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.

by Calculated Risk on 7/20/2025 08:21:00 AM

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For June, Realtor.com reported inventory was up 28.9% YoY, but still down 12.9% compared to the 2017 to 2019 same month levels. 

Here is their weekly report: Weekly Housing Trends: Latest Data as of July 12

• Active inventory climbed 25.1% year over year

The number of homes active on the market climbed 25.1% year over year, slowing slightly from the previous week. This represents the 88th consecutive week of annual gains in inventory. There were more than 1 million homes for sale again last week, marking the 10th week in a row over the threshold and the highest inventory level since November 2019.

• New listings—a measure of sellers putting homes up for sale—rose 1.3% year over year

New listings rose again last week on an annual basis by just 1.3% compared with the same period last year.

• The median list price was up 0.2% year over year

The median list price climbed again this week, but is still down 0.3% year to date. The median list price per square foot—which adjusts for changes in home size—rose 0.5% year over year. With inventory on the rise and more than 1 in 5 sellers cutting prices, the market continues to soften and shift toward more buyer favorability.

With inventory climbing, and sales depressed, months-of-supply is at the highest level since 2016 putting downward pressure on house prices in an increasing number of areas.

by Calculated Risk on 7/19/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Housing Starts Increased to 1.321 million Annual Rate in June

• Lawler: Early Read on Existing Home Sales in June

• 3rd Look at Local Housing Markets in June

• Will House Prices Decline Nationally in 2025?

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

by Calculated Risk on 7/19/2025 08:11:00 AM

The key reports this week are June New and Existing Home Sales.

For manufacturing, the July Richmond and Kansas City Fed manufacturing surveys will be released.

----- Monday, July 21st -----
No major economic releases scheduled.

----- Tuesday, July 22nd -----
8:30 AM: Speech Fed Chair Jerome Powell, Opening Remarks, At the Integrated Review of the Capital Framework for Large Banks Conference, Washington, D.C.

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

----- Wednesday, July 23rd -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

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.

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

Housing economist Tom Lawler expects the NAR to report sales of 3.92 million SAAR for June.

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

----- Thursday, July 24th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims to increase to 230 thousand from 221 thousand last week.

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

10:00 AM: New Home Sales for June from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the sales rate for last month.

The consensus is for 650 thousand SAAR, up from 623 thousand in May.

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

----- Friday, July 25th -----
8:30 AM: Durable Goods Orders for June from the Census Bureau. The consensus is for a 10.0% decrease in durable goods orders.