortgage rates, or late 22,

06:41getting into 2023, we had 5.99% mortgage rates early 23 before rates shot up. And they shot up

06:47vertically and they went above 7%, eventually getting up to 8% in 2020. So that's not going to work.

06:55Last year, rates got up to 7.5, went all the way down to 6.21, and then started the year,

07:00you know, the high point was 7.25. But can we have the first official test of near 6% rates for at

07:08least a year? It's, for right now, it's still working, right? But last year, that wasn't the

07:14case. This year it is. And everything gets more interesting in 2026 with who's going to be the

07:19next Fed chair and all that. But for right now, it's fine. You know, everything, everything looks,

07:24everything looks good in that sense. And that's what we talked about on the last podcast,

07:27right? It's like, where do we think rates are going to go? This is the last economic report

07:33we get for the year, correct? For housing? Yeah, we still don't have any housing permits

07:37or starts or new home sales. So we're waiting to get that. But this is the last existing home sales

07:43report. Purchase apps or private data. So we get that. Again, the last two weeks of December,

07:48everyone should just count everything out out of the books, like, you know, because just,

07:51you know, holidays really mess up. This is the ultimate holiday two-week period. But

07:55it looked fine. It looked, you know, inventory growth. The seasonal decline for the NAR is a

08:03little bit different than ours. So inventory declining looks pretty normal. That's nothing.

08:09We'll get another decline in the month of December. That report will come out in January.

08:14But considering what everything we had to deal with this year, it looks like pretty normal compared

08:20to the last few years. But rates just getting down. Once rates get below 6.64, head to 6,

08:25you could get a positive demand curve. So the question is, can this hold for 2026? Because we

08:32do not have negative curving data when rates are near 6%. We've only had positive with taxes,

08:38with insurance, with prices and everything. But price growth has slowed down the last two years,

08:43positive. Inventory is up because of that positive. It's just a much healthier backdrop going into

08:502026. And we have one more report for the month of December. That'll come out in January. And then

08:54we just, we'll take it from there. And you are going to do, so next week, we're going to do your

08:582025 wrap and the 2026 forecast. You're publishing that next week. And we will do-

09:04My forecast will come at the very last day. I know.

09:08It'll come in the very last day. And it's always going to come at the very last day. So we could do

09:12everything. But I could say this, 2025, it looks good. Housing has become a very complicated

09:20discussion because you look at the new home sales sector. So one year ago at this time, we said,

09:25oh boy, the builders are in a supply and demand issue right now. Why? Because completed units are

09:30at elevated levels. But the last new home sales report was at a three-year high, right? So the

09:35supply and demand equilibrium work a little bit different for the new home sales sector. Of course,

09:38residential construction jobs, they're back to pre-COVID highs again. So that's a very complicated

09:45discussion. And I do feel sorry for people that just, they just don't follow it enough. But I

09:52totally get the confusion around the new home sales sector because they're still at 2019 sales levels.

09:56Their last report was a three-year high, but permits are at recession levels. But in this context,

10:02the existing home sales report is a little bit more stable. The inventory channels are very

10:08stable because it's authentic inventory. It's just inventory. And then those are in contract

10:12where the builders are homes that haven't even started construction yet, homes that are in

10:17construction and homes that are completed units for sale. So two different, that's why we always

10:23keep them apart. What were the rules? Right. You don't, you do not cross those streams.

10:29New home sales. That's right. Well, it's nice that it's nice that on the, on the week of Christmas,

10:36things are stable in the housing market. Are they booming? No, but are they crashing? No. And we have

10:43some positive signs going into 2026 and we have some positive signs even this week. So I, I'm going to

10:48take it. Take it because it's for the right reason. Right. It's been lower. The duration of the rate

10:55curve is lower. Demand is picked up. Anybody who tracks housing data would know this. It's funny

11:00because we're, we're, we did these live videos because there's a, these new, these new kids on

11:05the block, man, they're, they're like, they're, they're not housing 2008 people. They're worse

11:09than housing 2008. So we did an inventory channel run, uh, uh, visually for people to see. Of course,

11:15in 2007, active inventory is 4 million. Today is 1.43, uh, uh, monthly supply at the peak,

11:21you know, was that 10.8 months is 4.2 distress sales. Foreclosures were rising in 2005, six,

11:28seven, and eight. We're pretty much near all time lows. So the, for the people that say they

11:33lived through 2008 and now this is worse than 2008, the ability to read and visually see data

11:40is so apparent now that you have to question the motives of people who say, this is worse.

11:47Not 2008, 2008 is a zero hedge guys who, you know, have issues with this. Y'all go into the worst

11:54than 2008 and it's 2023, 2024, 2025. You tag that. I encourage everyone to do this. Take these three

12:03years versus 2006, 2007, and 2008. There's no comparison. Your inventory data, yo, you got to

12:11show visuals. I'm assuming people can't read. So if you can't read, at least if you're not blind,

12:18you could visually see the inventory curve channels are different and the credit markets were different.

12:22So we're going to end the year off. Okay. Go, go look at our tracker. Our tracker shows you on all

12:29those different points. And especially on inventory, you're like, Hey, this same week last year, uh,

12:34what the inventory is this year, same week last year. And then you, you, uh, compare it to what was

12:39happening at this time in, in 2008. It is so crazy and such a stark difference. And we should all be

12:45very happy that we're in a much better place. It is the new listings data, which these people don't

12:50have. They never have. It is the irony that during that period of time, new listings data was running

12:56last report. Was it 42,500, 42,500 new listings for the per week. And then during that time,

13:06it was 268 one year, it was 348 another year. It was 303. We're running five times. These are

13:13per week per, I mean, Oh my dear Lord, even if I could, I could forgive somebody if they can't read,

13:20but just visually see, like, that's why we do the crayon charts. We do crayon charts because I'm

13:25assuming that there's people who can't read, but you can visually see the crayon charts because they're

13:30so apparent, but in any case, existing home sales look fine, you know, and, uh, again, we'll,

13:36we'll track everything through the weekly data, but I encourage everybody. You could go see the bar

13:41graph of existing home sales. It bottomed mid June, and then it's slowly perked up. And what happened?

13:48Rates fell weekly for looking demand got better. This is why we have the weekend tracker for everyone.

13:54So you could be up to verse with current data looking forward. You don't want to be three to six

13:59months behind. Oh man. I remember people talking in June. Woo. Oh my, there are a second. They're

14:05like, Logan homie. You don't know what you're talking about. Redfin says it's the highest

14:09inventory versus seller values gap in history. There's the highest cancellation razor. D listings.

14:14Oh my God. I'm like, okay, that's cute. Don't worry about it. I'll see you in December.

14:18And all of a sudden, everybody's just, I mean, you've got some crazy cats out there yapping

14:27their mouths off. Can't want to do forecasts or anything, but my job, let's bring the data

14:33out and connect the dots. And that's why the existing home sales look like this.

14:37That is what we're going to be doing. We're going to be doing this all this week, all next

14:41week. Um, got some special things planned. We have an unplugged this week. We have a Logan's

14:46special episode on his forecast next week. So stay tuned. And of course, go, uh, uh, sign

14:52up for the housing economic summit too. I know those prices rise all the time. So like get

14:57in at a, at a great price for the most amazing economic content. And Logan, we will talk to

15:02you soon. Pleasure, Sarah.

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