What to expect on home prices for the spring housing market

HousingWire

On today’s episode, Editor in Chief Sarah Wheeler talks with Lead Analyst Logan Mohtashami about inventory and home prices heading into the spring housing market.   Related to this episode:   Weekly pending home sales back to year-over-year growth as we head into spring  https://www.housingwire.com/articles/pending-sales-inventory-growth-2026/  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

00:09Welcome, everyone. My guest today is lead analyst Logan Motoshami to talk about housing data heading

00:15into the spring housing market and what we could expect on inventory and prices. Before we begin,

00:20I want to thank our sponsor, Trust & Will, for making this episode possible. Logan,

00:25welcome back to the podcast. It is wonderful to be here, Madam President. I am here to serve and

00:31give as many chart information as possible. Oh, my gosh. I have definitely gotten some feedback.

00:36It's very funny. Thank you all. Thank you all for your comments. Okay, so we have a pretty exciting

00:42thing to talk about today, and that's the spring home selling, home buying market. I just think of

00:46it as like the spring housing market, but we're coming into a spring housing market that hopefully

00:51we're better prepared for than we have been for the last couple of years. So we'd love

00:54to talk to you about what you're looking for in the spring. So this is going to be about prices

01:01going into the spring season. So, and for all of you that are Housing Wire subscribers, now we have

01:07Housing Wire Intelligence, right? You could go in there, kind of the tracker data line sets or

01:16any kind of data line sets you want there. If you wanted a visual of what's going on now,

01:20you have access to it. Your charts 24-7. Oh, my God. Logan 24-7. Charts 24-7. Spreads 24

01:27-7. It's

01:28great. So I encourage everyone to go in there and kind of play with the charts and take a look

01:34at

01:34everything. Of course, it's different with the Altos part of our business where we actually give you

01:40a very deep, detailed look, and then you can give it to your customers and clients. But Housing Wire

01:45Intelligence will be open to all subscribers. But now we're going to talk about prices.

01:50Prices going into 2026. And I always say that one of the reasons why I ask people for their forecasts

01:57and their models is I always want to backtest people to see if they're legitimate. And 99.9%

02:04people aren't legitimate because they want to get attention and do important sales. But in this

02:09regards, if you look at total active inventory in America right now on a historical basis, it looks

02:16still very low on that site. Monthly supply is not over six months. If you actually

02:24take the 1996 post model in the past, people used to say, well, if monthly supply is under six months,

02:31prices never fall. In theory, they are correct with that. But we like to give a little bit more

02:36detailed information because there are parts of the country where prices are falling, parts are higher.

02:40But in general context, that was the old model. Now we're in a what we call a post-QM world.

02:46Qualified

02:47mortgage came in in 2010. So the supply and demand equilibrium gets a little bit more interesting.

02:54But going back to 2024, 2024 price forecast was 2.33%. It's a little bit lower than everyone else's.

03:01And we do this tracker every single weekend so everyone can get a sense of what's really going on,

03:06like with real live fresh data, not just inventory, but inventory, sales, rates, everything.

03:12So I thought I was going to be right in 2024 because I never revised my forecast. I just let

03:17the tracker tell me if I'm right or wrong. But I knew when mortgage rates were getting down towards 6%.

03:22And I knew I was going to be wrong with my price forecast because our forward-looking data was

03:27getting better and our pricing was firming in the second half of the year, which rarely is the case.

03:32But it did. We ended up 4% for the year. So wrong on that. But then we went into

03:402025

03:41with kind of an elevated level of year-over-year growth. And I'm like, okay, 2025 forecast 1.77%.

03:49It's a little bit lower. This is back-to-back negative real home prices. I know you don't like

03:53negative real home prices. Why don't you like negative real home prices?

03:56I think because it doesn't make sense to me if prices are going up, but you're like,

04:00but real home prices are different than that.

04:03I know. I tell you, in 2019, I did an economic throwdown summit with Jessica,

04:10Dr. Laus from the NAR, and Stephen Thomas from Orange County, a professor. And I talked about

04:16negative real home prices. I had this big room. There's a picture of me, too, where it just-

04:21Oh, I'm sure there is.

04:22And I go, this is great news. And everybody looked at me like there was like two demon heads

04:29on my shoulders or something like, what are you talking about? And so, well, nominal home prices

04:34are up, but it's just adjusting to inflation. You can CPI inflation or rent inflation, however you want

04:41to use it. Prices are down just on that. But now, back in 2025, I thought because rates were elevated

04:51and inventory was up again, right? Inventory was up again, supply and demand equilibrium. We want to

04:56teach this, how it's done properly since the Peloponnesian War, so we can be the detective,

05:03not the troll. In that context, the year-over-year data needed to get really softer for me to be

05:11right. And it was getting softer. I just thought what happened last year is that a lot of an

05:15experience, a lot of people saw the month-to-month data being slightly negative and just went with

05:20that as it's 2008, it's worse than 2008. And then a lot of people assumed there was this massive

05:26amount of inventory, like we had more sellers than history. And all of a sudden, they ran with the

05:31seasonal weakness in pricing in 2025. And so many people talk about year-over-year declines. And

05:36what happened this last week? Case-Shiller, FHFA, December report, 1.8% FHFA, 1.3% Case-Shiller.

05:46The curve got better when, Sarah? When did the housing market change?

05:51Starting mid-June, last year.

05:53Mid-June. And now we are here, going into spring. So what do we know, reading the tracker data,

06:01reading the housing wire intelligence that people have access to? The growth rate of inventory has

06:07slowed a lot from that period of time last year. Last year, we were at 33%. And now the last

06:14number

06:14was just a tad under 10%. But it's still up. So 2026 forecast for me, negative 0.62%. So it's

06:23a very

06:23small decline on a nominal basis. So my thinking was that we're going to get another round of inventory.

06:31And I wasn't kind of into the rate being lower to start the year camp. And what is one thing

06:39that

06:39changed when the year started, Sarah?

06:42Well, we've had lower interest rates.

06:44We've had lower interest rates. But we had one variable that came in, mortgage spreads.

06:49Oh, yes.

06:49They made that announcement. And all of a sudden, the spreads got like traders got very ahead of

06:55the curve. So mortgage spreads got a little bit better. Now, I was looking for it to get back to

07:00normal, but toward the end of the year, not early. So I've already lost that rate variable. Why is that

07:06important? Because what's happened is that the growth rate of inventory has slowed and demand has picked

07:12up. If you read the tracker, weekly pending sales data, we had a little slowdown on the snow, but

07:18that looks out 30 to 60 days. A lot of people saw the purchase application data. They said purchase

07:23application data is down. This is not true. It's actually positive year over year, every single

07:29week this year. And we're not working from a low bar. So the price cut percentage has fallen on a

07:37year

07:37of your basis. That hasn't happened in a while. So it doesn't look like my forecast is going to be

07:44right if that continues and demand picks up even more going out. So this is something that we all

07:50keep a track of because we have good history with this late 2022, 2023, 2024, 2020. And if you can

07:58teach

07:59the supply and demand equilibrium, right, then everyone starts to understand it because it's very rare

08:05in history for inventory to go vertical, that you would have such a spike in inventory with no

08:11demand or demand falling. That did happen in one period of time in recent history. That was 2005 to

08:172008, right? And you had distressed sales ready to come on the system. That was an anomaly in the

08:24history of U.S. economics right there. A hundred years go by. That hardly ever happens, but that was a

08:29credit boom, credit bust. Now it's very nitty gritty. It's just like, you know, just like in

08:36a mud fight trying to get all the data, but that's what the tracker is designed to do to clear

08:41up. And

08:41now everyone, you know, you could get it for your own zip code, your city and everything. You could be

08:45ahead of the curve on everyone else. And then you could ignore all the noise out there. And that's

08:51the beauty of numbers. Sarah, why do we love numbers? Ah, yes, because you say they're the closest

08:56thing to the handwriting of God, right? Isn't that your, that's your phrase? Yes, it is the closest

09:00thing to the handwriting of God. So I really love that you're bringing up the housing wire

09:05intelligence because this is a really big difference. This is a big deal. We've had all

09:09this data. We're now packaging that data in a way that people can access really easily. That's very

09:15particular to them. And if you guys are not subscribers, go to housingwire.com, become a

09:20subscriber. There's so many benefits. One of them, you get to read the tracker every week and you can see

09:24all of it and, and all this broken out. But Logan, I wanted to ask you about that price cut

09:30percentage that we look at every single week. We know that last year it got as high as 40%

09:36that homes that went on the market. Over 40%, yes. That homes on the market had to take a price

09:42cut

09:43before they sold. And now we're down to like 30%. So that's a pretty big difference. Well, here's the

09:49thing. The price cut percentage data is also seasonal. It kind of has the seasonal decline

09:55going into the spring season, and then it has its seasonal increase. So the year over year data

10:00becomes valuable in analyzing that. A really good example. So when we, when we do our tracker articles,

10:07if you could see what, what do we love about the tracker, the slope of the curve, right? So what

10:12happened was 2022 was crazy. Like, like 2022 was like three housing cycles put into one year. It

10:19was like a play. It was just, it was like, I I'm going to go to my grave thinking that

10:24was just

10:25absolutely nuts. But if you're a data person, you're just like, wow, you got to really get that. And

10:31we were at a teenager level in early 2022. That was the savagely unhealthy housing market. That was in

10:37February where I said, we got to blow this thing up because this is going to have another 18 to

10:4020%

10:41year if rates don't go up higher. But when rates shot up as much as the slope of that curve,

10:47the

10:47price cut percentage really accelerated a high because we went from 3% to 7% all in one year.

10:54So everybody that was in the marketplace was like, whoa, you know, things had to move fast. But then

11:00what happened is in the second half of 2022 new listings data, which is very seasonal as well. It

11:05started to decline on a year of year basis. A lot of people said, I'm not going to do it

11:10in this

11:11marketplace. And it makes sense if you believe that 70 to 80% of home sellers or buyers.

11:16So what I was really happy about with the tracker articles last two weeks is that the new listings

11:21data is picked up again, right? Weekly pending contracts picked up again. We have year over

11:25year growth in pending contracts. And we have year over year growth in new listings, purchase

11:29application data on a year of year basis, two weeks ago, 8% year over year growth, 12%. So we're

11:34getting the flow of the data. And of course, every city, every state, every zip codes, my job is to

11:39teach

11:39the economics because all housing data revolves around general economic movement, which is really

11:45what the 10 year yield and the spread is doing. This is why we want to teach everybody all of

11:50it

11:50together so it can make sense. So going into this year, it's really going to see how much can inventory

11:57grow? Are there going to be some weeks that we see negative inventory? I know there's parts of

12:01Florida that inventory is down year over year. But is that going to happen in the national data?

12:07If you look at the slope of the curve and rates now 6% this morning, you know, there are

12:12going to be

12:13some periods where we might have negative year over year inventory, but we are elevated. We're no

12:18longer in that 2022 or 2023 market or 2024 market 2025 and 2026. That's the inventory channel that we're

12:27working with, right? And then we're going to see what rates and demand and everything. And remember,

12:31this thing looks out in the forward. We'll be like two, three months ahead of the NAR. We're always going

12:36to

12:36be three to six months ahead of the Case Shiller Index. So this way we get an idea. But so

12:42far this year,

12:43very normal year, but better because as buyers were sellers, right? Logan Doctrine, balance, right? We go into

12:51this, a fight, right? A legit fight between sellers and buyers. And then when that seller sells a house, that

12:56seller then becomes a buyer and then deals with a seller on all sides. And it's this beautiful symphony, like

13:01a

13:01Hans Zimmer symphony of housing economics. And you can get the tracker every weekend. You can listen to

13:06our podcast. Now you're on housing wire intelligence. You got also stated, you have so much access where

13:122000 years ago, the chart daddy had a really, really long white beard and they put me in a dungeon.

13:17I was

13:17reading scrolls and there wasn't no Tik TOK or Instagram or anything like this. It wasn't a lot of

13:22fun. You know, there's sometimes give me some bread and water, you know, on occasion, but

13:27it's such an exciting time to be alive with all this access to data out here.

13:32I think what we see too, first of all, hilarious, that whole description. But also I think what I

13:38see where people get it wrong, we know that there are, you know, doomers who will always get wrong.

13:42What I see is that the mainstream press that might be accurate on other things when it comes to housing,

13:48because they don't have the background, because they don't have that full picture of all the things

13:52you're talking about. They'll see one data line and they run with it and, and, you know, say all

13:58these things that you're like, that's just not right. And it's good for people in our industry

14:01to know these things from you, from this podcast, from the tracker, so that they can interpret it for

14:07all their clients who are seeing that mainstream message of like whatever that might be.

14:12Yeah. And, and, you know, this is why, this is why the tracker was, remember, remember how I was

14:16like, Oh, we're going to start the tracker. It's November, December of 2022. Things are changing. We need to,

14:21you know, but a really good example is, you know, we, we see these articles from time to time. Oh

14:27my God.

14:28And the alone that was in a, that created the housing bubble crisis is back into vogue, you know?

14:35So the author of the article, wall street journal or something like that would say this arm product

14:41is something that created the housing bubble crash back then. Well, they just don't have the background

14:47to know that after qualified mortgage, those things are all gone. They are not coming back nor will

14:53they, or can they come back? So if the person knew what qualified mortgage was, he wouldn't make that

14:58statement. So the, it's interesting because the arm loan rates are actually coming, you know, in the low

15:03fives for some products. So now people have access to that. So again, our job is to take the numbers

15:08and try

15:09to make it sense. And that's what the tracker is here to do for all of you to read, but

15:12now you can go to

15:12housing wire intelligence and, and you can get your own altos data for your own area. And this is the

15:17beauty. Just follow the data, follow the numbers, forget the person, forget the individual. A person

15:23should be modeled based on their own models of what they're talking about. And that's the slope of the

15:27curve out here. So I think it's a good, great, healthy tug of war going into spring. And I'm really

15:33excited because rates are lower inventories up price growth is cooling down and it's an authentic battle

15:40for something that is just simply shelter. You know what, Logan, I love when we can talk about

15:45how, you know, things are getting back to normal or we're heading into a really busy home buying season

15:50with good data, with, with good demand, with good inventory, or at least with, with average or normal

15:56inventory. So this is a very positive story in my opinion, especially compared to the last couple of

16:01years. Slow and steady wins the race center. Slow and steady wins the race, right? Balance is a good

16:06thing in that regard. So hopefully now with all the data that everyone gets to see and reads the

16:11charts, it starts to make more and more sense. And I, I'm so glad to find out that, you know,

16:18the team higher rate model actually worked and now buyers feel like they could get in there and not,

16:23you know, be totally bully balled around by sellers anymore. Love it. Okay. Well,

16:28we're going to end there. I will talk to you again soon. Thank you so much. Pleasure.

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