by Calculated Risk on 8/15/2025 11:52:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Part 2: Current State of the Housing Market; Overview for mid-August 2025

A brief excerpt:

Yesterday, in Part 1: Current State of the Housing Market; Overview for mid-August 2025 I reviewed home inventory, housing starts and sales. I noted that the key stories for existing homes are that inventory has increased sharply while sales are essentially flat compared to last year (and sales in 2024 were the lowest since 1995). That means prices are under pressure. And there are significant regional differences too.

In Part 2, I will look at house prices, mortgage rates, rents and more.
...
The Case-Shiller National Index increased 2.3% year-over-year (YoY) in May and will likely be lower year-over-year in the June report compared to May (based on other data).
...
In the January report, the Case-Shiller National index was up 4.2%, in February up 3.9%, in March up 3.4%, in April report up 2.7%, and in May up 2.3%.

And the May Case-Shiller index was a 3-month average of closing prices in March, April and May. March closing prices include some contracts signed in January.

So, not only is this trending down, but there is a significant lag to this data.

There is much more in the article.

by Calculated Risk on 8/15/2025 09:15:00 AM

From the Fed: Industrial Production and Capacity Utilization

Industrial production (IP) edged down 0.1 percent in July. Manufacturing output was unchanged after increasing 0.3 percent in June. In July, the index for mining declined 0.4 percent, and the index for utilities decreased 0.2 percent. At 104.0 percent of its 2017 average, total IP in July was 1.4 percent above its year-earlier level. Capacity utilization moved down to 77.5 percent in July, a rate that is 2.1 percentage points below its long-run (1972–2024) average.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and close to the level in February 2020 (pre-pandemic).

Capacity utilization at 77.5% is 2.1% below the average from 1972 to 2023.  This was slightly below consensus expectations.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production decreased to 104.0. This is above the pre-pandemic level.

Industrial production was slightly above consensus expectations.

by Calculated Risk on 8/15/2025 08:30:00 AM

On a monthly basis, retail sales increased 0.5% from June to July (seasonally adjusted), and sales were up 3.9 percent from July 2024.

From the Census Bureau report:

Advance estimates of U.S. retail and food services sales for July 2025, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $726.3 billion, up 0.5 percent from the previous month, and up 3.9 percent from July 2024. ... The May 2025 to June 2025 percent change was revised from up 0.6 percent to up 0.9 percent.
emphasis added

Click on graph for larger image.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

Retail sales ex-gasoline was up 0.5% in July.

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail and Food service sales, ex-gasoline, increased by 4.4% on a YoY basis.

The change in sales in July were at expectations and the previous two months were revised up.

by Calculated Risk on 8/14/2025 08:45:00 PM

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

Friday:
• At 8:30 AM ET, Retail sales for July is scheduled to be released.  The consensus is for 0.5% increase in retail sales.

• Also at 8:30 AM, The New York Fed Empire State manufacturing survey for August. The consensus is for a reading of 0.0, down from 5.5.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for July. The consensus is for a 0.2% decrease in Industrial Production, and for Capacity Utilization to be unchanged at 77.6%.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Preliminary for August)

by Calculated Risk on 8/14/2025 06:21:00 PM

From First American Chief Economist Mark Fleming Housing Market Returning to Reality as National Price Growth Cools Further in July, According to First American Data & Analytics Monthly Home Price Index Report

Highlights

• Annual house price appreciation is at the slowest rate since March 2012.

• House price growth reported in last month’s HPI for May 2025 to June 2025 was revised down by 0.1 percentage points, from -0.1 percent to -0.2 percent.

“It’s back to reality for national house price appreciation, as limited affordability, economic uncertainty and homeowners unwilling to enter the market and give up their low mortgage rates hinder demand amid a growing inventory of listings,” said Mark Fleming, chief economist at First American. “This supply-demand dynamic slowed annual home price growth nationally for the eighth straight month in July. National prices are now just 0.3 percent from their recent peak in May. A window has opened for incomes to outpace price growth and affordability to improve, a positive for buyers looking for an opportunity. Overall, it’s a reflection of a steadily cooling housing market, following the white-hot pandemic-era market fueled by record-low mortgage rates.”

by Calculated Risk on 8/14/2025 03:15:00 PM

From STR: U.S. hotel results for week ending 9 August

The U.S. hotel industry reported negative year-over-year comparisons, according to CoStar’s latest data through 9 August. ...

3-9 August 2025 (percentage change from comparable week in 2024):

• Occupancy: 68.0% (-1.0%)
• Average daily rate (ADR): US$159.61 (-0.6%)
• Revenue per available room (RevPAR): US$108.47 (-1.6%)
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.

Click on graph for larger image.

The red line is for 2025, blue is the median, and dashed light blue is for 2024.  Dashed purple is for 2018, the record year for hotel occupancy. 

The 4-week average of the occupancy rate is tracking behind last year and the median rate for the period 2000 through 2024 (Blue).

Note: Y-axis doesn't start at zero to better show the seasonal change.

The 4-week average will decrease seasonally into the Fall.

On a year-to-date basis, the only worse years for occupancy over the last 25 years were pandemic or recession years.

by Calculated Risk on 8/14/2025 12:26:00 PM

Today, in the Calculated Risk Real Estate Newsletter: MBA: Mortgage Delinquencies Decreased Slightly in Q2 2025

A brief excerpt:

From the MBA: Mortgage Delinquencies Decrease Slightly in the Second Quarter of 2025

The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 3.93 percent of all loans outstanding at the end of the second quarter of 2025, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The following graph shows the percent of loans delinquent by days past due. Overall delinquencies decreased in Q2. The sharp increase in 2020 in the 90-day bucket was due to loans in forbearance (included as delinquent, but not reported to the credit bureaus).

The percent of loans in the foreclosure process increased year-over-year from 0.43 percent in Q2 2024 to 0.48 percent in Q2 2025 (red) but remains historically low.

There is much more in the article.

by Calculated Risk on 8/14/2025 10:05:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-August 2025

A brief excerpt:

This 2-part overview for mid-July provides a snapshot of the current housing market.

The key stories this year for existing homes are that inventory increased sharply, and sales are down slightly compared to last year (and sales in 2024 were the lowest since 1995). That means prices are under pressure (although there will not be a huge wave of distressed sales).

And it has been a disappointing year for new homebuilders (but not as horrible as the housing bust!). Homebuilders have a growing number of completed homes for sales, a larger than normal number of unsold homes under construction and are reducing prices to compete with more existing home inventory.

Realtor.com reports in the July 2025 Monthly Housing Market Trends Report that new listings were up 7.3% year-over-year in July. And active listings were up 24.8% year-over-year.

Homebuyers found more options in July, as the number of actively listed homes rose 24.8% compared with the same time last year. There are now over 1.1 million homes for sale nationwide, the third consecutive month with over 1 million active listings.

While July marks the 21st consecutive month of inventory gains, the pace of growth is beginning to slow. Active listings rose less than in prior months—down from 28.9% in June and 31.5% in May—suggesting the post-pandemic inventory recovery could be stalling a bit. Nationally, total active listings in July remained 13.4% below typical 2017–19 levels, a slightly wider gap than last month’s 12.9% shortfall. Overall, inventory growth seems to be slightly decelerating after taking off in early spring.

There is much more in the article.

by Calculated Risk on 8/14/2025 08:30:00 AM

The DOL reported:

In the week ending August 9, the advance figure for seasonally adjusted initial claims was 224,000, a decrease of 3,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 226,000 to 227,000. The 4-week moving average was 221,750, an increase of 750 from the previous week's revised average. The previous week's average was revised up by 250 from 220,750 to 221,000.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 221,750.

The previous week was revised up.

Weekly claims were close to the consensus forecast.

by Calculated Risk on 8/13/2025 07:30:00 PM

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

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for initial claims to increase to 228 thousand from 226 thousand last week.

• Also at 8:30 AM, The Producer Price Index for July from the BLS. The consensus is for a 0.2% increase in PPI, and a 0.2% increase in core PPI.