by Calculated Risk on 9/26/2025 10:17:00 AM

Today, in the Calculated Risk Real Estate Newsletter: FHFA’s Q2 National Mortgage Database: Outstanding Mortgage Rates, LTV and Credit Scores

A brief excerpt:

Here are some graphs on outstanding mortgages by interest rate, the average mortgage interest rate, borrowers’ credit scores and current loan-to-value (LTV) from the FHFA’s National Mortgage Database through Q2 2025 (released yesterday).
...
This shows the surge in the percent of loans under 3% starting in early 2020 as mortgage rates declined sharply during the pandemic.

Note that a fairly large percentage of mortgage loans were under 4% prior to the pandemic!

The percent of outstanding loans under 4% peaked in Q1 2022 at 65.1% (now at 52.5%), and the percent under 5% peaked at 85.6% (now at 70.4%). These low existing mortgage rates made it difficult for homeowners to sell their homes and buy a new home since their monthly payments would increase sharply.

This was a key reason existing home inventory levels were so low. However, time is eroding this lock-in effect.

There is much more in the article.

by Calculated Risk on 9/26/2025 08:30:00 AM

From the BEA: Personal Income and Outlays, August 2025

Personal income increased $95.7 billion (0.4 percent at a monthly rate) in August, according to estimates released today by the U.S. Bureau of Economic Analysis. Disposable personal income (DPI)—personal income less personal current taxes—increased $86.1 billion (0.4 percent) and personal consumption expenditures (PCE) increased $129.2 billion (0.6 percent).

Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—increased $132.9 billion in August. Personal saving was $1.06 trillion in August and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.6 percent.
...
From the preceding month, the PCE price index for August increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

From the same month one year ago, the PCE price index for August increased 2.7 percent. Excluding food and energy, the PCE price index increased 2.9 percent from one year ago.
emphasis added

The August PCE price index increased 2.7 percent year-over-year (YoY), up from 2.6 percent YoY in July.

The PCE price index, excluding food and energy, increased 2.9 percent YoY, unchanged from 2.9 percent in July.

The following graph shows real Personal Consumption Expenditures (PCE) through August 2025 (2017 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income and PCE were above expectations.

Inflation was at expectations.

Using the two-month method to estimate Q3 real PCE growth, real PCE was increasing at a 4.0% annual rate in Q3 2025. (Using the mid-month method, real PCE was increasing at 3.0%).  This suggests decent PCE growth in Q3.

by Calculated Risk on 9/25/2025 08:00:00 PM

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

Friday:
• At 8:30 AM ET, Personal Income and Outlays, August 2025.  The consensus is for a 0.3% increase in personal income, and for a 0.5% increase in personal spending. And for the Core PCE price index to increase 0.2% (up 2.9% YoY).

• At 10:00 AM: University of Michigan's Consumer sentiment index (Final for September). The consensus is for a reading of 55.4.

by Calculated Risk on 9/25/2025 04:56:00 PM

From J.D. Power: J.D. Power-GlobalData Forecast September 2025 Brief excerpt:

Total new-vehicle sales for September 2025, including retail and non-retail transactions, are projected to reach 1,232,200, a 0.1% increase year over year, according to a joint forecast from J.D. Power and GlobalData. September 2025 has 24 selling days, one more than September 2024. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 4.5% from 2024.

The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 16.2 million units, up 0.3 million units from September 2024.
...
Thomas King, president of the data and analytics division at J.D. Power:
“In aggregate, September sales results point to another month of strong demand for new vehicles. However, as has been the case for the past few months, assessing the health of the industry requires a closer look at the underlying market dynamics.

“The biggest driver of September’s strong sales pace is temporarily inflated demand for electric vehicles. The federal EV tax credit expires at the end of the month, which is causing many shoppers to accelerate their purchase. EV share of retail sales is expected to reach a record of 12.2% this month—up 2.6 percentage points from a year ago. On a volume basis, this equates to a 27.5% increase in EV sales—selling day adjusted—from a year ago. Conversely, demand for non-EVs is muted, with non-EV sales down 2.5% this month from a year ago. The second key driver is affordability. Although again, the EV dynamic means aggregate results need careful evaluation. In totality, average vehicle prices continue to rise, discounts remain low and monthly finance payments are at record highs—all of which affects the overall sales pace.”
emphasis added

From Haig Stoddard at Omdia (pay site): US Light Vehicle Sales in September Tracking to Another Gain as Auto Industry Casts a Wary Eye on 4Q

September US light-vehicle sales will continue the market strength seen all year, but all eyes are on the fourth quarter as tariff-related pull-ahead volume dissipates, EV credits disappear, and automakers price their ’26 models.

Click on graph for larger image.

This graph shows actual sales from the BEA (Blue), and J.D. Power's forecast for September (Red).

On a seasonally adjusted annual rate basis, the J.D. Power forecast of 16.2 million SAAR would be up 0.8% from last month, and up 2.5% from a year ago.

Q4 will likely be more difficult for vehicle sales.

by Calculated Risk on 9/25/2025 02:40:00 PM

Hotel occupancy was weak over the summer months, due to less international tourism.  The fall months are mostly domestic travel and occupancy is still down year-over-year.

From STR: U.S. hotel results for week ending 20 September

The U.S. hotel industry reported negative year-over-year comparisons, according to CoStar’s latest data through 20 September. ...

14-20 September 2025 (percentage change from comparable week in 2024):

• Occupancy: 68.1% (-1.1%)
• Average daily rate (ADR): US$168.98 (-0.3%)
• Revenue per available room (RevPAR): US$115.12 (-1.4%)
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 both 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 increase during the Fall travel period.

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 9/25/2025 10:54:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: NAR: Existing-Home Sales Decreased to 4.00 million SAAR in August

Excerpt:

The fourth graph shows existing home sales by month for 2024 and 2025.

Sales were up 1.8% year-over-year compared to August 2024. Next month will also have an easy year-over-year comparison.
...
On an NSA basis for the month of August, this was 7% above the low for housing bust for the month of August that happened in August 2010. Year-to-date, sales are down 1.2% NSA.

There is much more in the article.

by Calculated Risk on 9/25/2025 10:00:00 AM

From the NAR: NAR Existing-Home Sales Report Shows 0.2% Decrease in August

• 0.2% decrease in total existing-home sales1 month-over-month to a seasonally adjusted annual rate of 4.0 million.

• 1.8% increase in sales year-over-year.

• 1.53 million units: Total housing inventory, down 1.3% from July and up 11.7% from August 2024 (1.37 million).

• 4.6-month supply of unsold inventory, no change from July and up from 4.2 months in August 2024.

• $422,600: Median existing-home price3 for all housing types, up 2.0% from one year ago ($414,200) – the 26th consecutive month of year-over-year price increases.
emphasis added

Click on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1994.

Sales in August (4.00 million SAAR) were down 0.2% from the previous month and were up 1.8% compared to the August 2024 sales rate.  

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory decreased to 1.53 million in August from 1.55 million the previous month.

Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory was up 11.7% year-over-year (blue) in August compared to August 2024.

Months of supply (red) was unchanged at 4.6 months in August from 4.6 months the previous month.

I'll have more later. 

by Calculated Risk on 9/25/2025 08:42:00 AM

From the BEA: Gross Domestic Product, 2nd Quarter 2025 (Third Estimate), GDP by Industry, Corporate Profits (Revised), and Annual Update

Real gross domestic product (GDP) increased at an annual rate of 3.8 percent in the second quarter of 2025 (April, May, and June), according to the third estimate released by the U.S. Bureau of Economic Analysis. In the first quarter, real GDP decreased 0.6 percent (revised).

The increase in real GDP in the second quarter primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP, and an increase in consumer spending. These movements were partly offset by decreases in investment and exports.

Real GDP was revised up 0.5 percentage point from the second estimate, primarily reflecting an upward revision to consumer spending.
emphasis added

Here is a Comparison of Third and Second Estimates. PCE growth was revised up from 1.6% to 2.5%. Residential investment was revised down from -4.7% to -5.1%.

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.