by Calculated Risk on 10/21/2025 07:58:00 PM

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

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

• During the day, The AIA/Deltek's Architecture Billings Index for September (a leading indicator for commercial real estate).

by Calculated Risk on 10/21/2025 03:46:00 PM

Here are a few photos from my trip to Patagonia:

Click on graph for larger image.

The first photo is at Cape Horn with a friend since high school. 

We were lucky to able to go ashore!

The albatross is a memorial to all the sailors that lost their lives sailing around the Cape.

Here is a poem on a plaque near the monument.

"I am the albatross that awaits you at the end of the world.
I am the forgotten souls of dead mariners who crossed Cape Horn from every sea on Earth.
But they did not die in the raging waves; today they fly on my wings toward eternity, in the last crevice of the Antarctic winds."
by Sara Vial

The second photo is at Torres del Paine National Park.

This shows the granite towers and horns.

The "horns" are sedimentary rock (black) on top of granite (gray).

The park is known for ferocious wind gusts - and it did not disappoint!

The third photo is also at Torres del Paine National Park.

This is at Gray Glacier Lake.

This lake is known for the bright blue icebergs - and there was a large one close to shore when we arrived.

"Paine" means blue in the indigenous language, so the park is named after the towers and the amazing blue lakes.

The wind was gusting up to 85 knots when I took this photo. You had to lean into the winds at times.

A great trip!

by Calculated Risk on 10/21/2025 12:19:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Lawler: Early Read on September Existing Home Sales, and Update on MBS Yields and Spreads

A brief excerpt:

From housing economist Tom Lawler:

Early Read on Existing Home Sales in September

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 4.00 million in September, unchanged from August’s preliminary pace (which looked too high relative to state and local realtor data) and up 2.6% last September’s seasonally adjusted pace. Unadjusted sales should show a larger YOY % increase, reflecting this September’s higher business day count relative to last September’s.

Local realtor/MLS reports suggest that the median existing single-family home sales price last month was up by about 2.2% from a year earlier.

CR Note: The NAR is scheduled to release September Existing Home sales on Thursday, October 23rd at 10:00 AM. The consensus is for the NAR to report sales of 4.06 million SAAR. Last year, the NAR reported sales in September 2024 at 3.90 million SAAR.

There is also an update on MBS Yields and Spreads in the article.

by Calculated Risk on 10/21/2025 11:31:00 AM

Catching up ...

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 37, up from 32 last month. Any number below 50 indicates that more builders view sales conditions as poor than good.

From the NAHB: Amid Market Challenges, Builder Expectations Rise in October

Even as builders continue to grapple with market and macroeconomic uncertainty, sentiment levels posted a solid gain in October as future sales expectations surpassed the 50-point breakeven mark for the first time since last January.

Builder confidence in the market for newly built single-family homes was 37 in October, up five points from September and the highest reading since April, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today.

“While recent declines for mortgage rates are an encouraging sign for affordability conditions, the market remains challenging,” said NAHB Chairman Buddy Hughes, a home builder and developer from Lexington, N.C. “The housing market has some areas with firm demand, including smaller builders shifting to remodeling and ongoing solid conditions for the luxury market. However, most home buyers are still on the sidelines, waiting for mortgage rates to move lower.”

“The HMI gain in October is a positive signal for 2026 as our forecast is for single-family housing starts to gain ground next year,” said NAHB Chief Economist Robert Dietz. “The 30-year fixed-rate mortgage fell from just above 6.5% at the start of September to 6.3% in early October. Combined with anticipated further easing by the Fed, builders expect a slightly improving sales environment, albeit one in which persistent supply-side cost factors remain a challenge.”

With the government shutdown continuing and an expectation of no Census housing construction data for September being published this week, Dietz noted the following: “Based on modeling of historical data, the October increase for the HMI suggests an approximate 3% increase for the September single-family permit data on a seasonally adjusted annual rate basis. Our model suggests a 2% to 4% range for the increase based on the statistical relationship.”

In a sign of ongoing challenges for the housing market, the latest HMI survey also revealed that 38% of builders reported cutting prices in October. This share has alternated between 37% and 39% since June. Meanwhile, the average price reduction rose to 6% in October after averaging 5% for several months previously. The last time builders reduced prices by 6% was a year ago in October 2024. The use of sales incentives was 65% in October, unchanged from September.
...
All the HMI subindices rose in October. The component measuring current sales conditions increased four points to 38, the index gauging future sales jumped nine points to 54 and the gauge charting traffic of prospective buyers posted a four-point gain to 25.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose two points to 46, the Midwest was unchanged at 42, the South increased two points to 31 and the West gained two points to 28.
emphasis added

Click on graph for larger image.

This graph shows the NAHB index since Jan 1985.

The index has been below 50 for eighteen consecutive months.

by Calculated Risk on 10/21/2025 08:47:00 AM

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

The first graph is the monthly data (with a strong seasonal pattern for imports).

Click on graph for larger image.

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday and then decline sharply and bottom in the Winter depending on the timing of the Chinese New Year.  

Imports were down 7% YoY in September, and exports were down 2% YoY.    

To remove the strong seasonal component for inbound traffic, the second graph shows the rolling 12-month average.

On a rolling 12-month basis, inbound traffic decreased 0.6% in September compared to the rolling 12 months ending the previous month.   

Outbound traffic decreased 0.1% compared to the rolling 12 months ending the previous month.

This is the 10th consecutive month with exports down YoY.

by Calculated Risk on 10/20/2025 07:13:00 PM

From Matthew Graham at Mortgage News Daily: Another Boring Day With Mortgage Rates Near 3-Year Lows

[W]e're hanging out near 3 year lows with minimal volatility. In order to see sharper, more sustained momentum, we'd likely need the government shutdown to end. That would allow the most consequential economic reports (like the jobs report) to be released. It would also allow data collection to resume for future jobs reports.

Between now and then, there is other data to guide the rate market, but it's just not as heavy hitting. This week is particularly light in that regard, but there's one exception. The BLS received an exception to compile September's CPI inflation data, to be released this Friday. It's not quite on par with the jobs report, but it can certainly get rates moving (for better or worse, depending on the details). [30 year fixed 6.22%]
emphasis added

Tuesday:
• No major economic releases scheduled.

by Calculated Risk on 10/20/2025 01:43:00 PM

Today, in the Calculated Risk Real Estate Newsletter: California Home Sales Up 6.6% Year-over-year SAAR in September

A brief excerpt:

The NAR is scheduled to release September Existing Home sales on Thursday, October 24th at 10:00 AM. The consensus is for the NAR to report sales of 4.06 million SAAR. Last year, the NAR reported sales in September 2024 at 3.90 million SAAR.

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 September with modest monthly and annual gains, C.A.R. says

After five consecutive months of year-over-year declines, September home sales activity climbed 5 percent from the 264,240 homes sold in August and rose 6.6 percent from a year ago, when 260,340 homes were sold on an annualized basis. September marked the 36th straight month in which the seasonally adjusted sales rate remained below the 300,000 benchmark. ...

This is in line with national sales being up year-over-year.

There is much more in the article.

by Calculated Risk on 10/20/2025 11:36:00 AM

Altos reports that active single-family inventory was up 0.3% week-over-week.  Inventory usually starts to decline in the fall and then declines sharply during the holiday season.

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 16.1% compared to the same week in 2024 (last week it was up 17.0%), and down 8.1% compared to the same week in 2019 (last week it was down 9.5%). 

Inventory started 2025 down 22% compared to 2019.  Inventory has closed more than half of that gap, but it appears inventory will still be below 2019 levels at the end of 2025.

This second inventory graph is courtesy of Altos Research.

As of October 17th, inventory was at 859 thousand (7-day average), compared to 857 thousand the prior week. 

Mike Simonsen discusses this data and much more regularly on YouTube

by Calculated Risk on 10/19/2025 08:16:00 AM

Note: CR is on vacation until Oct 21st.

This is the 21st year I've been writing this blog!

Starting in January 2005, I was very bearish on housing - and in early 2007, I predicted a recession.

However in 2009 I became more optimistic. For example, in February 2009, I wrote: Looking for the Sun (Note: that post shocked many readers since I had been very bearish).

A few years later, in early 2012, when many people were still bearish on housing, I called the bottom for housing: The Housing Bottom is Here

Then I spent a number of years arguing against the recession callers, and the new housing bubble calls. A few examples:

In 2015, I wrote The Endless Parade of Recession Calls

For the last 6+ years, there have been an endless parade of incorrect recession calls. The most reported was probably the multiple recession calls from ECRI in 2011 and 2012.
...
I disagreed with that call in 2011; I wasn't even on recession watch!

And I updated that post several times.

And on housing, over seven years ago, in January 2018, I was quoted in a Bloomberg article:

Bill McBride, who runs the Calculated Risk blog and also called the crash, doesn’t think home prices are inflated this time around. Unlike in 2005, lenders are acting responsibly and the Wild West of real estate speculation hasn’t returned, he said. There is less to speculate on, too. Compared with the overbuilding that preceded the bust, today’s pace of construction isn’t fast enough, he said.

“Lending standards are still pretty good,” McBride said, and he doesn’t expect mortgage rates to “take off” in the short term.

And in December 2018, I disagreed with Professor Shiller A comment on Professor Shiller's "The Housing Boom Is Already Gigantic. How Long Can It Last?". My conclusion:

No big deal, and definitely not a "gigantic" boom in house prices.

In 2021, I wrote: Is there a New Housing Bubble?

The lack of wild speculation doesn't mean house prices can't decline, but it means that we won't see cascading declines in prices like what happened when the housing bubble burst.
...
From a historical perspective, house prices are high. But lending standards have been solid, and we haven't seen significant speculation - so I wouldn't call this a bubble.

Also in 2021, I started my real estate newsletter.  

Note: for $25 you can read the entire archive and one month of daily posts - but make sure you cancel or substack will bill you every month! For $100, you will usually receive 4 to 6 articles per week for a year, you can read the archive and comment on all the posts.

A few key articles:

Housing and Demographics: The Next Big Shift

Housing: Don't Compare the Current Housing Boom to the Bubble and Bust

Household Formation Drives Housing Demand

The Long-Term Housing and Population Shift

Stay tuned!

by Calculated Risk on 10/18/2025 08:11:00 AM

NOTE: I'm on vacation and returning this week. Government data might be rescheduled due to the government shutdown.

The key economic report this week is September Existing Home sales.

For manufacturing, the Kansas City Fed manufacturing survey will be released this week.

----- Monday, October 20th -----
No major economic releases scheduled.

----- Tuesday, October 21st -----
No major economic releases scheduled.

----- Wednesday, October 22nd -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

During the day: The AIA/Deltek's Architecture Billings Index for September (a leading indicator for commercial real estate).

----- Thursday, October 23rd -----
8:30 AM: The initial weekly unemployment claims report will be released. 

8:30 AM ET: Chicago Fed National Activity Index for September. This is a composite index of other data.

10:00 AM: Existing Home Sales for September from the National Association of Realtors (NAR).  

The graph shows existing home sales from 1994 through the report last month.

11:00 AM: Kansas City Fed Survey of Manufacturing Activity for October.

----- Friday, October 24th -----
8:30 AM: CPI.