by Calculated Risk on 8/04/2025 08:12:00 PM

From Matthew Graham at Mortgage News Daily: Lowest Mortgage Rates Since Early October

Friday's reaction was so big that the average mortgage lender didn't fully adjust their rate offerings to match the market movement. This is typical of very large swings in bonds. It also meant that we merely needed today's bond market levels to hold steady in order for rates to continue lower and that's exactly what happened.

In fact, bonds ultimately improved just a hair, but even before that, mortgage lenders were out with their lowest rates since early October. [30 year fixed 6.57%]
emphasis added

Tuesday:
• At 8:30 AM ET, Trade Balance report for June from the Census Bureau. The consensus is the trade deficit to be $67.6 billion.  The U.S. trade deficit was at $71.5 Billion the previous month.

• At 10:00 AM, the ISM Services Index for July.   The consensus is for a reading of 51.5, up from 50.8.

• At 11:00 AM, NY Fed: Q2 Quarterly Report on Household Debt and Credit

by Calculated Risk on 8/04/2025 03:47:00 PM

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the July 2025 seasonally adjusted annual sales rate (SAAR) of 455 thousand.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Click on graph for larger image.

Heavy truck sales were at 455 thousand SAAR in July, up from 443 thousand in June, and down 12.0% from 517 thousand SAAR in July 2024.

Year-to-date (NSA) sales are down 6.8% through July.

Usually, heavy truck sales decline sharply prior to a recession and sales have been a little soft recently.  

by Calculated Risk on 8/04/2025 02:00:00 PM

From the Federal Reserve: The July 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices

The July 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the second quarter of 2025.

Regarding loans to businesses over the second quarter, survey respondents reported, on balance, tighter lending standards and weaker demand for commercial and industrial (C&I) loans to firms of all sizes. Furthermore, banks generally reported tighter standards and weaker demand for commercial real estate (CRE) loans.

For loans to households, banks reported basically unchanged lending standards and weaker demand for residential mortgage loans, on balance. In addition, banks reported tighter lending standards and stronger demand for home equity lines of credit (HELOCs). For consumer loans, standards tightened for credit card loans and remained basically unchanged for auto and other consumer loans. Meanwhile, demand weakened for credit card and other consumer loans and strengthened for auto loans.

The July SLOOS included a set of special questions inquiring about the current level of lending standards relative to the midpoint of the range over which banks’ standards have varied since 2005. Banks reported that, on balance, levels of standards are currently on the tighter end of the range for all loan categories. Compared with the July 2024 survey, banks reported easier levels of standards for most loan categories except residential real estate (RRE) loans, for which levels of standards were comparable with July 2024.
emphasis added

Click on graph for larger image.

This graph on Residential Real Estate demand is from the Senior Loan Officer Survey Charts.

This graph is for demand and shows that demand has been weak since late 2021.

The left graph is from 1990 to 2014.  The right graph is from 2015 to Q1 2025.

Only demand for HELOCs was reported as stronger.

by Calculated Risk on 8/04/2025 11:31:00 AM

Today, in the Calculated Risk Real Estate Newsletter: How Much will the Fannie & Freddie Conforming Loan Limit Change for 2026?

A brief excerpt:

With house prices up low-single digits over the last year through mid-year, an interesting question is: How much will the Fannie & Freddie conforming loan limits (CLL) change for 2026? And how much will the FHA insured loan limits change?

First, there are different loan limits for various geographical areas. There are also different loan limits depending on the number of units (from 1 to 4 units). For example, currently the CLL is $806,500 for one-unit properties in most areas. For high-cost areas like Los Angeles County, the CLL is $1,209,750 for one-unit properties (50% higher than the baseline CLL).
...
Note that during periods when house prices decline, the CLL is not reduced. The CLL was at $417,000 from 2006 through 2016 and only increased slightly in 2017 as the house price index caught back up to the previous high reached during the housing bubble. This graph shows the CLL since 1979. The CLL was unchanged from 2006 though 2016.

We need the house price data through September 2025 to calculate the conforming loan limit for 2026. This quarterly data will be released in late November.

There is much more in the article.

by Calculated Risk on 8/04/2025 10:35:00 AM

The BEA reported this morning that light vehicle sales were at 16.41 million in July on a seasonally adjusted annual rate basis (SAAR).

This was up 7.1% from the sales rate in June, and up 3.7% from July 2024.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) through July (red).

Vehicle sales were over 17 million SAAR in March and April as consumers rushed to "beat the tariffs".

Then sales were depressed in May and June. 

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Sales in July were at the consensus forecast of 16.4 million SAAR.

by Calculated Risk on 8/04/2025 08:11:00 AM

Altos reports that active single-family inventory was up 0.6% week-over-week.

Inventory is now up 38.6% from the seasonal bottom in January.   Usually, inventory is up about 22% 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 26.6% compared to the same week in 2024 (last week it was up 27.0%), and down 10.0% compared to the same week in 2019 (last week it was down 10.3%). 

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 August 1st, inventory was at 866 thousand (7-day average), compared to 860 thousand the prior week. 

Mike Simonsen discusses this data and much more regularly on YouTube

by Calculated Risk on 8/03/2025 06:14:00 PM

Weekend:
• Schedule for Week of August 3, 2025

Monday:
• At 2:00 PM ET, Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) for July.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 9 and DOW futures are down 43 (fair value).

Oil prices were up over the last week with WTI futures at $67.33 per barrel and Brent at $69.67 per barrel. A year ago, WTI was at $75, and Brent was at $78 - so WTI oil prices are down about 11% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.13 per gallon. A year ago, prices were at $3.46 per gallon, so gasoline prices are down $0.33 year-over-year.

by Calculated Risk on 8/03/2025 08:21:00 AM

IMPORTANT: It is critical that the Fed stay independent, data driven, and immune to political pressure. This is also true for the Federal statistical agencies, and the firing of the highly respected BLS commissioner on Friday (because of the bad employment report) is very concerning. The U.S. Senate must ensure that the next BLS commissioner is respected, data driven, and immune to political pressure.

On Friday, Fed Governor Adriana Kugler resigned. This created some concern that she was leaving early and creating a vacancy at a crucial time at the Fed.  The Fed needs to be independent, data driven, and not subject to political whims.  

In the case of Dr. Kugler, she was appointed to an unexpired term, and her term was scheduled to end in January 2026 (just six months from now). It is likely she left a little early to be available at the start of a school year (she is a professor). So, this is not a big deal. She will miss four FOMC meetings: Sept, Oct, Dec and Jan 2026.

FOMC Composition

The Federal Open Market Committee (FOMC) is composed of seven Fed Governors, the President of the NY Fed, and four rotating Federal Reserve Bank district Presidents (there are 12 Fed Districts).

Fed Governors

The Fed Governers are appointed to 14-year terms (every 2 years a term expires). If a Fed Governor leaves early, the President can appoint someone to fill the unexpired term.

This means each President appoints 2 governors and can also fill any unexpired terms.

The other Fed Governor whose term is scheduled to expire while Trump is President is Jerome Powell in January 2028. If he decides to leave early (likely), Trump can appoint someone to fill the unexpired term - and then appoint someone for 14 years in January 2028.  It is possible (but unlikely) that Powell will stay until 2028.

Here are the other five Fed Governors:

Christopher J. Waller, appointed by Trump, term expires January 2030

Michael S. Barr, appointed by Biden, term expires January 2032
Michelle W. Bowman, appointed by Trump, term expires January 2034
Philip N. Jefferson, appointed by Biden, term expires January 2036

Lisa D. Cook, appointed by Biden, term expires January 2038

Federal Reserve Bank Presidents on the FOMC

Fed District Presidents serve five-year terms and are appointed by the Directors of each Federal Reserve Bank. The current terms all end in January 2026, but frequently Fed Presidents are reappointed.

This year (2025) the five Fed Presidents on the FOMC are:

John C. Williams, New York, Vice Chair
Susan M. Collins, Boston
Austan D. Goolsbee, Chicago
Alberto G. Musalem, St. Louis
Jeffrey R. Schmid, Kansas City

Next year (2026), the Five Fed Presidents will be (it is likely most, if not all, will be reappointed in January):

John C. Williams, New York, Vice Chair
Beth M. Hammack, Cleveland
Neel Kashkari, Minneapolis
Lorie K. Logan, Dallas
Anna Paulson, Philadelphia

This is a qualified group. Even if Powell leaves, and four of the seven Fed Governors are Trump appointees, I think the majority of the FOMC will be very data dependent - and not swayed by politics.  And it is a COMMITEE vote!  There is the possibility we could see the first ever dissent by a Fed Chair.  

Note: The Fed Chair must be one of the Fed Governors. Trump could appoint someone to fill the last six months of Dr. Kugler's unexpired term and then appoint someone else in January that he intends to name Fed Chair.

by Calculated Risk on 8/02/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Case-Shiller: National House Price Index Up 2.3% year-over-year in May

• Freddie Mac House Price Index Declined in June; Up 2.0% Year-over-year

• Inflation Adjusted House Prices 2.0% Below 2022 Peak

• Fannie and Freddie: Single Family Serious Delinquency Rates Decreased in June

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

by Calculated Risk on 8/02/2025 08:11:00 AM

This will be a light week for economic data.

The key report this week is the June Trade Deficit.

----- Monday, August 4th -----
2:00 PM: Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) for July.

----- Tuesday, August 5th -----
8:30 AM: Trade Balance report for June from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through the most recent report. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is the trade deficit to be $67.6 billion.  The U.S. trade deficit was at $71.5 Billion the previous month.

10:00 AM: the ISM Services Index for July.   The consensus is for a reading of 51.5, up from 50.8.

11:00 AM: NY Fed: Q2 Quarterly Report on Household Debt and Credit

----- Wednesday, August 6th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

----- Thursday, August 7th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims to increase to 220 thousand from 218 thousand last week.

----- Friday, August 8th -----
No major economic releases scheduled.