by Calculated Risk on 8/20/2025 11:34:00 AM

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment including multi-family residential.

From the AIA: ABI July 2025: Business at architecture firms remains soft

The AIA/Deltek Architecture Billings Index (ABI) score for the month was below 50 for 31 out of the last 34 months, with a score of 46.2, as a majority of firms are still seeing declining billings. There are signs of hope ahead, as inquiries into new work grew slowly but steadily this month, following a brief three-month pause earlier this year. However, the value of newly signed design contracts at firms declined again in July, as firms continue to struggle to convert inquiries into contracts for new projects. This has been an issue for nearly as long as billings have been declining and reflects how soft business has been at many firms over the last two and a half years.

Billings continued to decline at firms in all regions of the country in July. Although conditions in the South looked like they were improving earlier this summer, the share of firms reporting a decline in billings increased this month. Billings remained softest at firms located in the Midwest for the third consecutive month. Business conditions continued to improve at firms with a commercial/industrial specialization this month, where there was nearly an equal share of firms reporting an increase in billings as reporting a decline for the second consecutive month. Firms with an institutional specialization also saw some encouraging signs, although business softened further at firms with a multifamily residential specialization in July.
...
The ABI serves as a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months.
emphasis added

• Northeast (47.8); Midwest (45.1); South (47.5); West (46.4)

• Sector index breakdown: commercial/industrial (49.9); institutional (47.9); multifamily residential (43.7)

Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 46.2 in July, down from 46.8 in June.  Anything below 50 indicates a decrease in demand for architects' services.

This index has indicated contraction for 31 of the last 34 months.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

This index usually leads CRE investment by 9 to 12 months, so this index suggests a slowdown in CRE investment throughout 2025 and into 2026.

Multi-family billings have been below 50 for 36 consecutive months.  This suggests we will some further weakness in multi-family starts.

by Calculated Risk on 8/20/2025 10:30:00 AM

Today, in the Calculated Risk Real Estate Newsletter: California Home Sales Down Year-over-year for 4th Straight Month

A brief excerpt:

The NAR is scheduled to release July Existing Home sales on Thursday, August 21st at 10:00 AM. The consensus is for 3.92 million SAAR, down from 3.93 million last month. Last year, the NAR reported sales in July 2024 at 3.98 million SAAR. Housing economist Tom Lawler expects the NAR to report sales of 3.92 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 trail last year’s levels for fourth straight month, C.A.R. says

July home sales activity dipped 1.0 percent from the 264,400 homes sold in June and was down 4.1 percent from a year ago, when 272,990 homes were sold on an annualized basis.

The NAR’s July existing home sales report will likely show a 3-handle (be under 4 million SAAR) for the 2nd consecutive month.

There is much more in the article.

by Calculated Risk on 8/20/2025 07:00:00 AM

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

Mortgage applications decreased 1.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 15, 2025.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week and was 23 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 0.1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 23 percent higher than the same week one year ago.

“Mortgage rates increased slightly last week, with the 30-year fixed rate now at 6.68 percent. Applications were down as a result, driven by a 16 percent decrease in VA applications, which are a typically volatile segment of the market,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “FHA refinance applications increased over the week, as the FHA rate, at 6.39 percent, remained competitive relative to other loan types. Purchase applications were little changed over the week but were at the strongest pace in four weeks and continued to run well ahead of last year’s pace. Prospective homebuyers remain more active compared to last year despite economic headwinds and uncertainty and affordability challenges.”
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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.68 percent from 6.67 percent, with points decreasing to 0.60 from 0.64 (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 23% 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 after picking a little up recently with lower mortgage rates.

by Calculated Risk on 8/19/2025 07:51:00 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.

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

• AT 2:00 PM, FOMC Minutes, Meeting of July 29-30

by Calculated Risk on 8/19/2025 01:11:00 PM

This is something I check occasionally.

The Department of Transportation (DOT) reported:

Travel on all roads and streets changed by +1.5% (+4.1 billion vehicle miles) for April 2025 as compared with April 2024. Travel for the month is estimated to be 277.3 billion vehicle miles.

The seasonally adjusted vehicle miles traveled for April 2025 is 277.0 billion miles, a +1.3% ( 3.6 billion vehicle miles) change over April 2024. It also represents a 0.3% change (0.8 billion vehicle miles) compared with March 2025.

Cumulative Travel for 2025 changed by +0.8% (+8.3 billion vehicle miles). The cumulative estimate for the year is 1,043.5 billion vehicle miles of travel.
emphasis added

Click on graph for larger image.

This graph shows the monthly total vehicle miles driven, seasonally adjusted.

Miles driven declined sharply in March 2020, and really collapsed in April 2020.  

Miles driven are now slightly below pre-pandemic levels.

by Calculated Risk on 8/19/2025 09:15:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Housing Starts Increased to 1.428 million Annual Rate in July

A brief excerpt:

Total housing starts in July were well above expectations and starts in May and June were revised up.

The third graph shows the month-to-month comparison for total starts between 2024 (blue) and 2025 (red).

Total starts were up 12.9% in July compared to July 2024. Note that July was the weakest month in 2024, so this was an easy comparison.

Year-to-date (YTD) starts are up 1.6% compared to the same period in 2024. Single family starts are down 4.2% YTD and multi-family up 18.1% YTD.

There is much more in the article.

by Calculated Risk on 8/19/2025 08:30:00 AM

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,428,000. This is 5.2 percent above the revised June estimate of 1,358,000 and is 12.9 percent above the July 2024 rate of 1,265,000. Single-family housing starts in July were at a rate of 939,000; this is 2.8 percent above the revised June figure of 913,000. The July rate for units in buildings with five units or more was 470,000.

Building Permits:
Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,354,000. This is 2.8 percent below the revised June rate of 1,393,000 and is 5.7 percent below the July 2024 rate of 1,436,000. Single-family authorizations in July were at a rate of 870,000; this is 0.5 percent above the revised June figure of 866,000. Authorizations of units in buildings with five units or more were at a rate of 430,000 in July.
emphasis added

Click on graph for larger image.

The first graph shows single and multi-family housing starts since 2000.

Multi-family starts (blue, 2+ units) increased month-over-month in July.   Multi-family starts were up 24.1% year-over-year.

Single-family starts (red) increased in July and were up 7.8% year-over-year.

The second graph shows single and multi-family housing starts since 1968.

Total housing starts in July were well above expectations and starts in May and June were revised up.

I'll have more later …

by Calculated Risk on 8/18/2025 08:31:00 PM

From Matthew Graham at Mortgage News Daily: Rates Trickle to Another Higher Low

Mortgage rates are as high as they've been on almost any other day this month. You'd have to go back to August 1st to see anything higher. On the other hand, rates are still noticeably lower than almost any other day of the past 10 months. It's really only the past 2 weeks that have been any better and the gap between recent highs and lows is very small. [30 year fixed 6.59%]
emphasis added

Tuesday:
• At 8:30 AM ET, Housing Starts for July. The consensus is for 1.300 million SAAR, down from 1.321 million SAAR in June.

• At 10:00 AM, State Employment and Unemployment (Monthly) for July 2025

by Calculated Risk on 8/18/2025 03:28:00 PM

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 up 8% YoY in July and exports were down 3% 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 increased 0.7% in July compared to the rolling 12 months ending the previous month.   

Outbound traffic decreased 0.3% compared to the rolling 12 months ending the previous month.

This is the 8th consecutive month with exports down YoY.

by Calculated Risk on 8/18/2025 12:26:00 PM

Today, in the Calculated Risk Real Estate Newsletter: 3rd Look at Local Housing Markets in July

A brief excerpt:

First, here are some comments from the Houston Association of REALTORS®: HOUSTON HOME PRICES EASE IN JULY AS SUPPLY HITS RECORD HIGH

According to the Houston Association of Realtors' July 2025 Housing Market Update, single-family home sales increased 9.2 percent year-over-year. A total of 8,300 homes were sold compared to 7,601 last year, when Hurricane Beryl temporarily halted market activity for several days.

July marked the largest year-over-year decline in home prices since 2023. The median price was down 3.1 percent to $339,000. The average price was $434,664, which is 1.9 percent below last year’s level.

Active listings reached an all-time high in July, exceeding 40,000 available homes in the Houston area. This represents a 38.2 percent increase from the same time last year.
emphasis added

Active listings hit an all-time high in Houston leading to some price declines. This is something we are seeing everywhere inventory has increased sharply. Note that sales were partially up year-over-year in Houston due to the hurricane depressing sales last year.
...
In July, sales in these markets were down 0.6% YoY. Last month, in June, these same markets were up 4.3% year-over-year Not Seasonally Adjusted (NSA).

Important: There were the same number of working days in July 2025 (22) as in July 2024 (22). So, the year-over-year change in the headline SA data will be similar to the NSA data.
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More local markets to come!

There is much more in the article.