Stocks and Mortgage Bonds are both higher to start the week. It’s an important week ahead, highlighted by the Fed’s two-day meeting that kicks off tomorrow and ends on Wednesday. The Fed will be releasing their statement at 2:00pm ET on Wednesday, along with their SEP (Summary of Economic Projections), which will show an update on their forecast for inflation, the unemployment rate, GDP, and their Fed Funds Rate. Additionally, Jerome Powell will do a press conference around 2:30pm ET.
While there is likely a 0% chance the Fed cuts, their commentary and thoughts on the economy, tariffs, inflation, and the labor market will be important.
Oil prices are sharply lower after spiking to over $77/barrel according to WTI after the Israel & Iran conflict. WTI has moved down to around $68/barrel, near where it was before the conflict began. Helping things are reports that they are not going to shut the Strait of Hormuz because China needs oil, and that the US does not want Israel to attack Kharg Island where most of the Iranian oil exports come from. Of course the reason is that it would cause oil prices to surge and cause inflation to rise significantly. When will the conflict end? It appears the main objective of Israel’s mission that is left is to target Fordow, which is one of the main nuclear facilities in Iran.
Last week, we refuted the Redfin chart that got a lot of attention, showing that there were 500,000 more sellers than buyers…sounds bad. Their efforts were successful, as it got a lot of attention and the story was picked up by the WSJ on Saturday. So, expect more media outlets to cover it and for more of your Realtors and customers to see it. Below we have revisited this and broke it down further.
Housing Misinformation
The Redfin chart, showing that there are 500,000 more sellers than buyers in today’s market, is inaccurate and is designed to strike fear in the hearts of consumers. The source for this was Chen Zhao, Redfin’s Head of Economic Research. Remember that name, as it will be important when we talk about home price appreciation forecasts.
They claim that there are 1.943 million sellers, which they say is their active listings figure that they get from the MLS (Multiple Listing Service). What doesn’t make sense is how different this is from Realtor.com’s active listings figure, which was only 959,000 in April, the same month Redfin reported the 1.943 million. Realtor.com also claims to get their data directly from the MLS.
The National Association of Realtors reported that total existing inventory is 1,450,000…but about 400,000 of those homes are under contract. Even if you were to add the total new homes for sale from builders, it would add 504,000. Many of those are also under contract, but it still would not get you to Redfin’s number. Additionally, many of those homes are like selling air and are not even started or completed. Total completed new inventory, which is actually available, is only 117,000.
Any way you slice it, Redfin’s figures do not make sense and it appears Realtor.com’s data is more representative of what is actually available and the true number of sellers.
Redfin also came up with a number of buyers in today’s market, but they clearly state, “Because there is not a similar metric measuring how many buyers are actively in the market, we developed one. We took active listings and pending sales from the MLS to estimate what fraction of homes on the market will sell within a given month. Analogously, we estimated what fraction of buyers on the market will find a home within a given month using Redfin data on the typical time from first tour to purchase. The ratio of these two data points approximates the ratio of buyers to sellers in the market. We then multiplied that ratio by the number of active listings to get the estimated total number of buyers in the market.”
What this means is that they created their own ratio because it’s impossible to know how many buyers there are in the market at any given time…but it’s wrong.
Fannie Mae and Pulsenomics Home Price Expectations Survey
We partake in the Fannie Mae and Pulsenomics housing survey, where we have won the Crystal Ball Award four times for the most accurate real estate forecasts in the US, including last year.
The latest data from the top 150 economists in the US was just released, showing the median forecast for home price appreciation is as follows, with the impact on a $500,000 in parenthesis:
2025: 3.4% ($17,000 gain)
Next 5 years Cumulatively: 19% ($95,000)
Interestingly, Chen Zhao, who shared the Redfin data on 500,000 more sellers than buyers, is forecasting only a 1% decline in 2025, followed by a flat year in 2026, and 1% gains in the subsequent three years.
If there were indeed 500,000 more sellers than buyers, her forecast would likely be much worse than -1% this year…she likely doesn’t believe the data herself or it was indeed used as clickbait.
Bottom line – Make sure you address this and help your clients and Realtors. There is a lot of misinformation out there that can scare them out of buying a home. Make sure to quantify the median forecast for home values from the top 150 economists in the US.
News This Week
Monday: 20-year Bond Auction 1:00pm ET
Tuesday: Retail Sales, Industrial Production & Capacity Utilization, NAHB Housing Market Index
Wednesday: Mortgage Apps, Initial Jobless Claims, Housing Starts, Fed Meeting with SEP
Thursday: Market Closed for Juneteenth Holiday
Technical Analysis
Mortgage Bonds have managed to break back above the 50-day Moving Average and are now right up against the 100-day, which is a nice change from earlier this morning, where Bonds were under the 50-day.
The 10-year is trading in a range between support at the 100-day Moving Average and overhead resistance at the 25-day Moving Average.
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