by Calculated Risk on 9/24/2025 07:00:00 AM

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

Mortgage applications increased 0.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 19, 2025.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.1 percent compared with the previous week. The Refinance Index increased 1 percent from the previous week and was 42 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 0.3 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 18 percent higher than the same week one year ago.

“Mortgage rates declined further last week, with the 30-year fixed rate falling to its lowest level since last September to 6.34 percent. Interest rates generally have moved up following the FOMC meeting last week but remain in a range that should continue to lead to increased refinance activity. Refinance volume increased further last week and is now 80 percent higher than four weeks ago, accounting for more than 60 percent of all application activity,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “The refinance boost last week was from government applications, with VA refinance volume up almost 15 percent. While homebuyer demand typically tends to decrease during the fall, purchase application activity remains relatively strong right now, running 18 percent ahead of last year’s pace.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.34 percent from 6.39 percent, with points increasing to 0.57 from 0.54 (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 18% year-over-year unadjusted. 

Red is a four-week average (blue is weekly).  

Purchase application activity is still depressed, but above the lows of 2023 and slightly above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index has increased significantly from the bottom as mortgage rates declined.

by Calculated Risk on 9/23/2025 07:56:00 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.

• At 10:00 AM: New Home Sales for August from the Census Bureau. The consensus is for 653 thousand SAAR, up from 652 thousand in July.

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

by Calculated Risk on 9/23/2025 05:11:00 PM

From Fed Chair Powell: Economic Outlook. Excerpts:

In the labor market, there has been a marked slowing in both the supply of and demand for workers—an unusual and challenging development. In this less dynamic and somewhat softer labor market, the downside risks to employment have risen. The unemployment rate edged up to 4.3 percent in August but has remained relatively stable at a low level over the past year. Payroll job gains slowed sharply over the summer months, as employers added an average of just 29,000 per month over the past three months. The recent pace of job creation appears to be running below the "breakeven" rate needed to hold the unemployment rate constant. But a number of other labor market indicators remain broadly stable. For example, the ratio of job openings to unemployment remains near 1. And multiple measures of job openings have been moving roughly sideways, as have initial claims for unemployment insurance.

Inflation has eased significantly from its highs of 2022 but remains somewhat elevated relative to our 2 percent longer-run goal. The latest available data indicate that total PCE prices rose 2.7 percent over the 12 months ending in August, up from 2.3 percent in August 2024. Excluding the volatile food and energy categories, core PCE prices rose 2.9 percent last month, also higher than the year-ago level. Goods prices, after falling last year, are driving the pickup in inflation. Incoming data and surveys suggest that those price increases largely reflect higher tariffs rather than broader price pressures. Disinflation for services continues, including for housing. Near-term measures of inflation expectations have moved up, on balance, over the course of this year on news about tariffs. Beyond the next year or so, however, most measures of longer-term expectations remain consistent with our 2 percent inflation goal.

The overall economic effects of the significant changes in trade, immigration, fiscal and regulatory policy remain to be seen. A reasonable base case is that the tariff-related effects on inflation will be relatively short lived—a one-time shift in the price level. A "one-time" increase does not mean "all at once." Tariff increases will likely take some time to work their way through supply chains. As a result, this one-time increase in the price level will likely be spread over several quarters and show up as somewhat higher inflation during that period.

But uncertainty around the path of inflation remains high. We will carefully assess and manage the risk of higher and more persistent inflation. We will make sure that this one-time increase in prices does not become an ongoing inflation problem.
...
Near-term risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation. Two-sided risks mean that there is no risk-free path. If we ease too aggressively, we could leave the inflation job unfinished and need to reverse course later to fully restore 2 percent inflation. If we maintain restrictive policy too long, the labor market could soften unnecessarily. When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate.

by Calculated Risk on 9/23/2025 12:17:00 PM

I've been tracking the weak hotel occupancy numbers in the U.S.

Meanwhile, Canadian hotels are reporting strong numbers!

From CoStar: Canadian travelers push their home and native land to record summer highs

Canada's hotel performance this summer has been historically strong, with August bringing in the highest occupancy for any month since August of 2014.

That same month, revenue per available room has reached over 200 Canadian dollars ($139.92 U.S. dollars) for the first time ever, according to CoStar data.

Canadian hoteliers can credit, in part, the increased animosity toward the United States due to President Donald Trump's trade policies that's led to more Canadians choosing not to visit or financially benefit their neighbor to the south.

"In July, rooms sold is up almost 4% compared to the same time last year — it's up 3.7% — and I think that is a clear indicator that the 'buy Canadian' sentiment translates into 'stay Canadian' as well, and that the Canadian leisure traveler is voting with their wallet and saying, 'Well, I want to go somewhere, so let me just stay within the country,'" said Jan Freitag, national director of hospitality market analytics for CoStar.

by Calculated Risk on 9/23/2025 08:59:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Household Formation Drives Housing Demand

A brief excerpt:

In 2021, we saw rapidly rising home prices and rents indicating strong demand for both owner occupied and rental units. This suggested a sharp increase in household formation.

Subsequent research indicated this was correct.

If we look at the Historical Households Tables (based on the Current Population Survey), we see that from 2010 to 2019, about 1.1 million additional households were formed each year. However, in 2020 due to the pandemic, the number of households declined by over 100 thousand.

There is much more in the article.

by Calculated Risk on 9/22/2025 07:17:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Roughly Unchanged to Start New Week

After hitting the lowest levels in nearly a year (and nearly the lowest levels in 3 years) last Tuesday, rates lurched higher following Wednesday's Fed announcement. While the Fed cut rates as expected, and while the Fed's rate forecasts were well-received, Powell's guidance pushed back in the other direction. Economic data on Thursday morning made things worse making for a fairly sharp 2-day spike.

Things calmed down after that. Friday's rates were a hair lower and now today's rates are right in line with Friday's. In other words, the volatile reaction to last week's Fed announcement is over and the market is waiting for the next source of inspiration.

The most prevalent top tier 30yr fixed rate is now closest to 6.375% after briefly hitting 6.125% last week. [30 year fixed 6.35%]
emphasis added

Tuesday:
• At 10:00 AM ET, the Richmond Fed manufacturing survey for September.

by Calculated Risk on 9/22/2025 01:01:00 PM

Today, in the Calculated Risk Real Estate Newsletter: California Home Sales Down Year-over-year for 5th Straight Month

A brief excerpt:

The NAR is scheduled to release August Existing Home sales on Thursday, September 25th at 10:00 AM. The consensus is for the NAR to report sales of 3.98 million SAAR. Last year, the NAR reported sales in August 2024 at 3.93 million SAAR.

Housing economist Tom Lawler expects the NAR to report August sales of 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 August as lower rates lift demand, C.A.R. says

August home sales activity edged up 0.9 percent from the 261,820 homes sold in July and slipped 0.2 percent from a year ago, when 264,640 homes were sold on an annualized basis. August’s sales level remained slightly below last year’s revised level and marked the fifth consecutive month of year-over-year sales declines. ...

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

There is much more in the article.

by Calculated Risk on 9/22/2025 10:58:00 AM

First, shutdowns are expensive, and many government employees continue to work (like the military), but don't get paid. In the past, all employees who didn't work were paid in full.

Second, there will be an impact on GDP. Depending on the length of the shutdown, this will negatively impact GDP in Q4.

Third, we will be flying mostly blind without reports on employment, inflation, housing starts and more.  However, there will be some private data to fill the gap.  

Fourth, for housing, depending on the length of the shutdown, the impact would be on existing home closings in October. If the shutdown lasts for the entire month, I'd expect about a 10% decline in seasonally adjusted sales in October. If the shutdown only lasts a couple of weeks, there would probably be little impact. Some issues could be Tax transcripts, Flood Certs, and SS# Authorization.

Also, a shutdown increases uncertainty, and that might push up mortgage rates (investors hate uncertainty).

by Calculated Risk on 9/22/2025 08:11:00 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 29.0% compared to the same week in 2024 (last week it was up 20.5%), and down 9.5% compared to the same week in 2019 (last week it was down 9.8%). 

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 September 19th, inventory was at 863 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 9/21/2025 06:23:00 PM

Weekend:
• Schedule for Week of September 12, 2025

Monday:
• At 8:30 AM ET, Chicago Fed National Activity Index for August. This is a composite index of other data.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 7 and DOW futures are down 56 (fair value).

Oil prices were down over the last week with WTI futures at $62.68 per barrel and Brent at $66.68 per barrel. A year ago, WTI was at $73, and Brent was at $76 - so WTI oil prices are down about 14% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.14 per gallon. A year ago, prices were at $3.19 per gallon, so gasoline prices are down $0.05 year-over-year.