by Calculated Risk on 7/23/2025 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 0.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 18, 2025.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week and was 22 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 4 percent compared with the previous week and was 22 percent higher than the same week one year ago.

“The 30-year fixed mortgage rate edged higher last week to its highest level in four weeks at 6.84 percent, while rates for other loan types were mixed. Purchase applications finished the week higher, driven by conventional purchase loans, and continue to run ahead of last year’s pace,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “After reaching $460,000 in March 2025, the purchase loan amount has fallen to its lowest level since January 2025 to $426,700. With the 30-year fixed rate still too high to benefit many borrowers, refinance applications were down almost three percent for the week.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.84 percent from 6.82 percent, with points remaining unchanged at 0.62 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 22% year-over-year unadjusted. 

Red is a four-week average (blue is weekly).  

Purchase application activity is still depressed, but above the lows of October 2023 and slightly above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index decreased and remains very low.

Weekly Schedule

by Calculated Risk on 7/22/2025 07:28:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Wednesday:
• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 10:00 AM: Existing Home Sales for June from the National Association of Realtors (NAR). The consensus is for 4.00 million SAAR, down from 4.03 million last month.

• During the day: The AIA's Architecture Billings Index for June (a leading indicator for commercial and multi-family real estate).

by Calculated Risk on 7/22/2025 03:11:00 PM

This is something to watch again. Here is another update on lumber prices.

SPECIAL NOTE: The CME group discontinued the Random Length Lumber Futures contract on May 16, 2023.  I switched to a physically-delivered Lumber Futures contract that was started in August 2022.  Unfortunately, this impacts long term price comparisons since the new contract was priced about 24% higher than the old random length contract for the period when both contracts were available.

This graph shows CME random length framing futures through August 2022 (blue), and the new physically-delivered Lumber Futures (LBR) contract starting in August 2022 (Red).

On July 22, 2025, LBR was at $669.50 per 1,000 board feet, up 30% from a year ago.

Click on graph for larger image.

There is somewhat of a seasonal demand for lumber, and lumber prices frequently peak in the first half of the year.

The pickup in early 2018 was due to the Trump lumber tariffs in 2017.  There were huge increases during the pandemic due to a combination of supply constraints and a pickup in housing starts.  

by Calculated Risk on 7/22/2025 11:33:00 AM

There are four remaining FOMC meetings this year: July, September, October and December.  It is very unlikely that the FOMC will cut rates next week, but there are very different views on the rest of 2025.

First, from BofA:

With the u-rate rising more gradually in our new forecast and core PCE inflation likely to reach 3% over the summer, we don't think the Fed will be able to cut rates this year.

And from Goldman Sachs:

Starting in September, we expect the FOMC to deliver three consecutive 25bp cuts, provided inflation expectations remain in check amidst worries about Fed independence.

Currently, market participants expect rate cuts in September and December.

by Calculated Risk on 7/22/2025 08:43:00 AM

Today, in the Calculated Risk Real Estate Newsletter: California Home Sales Down Slightly YoY in June

A brief excerpt:

The NAR is scheduled to release June existing home sales on Wednesday, July 23rd at 10:00 AM ET. The consensus is for 4.00 million SAAR, down from 4.03 million last month.

Housing economist Tom Lawler expects the NAR to report sales at a seasonally adjusted annual rate (SAAR) of 3.92 million for June, down from May and down slightly year-over-year.

California reports Seasonally Adjusted (SA) sales and some measures of inventory whereas most of the local is Not Seasonally Adjusted (NSA).

From the California Association of Realtors® (C.A.R.): California home sales rebound in June, reversing three straight months of declines

June home sales activity rose 4.0 percent from the 254,190 homes sold in May and was down 0.3 percent from a year ago, when 264,960 homes were sold on an annualized basis. June’s rebound reversed three consecutive months of sales declines and was only one of two months of sales increases for the first half of 2025. The year-over-year decline marked the third straight decrease and was the first time since late 2023 that annual sales fell for three consecutive months.

There is much more in the article.

by Calculated Risk on 7/21/2025 07:44:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Move Slightly Lower to Start New Week

Mortgage rates didn't move much on Monday, but they moved in the right direction with the average lender 0.03% lower for a top tier 30yr fixed scenario versus last Friday. That makes this the 4th straight business day with a modest gain and it gets us back in line with the lowest rates since July 3rd.​ [30 year fixed 6.78%]
emphasis added

Tuesday:
• At 8:30 AM ET, Speech Fed Chair Jerome Powell, Opening Remarks, At the Integrated Review of the Capital Framework for Large Banks Conference, Washington, D.C.

• At 10:00 AM, Richmond Fed Survey of Manufacturing Activity for July.

by Calculated Risk on 7/21/2025 01:57:00 PM

Today, in the CalculatedRisk Real Estate Newsletter: NMHC on Apartments: Market conditions Tightened in Q2

Excerpt:

From the NMHC: Borrowing Conditions Continue to Improve While Most Respondents Report an Unchanged Market

The Market Tightness Index (54), Sales Volume Index (55) and Debt Financing Index (69) all came in above the breakeven level of 50, indicating improved conditions, while the Equity Financing Index remained just below 50 (48). Still, a majority of respondents for each of the four indexes reported unchanged conditions compared to April.

“Rent growth remains low in the South and West amidst a historic overhang of new supply, even though strong demand has kept absorptions high and occupancy stable,” noted NMHC’s Chief Economist and Senior Director of Research, Chris Bruen. “Meanwhile, tighter apartment conditions persist in the more supply-constrained Northeast and Midwest.”

“While high levels of political and economic uncertainty have kept some equity capital on the sidelines, survey respondents did report an uptick in transaction volume for the second consecutive quarter.”
...
• The Market Tightness Index came in at 54 this quarter – above the breakeven level of 50 – indicating tighter market conditions. Twenty-seven percent of respondents thought market conditions were tighter relative to three months ago, while 18% thought conditions had become looser. Slightly over half (54%) of respondents thought conditions were unchanged from April.

There is much more in the article.

by Calculated Risk on 7/21/2025 10:22:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Goldman's Mid-Year Housing Outlook

A brief excerpt:

Last Friday, Goldman Sachs Senior economist Ronnie Walker wrote: Mid-Year Housing Outlook: Slowing Construction and Price Growth, Not Just for Multifamily

Here are a few brief excerpts and my comments (CR):

Goldman on existing home sales: “Sustained higher mortgage rates will continue to have their most pronounced impact on housing turnover. 87% of mortgage borrowers have interest rates below current market rates, and 66% have rates 2pp below market rates, strongly disincentivizing them from moving. As a result, we expect annual existing home sales of just 4.1mn, 23% below 2019 levels but in line with the pace of the last two years.”

CR: Here is some data from the FHFA’s National Mortgage Database through Q1 2025 showing the distribution of interest rates on closed-end, fixed-rate 1-4 family mortgages outstanding at the end of each quarter since Q1 2013.

As of Q2, 71.3% of outstanding loans were under 5% (about 2%+ below current mortgage rates). These low existing mortgage rates make it financially difficult for homeowners to sell their homes and buy a new home since their monthly payments would increase sharply.

There is much more in the article.

by Calculated Risk on 7/21/2025 08:11:00 AM

Altos reports that active single-family inventory was up 1.2% week-over-week.

Inventory is now up 37.2% from the seasonal bottom in January.   Usually, inventory is up about 21% from the seasonal low by this week in the year.   So, 2025 is seeing a larger than normal increase in inventory.

The first graph shows the seasonal pattern for active single-family inventory since 2015.

Click on graph for larger image.

The red line is for 2025.  The black line is for 2019.  

Inventory was up 28.2% compared to the same week in 2024 (last week it was up 30.0%), and down 10.8% compared to the same week in 2019 (last week it was down 11.0%). 

It now appears inventory will be close to 2019 levels towards the end of 2025.

This second inventory graph is courtesy of Altos Research.

As of July 18th, inventory was at 857 thousand (7-day average), compared to 847 thousand the prior week. 

Mike Simonsen discusses this data and much more regularly on Youtube

by Calculated Risk on 7/20/2025 06:21:00 PM

Weekend:
• Schedule for Week of July 20, 2025

Monday:
• No major economic releases scheduled.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 2 and DOW futures are down 33 (fair value).

Oil prices were down over the last week with WTI futures at $67.34 per barrel and Brent at $69.28 per barrel. A year ago, WTI was at $81, and Brent was at $85 - so WTI oil prices are down about 17% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.09 per gallon. A year ago, prices were at $3.47 per gallon, so gasoline prices are down $0.38 year-over-year.