by Calculated Risk on 9/25/2025 08:30:00 AM

The DOL reported:

In the week ending September 20, the advance figure for seasonally adjusted initial claims was 218,000, a decrease of 14,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 231,000 to 232,000. The 4-week moving average was 237,500, a decrease of 2,750 from the previous week's revised average. The previous week's average was revised up by 250 from 240,000 to 240,250.
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 decreased to 237,500.

The previous week was revised up.

Weekly claims were well below the consensus forecast.

by Calculated Risk on 9/24/2025 08:52:00 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 234 thousand from 231 thousand last week.

• At 8:30 AM, Gross Domestic Product, 2nd Quarter 2025 (Third Estimate), GDP by Industry, and Corporate Profits (Revised) The consensus is that real GDP increased 3.3% annualized in Q2, unchanged from the second estimate of 3.3%.

• At 8:30 AM, Durable Goods Orders for August from the Census Bureau. The consensus is for a 0.5% decrease in durable goods orders.

• At 10:00 AM, Existing Home Sales for August from the National Association of Realtors (NAR). The consensus is for 3.98 million SAAR, down from 4.01 million in July.

Housing economist Tom Lawler expects the NAR to report August sales of 3.93 million SAAR.

• At 11:00 AM, the Kansas City Fed manufacturing survey for September.

by Calculated Risk on 9/24/2025 04:50:00 PM

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

From the AIA: ABI August 2025: Softness persists at architecture firms

The AIA/Deltek Architecture Billings Index (ABI) score was 47.2 for the month of August 2025. The share of firms reporting declining billings in August fell modestly from July, but overall, most firms continue to report a downward trajectory. In addition, inquiries softened in August and were essentially flat, after small increases over the previous three months. In addition, the value of new design contracts declined for the 18th consecutive month, the longest period of decline since we started collecting this data 15 years ago. This year has seen generally soft inquiries into new projects and a steady decrease in the value of newly signed design contracts, as clients remain cautious about committing to new projects. Without new work on the horizon, many firms will likely continue to experience declining billings in the coming months.

While business conditions remained soft at firms in most regions of the country in August, firms located in the South reported essentially flat conditions for the fourth consecutive month. In contrast, firms located in the West saw their billings soften this month, as they reported their weakest conditions in nearly two years. By specialization, firms with a commercial/industrial specialization reported modest growth in August for the first time in three years. And firms with a multifamily residential specialization have also seen improving conditions in the last few months and saw essentially flat billings this month. In contrast, business conditions have softened recently at firms with an institutional specialization to their lowest levels since 2020. Uncertainty with government budgets in recent months continues to cause uncertainty for many firms specializing in institutional facilities.
...
The ABI serves as a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months.
emphasis added

• Northeast (46.2); Midwest (48.0); South (49.9); West (43.5)

• Sector index breakdown: commercial/industrial (50.8); institutional (44.5); multifamily residential (49.9)

Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 47.2 in August, up from 46.2 in July.  Anything below 50 indicates a decrease in demand for architects' services.

This index has indicated contraction for 33 of the last 35 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 37 consecutive months.  This suggests we will some further weakness in multi-family starts.

by Calculated Risk on 9/24/2025 02:16:00 PM

From Intercontinental Exchange: ICE First Look at Mortgage Performance: Delinquencies Up on Calendar Effect; Foreclosure Activity Slowly Trending Higher

Intercontinental Exchange, Inc. (NYSE:ICE) ... today released its August 2025 ICE First Look at mortgage delinquency, foreclosure and prepayment trends. The data shows the national delinquency rate rose in August, largely driven by a calendar anomaly, while foreclosure activity continued its slow upward trend.

“The rise in the national delinquency rate for August is best understood in the context of how the calendar can impact payment processing,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “Most of the uptick in the national delinquency rate can be attributed to delayed processing of end-of-month payments, as August closed on a Sunday this year. This calendar-driven effect is consistent with what we observed in prior years, so the increase should be considered a temporary adjustment rather than a shift in underlying borrower health.”

Key takeaways from the ICE First Look include:

• The national delinquency rate rose by 16 basis points (bps) in August to 3.43%, up 10 bps from the same time last year, marking a return to annual increases after temporary reprieves in June and July.

• Mortgage delinquencies typically face little seasonal pressure from July to August, but the last day of August 2025 falling on a Sunday resulted in delayed processing and temporarily higher delinquency rolls. For instance, August 2003, 2008, and 2014 also ended on a Sunday, each experiencing a delinquency rise averaging 5.3%. This is similar to the 5.0% rise observed this year – suggesting that much of August’s delinquency rise may have been driven by the way the calendar fell.

• FHA loans continue to see the largest annual increases, with the non-current rate (delinquencies including foreclosures) up by 86 bps to 12.0% in August, while the non-current rates for VA, GSE, and portfolio-held mortgages remained effectively flat year over year.

• Serious delinquencies (loans 90+ days past due but not in foreclosure) rose by 16,000 in August and are up 32,000 year over year, while loans in active foreclosure increased by 3,000 for the month and 23,000 since last year.

• Foreclosure starts rose year-over-year (+6%) for the ninth consecutive month, and foreclosure sales (+22.5%) are up from the same time last year for the sixth consecutive month, contributing to a 12.3% annual increase in foreclosure inventory.

• Inflows and transitions to later stages of delinquency increased across the board, while cures to current from both early- and late-stage delinquency fell.

• August prepayment activity slipped by 1 bp to a 0.66% single month mortality (SMM) rate, reflecting seasonal home buying patterns and relatively steady interest rates in July.
emphasis added

Click on graph for larger image.

Here is a table from ICE.

by Calculated Risk on 9/24/2025 10:59:00 AM

Today, in the Calculated Risk Real Estate Newsletter: New Home Sales increased to 800,000 Annual Rate in August

Brief excerpt:

The Census Bureau reported New Home Sales in August were at a seasonally adjusted annual rate (SAAR) of 800 thousand. The previous three months were revised up, combined.
...
The next graph shows new home sales for 2024 and 2025 by month (Seasonally Adjusted Annual Rate). Sales in August 2025 were up 15.4% from August 2024.

There is much more in the article.

by Calculated Risk on 9/24/2025 10:00:00 AM

The Census Bureau reports New Home Sales in August were at a seasonally adjusted annual rate (SAAR) of 800 thousand.

The previous three months were revised up, combined.

Sales of new single-family houses in August 2025 were at a seasonally-adjusted annual rate of 800,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 20.5 percent above the July 2025 rate of 664,000, and is 15.4 percent above the August 2024 rate of 693,000.
emphasis added

Click on graph for larger image.

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

New home sales were above pre-pandemic levels.

The second graph shows New Home Months of Supply.

The months of supply was decreased in August to 7.4 months from 9.0 months in July.

The all-time record high was 12.2 months of supply in January 2009. The all-time record low was 3.3 months in August 2020.

This is above the top of the normal range (about 4 to 6 months of supply is normal).

"The seasonally-adjusted estimate of new houses for sale at the end of August 2025 was 490,000. This is 1.4 percent below the July 2025 estimate of 497,000, and is 4.0 percent above the August 2024 estimate of 471,000.

This represents a supply of 7.4 months at the current sales rate. The months' supply is 17.8 percent below the July 2025 estimate of 9.0 months, and is 9.8 percent below the August 2024 estimate of 8.2 months."

Sales were well above expectations of 653 thousand SAAR and sales for the three previous months were revised up, combined. I'll have more later today.

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.