by Calculated Risk on 10/24/2025 04:00:00 PM

From Intercontinental Exchange: ICE First Look at Mortgage Performance: Mortgage Performance Remains Strong as FHA Foreclosures Emerge

Intercontinental Exchange, Inc. (NYSE:ICE) ... today released the September 2025 ICE First Look at mortgage delinquency, foreclosure and prepayment trends.

The data shows that overall mortgage performance remains historically strong, with both delinquencies and foreclosure activity remaining below long-term averages. While some shifts are emerging among government-backed loan segments, these trends largely represent a normalization of market dynamics rather than broad-based weakness.

“The mortgage market remains remarkably resilient, with mortgage performance continuing to hold up well,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “Delinquency rates improved in September, and even as we see increases in activity among FHA loans, we’re largely returning to more typical levels following several years of artificially low foreclosure volumes.”

Key takeaways from this month’s findings include:

• Delinquencies remain well below pre-pandemic norms: The national delinquency rate fell by 2 basis points (bps) in September to 3.42%, down 6 bps from the same time last year and 58 bps below its September 2019 pre-pandemic level.

• Strength across delinquency bands in September: Both early-stage (30-day) and late-stage (90+ day) delinquencies improved month-over-month, as the vast majority of borrowers remain current on their mortgage payments.

• Non-current rates improved for most investors: The non-current rate (delinquencies plus active foreclosures) declined year-over-year among GSE (-3 bps), VA (-4 bps) and portfolio-held loans (-17 bps). FHA loans were the notable exception, rising by 44 bps from last year’s levels.

• Foreclosure activity is returning to normal ranges: There were 103,000 foreclosure starts in Q3 2025, a 23% increase from the same period last year, but 18% below Q3 2019’s pre-pandemic levels.

• Improving efficiency in resolution: The number of loans in active foreclosure rose modestly year-over-year (18%), yet overall foreclosure volume remains historically low, with Q3 foreclosure sales (21,000) at roughly half of 2019 levels. FHA loans account for the majority of that rise, making up 38% of active foreclosures, roughly half of the annual rise in foreclosure starts and 80% of the rise in active foreclosures. The resumption of VA foreclosure activity following last year’s moratorium is largely responsible for the remainder.

• Prepayments are edging higher: Prepayments rose by 8 bps in September to a 0.74% single month mortality (SMM) rate, a 15% increase from the prior year, as interest rates began to ease in August.
emphasis added

Click on graph for larger image.

Here is a table from ICE.

by Calculated Risk on 10/24/2025 01:03:00 PM

The Cleveland Fed released the median CPI and the trimmed-mean CPI.

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% in August. The 16% trimmed-mean Consumer Price Index increased 0.2%. "The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report".

Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. 

On a year-over-year basis, the median CPI rose 3.5% (down from 3.6% YoY in August), the trimmed-mean CPI rose 3.2% (down from 3.3%), and the CPI less food and energy rose 3.0% (down from 3.1%). 

Core PCE is for August was up 2.9% YoY, unchanged from 2.9% in July.  

by Calculated Risk on 10/24/2025 10:36:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: NMHC on Apartments: Market conditions "Soften" in Q3

Excerpt:

From the NMHC: Borrowing Conditions Continue to Improve While Most Respondents Report an Unchanged Market

Market Tightness Index (31) came in well below the breakeven level of 50 this round, indicating lower rent growth and higher vacancies compared to July, while the Sales Volume Index (59), Equity Financing Index (57), and Debt Financing Index (78) signaled improved market conditions.

“A softening labor market combined with high levels of new apartment supply is resulting in slowing rent growth in many parts of the country,” noted NMHC’s Chief Economist, Chris Bruen. “This continues to be most pronounced in sunbelt markets, many of which are currently seeing falling rents.”

“We’ve seen a modest decline in long-term interest rates over the past three months—the 10-Year Treasury Yield is currently down 28 basis points (bps) from July—resulting in improved conditions for debt financing and an uptick in apartment deal flow.”
...
• The Market Tightness Index came in at 31 this quarter, indicating looser market conditions. Only 9% of respondents thought market conditions were tighter compared to three months ago, 47% of respondents thought conditions had become looser, while 43% reported unchanged market conditions relative to July.

There is much more in the article.

by Calculated Risk on 10/24/2025 09:00:00 AM

With the release of the CPI report this morning, we now know the Cost of Living Adjustment (COLA), and the contribution base for 2026.

From Social Security: Social Security Announces 2.8 Percent Benefit Increase for 2026

The Social Security Administration (SSA) announced today that Social Security benefits, including Old-Age, Survivors, and Disability Insurance (OASDI), and Supplemental Security Income (SSI) payments for 75 million Americans will increase 2.8 percent in 2026. On average, Social Security retirement benefits will increase by about $56 per month starting in January.
...
Other adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) is slated to increase to $184,500 from $176,100.

Currently CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). Here is a discussion from Social Security on the current calculation (2.8% increase) and a list of previous Cost-of-Living Adjustments.

The contribution and benefit base will be $184,500 in 2026.

The National Average Wage Index increased to $69,846.57 in 2024, up 4.84% from $66,621.80 in 2023 (used to calculate contribution base). 

by Calculated Risk on 10/24/2025 08:30:00 AM

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent on a seasonally adjusted basis in September, after rising 0.4 percent in August, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.0 percent before seasonal adjustment. Note that September CPI data collection was completed before the lapse in appropriations.

The index for gasoline rose 4.1 percent in September and was the largest factor in the all items monthly increase, as the index for energy rose 1.5 percent over the month. The food index increased 0.2 percent over the month as the food at home index rose 0.3 percent and the food away from home index increased 0.1 percent.

The index for all items less food and energy rose 0.2 percent in September, after rising 0.3 percent in each of the 2 preceding months. Indexes that increased over the month include shelter, airline fares, recreation, household furnishings and operations, and apparel. The indexes for motor vehicle insurance, used cars and trucks, and communication were among the few major indexes that decreased in September.

The all items index rose 3.0 percent for the 12 months ending September, after rising 2.9 percent over the 12 months ending August. The all items less food and energy index also rose 3.0 percent over the last 12 months. The energy index increased 2.8 percent for the 12 months ending September. The food index increased 3.1 percent over the last year.
emphasis added

The change in CPI was slightly below expectations. I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.

by Calculated Risk on 10/23/2025 08:17:00 PM

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

Friday:
• At 8:30 AM ET, The Consumer Price Index for September from the BLS. 

The consensus is for a 0.4% increase in CPI, and a 0.3% increase in core CPI.  The consensus is for CPI to be up 3.1% year-over-year (up from 2.9% in August) and core CPI to be up 3.1% YoY (unchanged from 3.1% in August).

by Calculated Risk on 10/23/2025 02:49:00 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 under pressure!

From STR: U.S. hotel results for week ending 18 October

The U.S. hotel industry reported mixed year-over-year comparisons, according to CoStar’s latest data through 18 October. ...

12-18 October 2025 (percentage change from comparable week in 2024):

• Occupancy: 68.5% (-2.4%)
• Average daily rate (ADR): US$173.14 (+1.7%)
• Revenue per available room (RevPAR): US$118.65 (-0.7%)
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 black 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 decrease seasonally until early next year.

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

Here are some Hotel executive comments from a recent conference: 'Uncertainty is bad for business': Hotel executives express discontent with unpredictability

"What's tough on our industry always is uncertainty," said Joe Berger, president and CEO of BRE Hotels & Resorts. "It's been a tough year to navigate."

Leeny Oberg, chief financial officer and executive vice president of development at Marriott International, said there's frequently a new tariff announcement or comment made toward another country that is affecting the planning process. That process is very sequential, so the timing of some of these announcements can really throw off the execution of hotel projects midway through, she said.

"You've got all these people trying to make plans about their cutbacks and what they're trying to do with their properties, and it's literally every week or every day there's a new announcement. 'Oh, it's furniture today,' or, 'Oh, it's this country today.' From a planning perspective, it makes it extremely difficult," she said.

One of the larger subplots of the year has been the decline in Canadian travel to the U.S., due in large part to comments made from President Donald Trump on America's neighboring country. In August, Tourism Economics projected a 20.2% decline in Canadian travel to the U.S. on the year.

by Calculated Risk on 10/23/2025 11:04:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: NAR: Existing-Home Sales Increased to 4.06 million SAAR in September

Excerpt:

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

Sales were up 4.1% year-over-year compared to September 2024. This was the easiest year-over-year comparison.
...
On an NSA basis for the month of September, this was 11% above the low for housing bust for the month of September that happened in September 2010. Year-to-date, sales are down 0.2% NSA.

There is much more in the article.

by Calculated Risk on 10/23/2025 10:00:00 AM

From the NAR: NAR Existing-Home Sales Report Shows 1.5% Increase in September

Month-over-month

• 1.5% increase in existing-home sales – seasonally adjusted annual rate of 4.06 million in September

• 1.3% increase in unsold inventory – 1.55 million units equal to 4.6 months' supply

Year-over-year

• 4.1% increase in existing-home sales

• 2.1% increase in median existing-home sales price to $415,200
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 September (4.06 million SAAR) were up 1.5% from the previous month and were up 4.1% compared to the September 2024 sales rate.  

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 1.55 million in September from 1.53 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 14.0% year-over-year (blue) in September compared to September 2024.

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

I'll have more later. 

by Calculated Risk on 10/22/2025 07:49:00 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. (WILL NOT BE RELEASED)

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

• At 10:00 AM, Existing Home Sales for September from the National Association of Realtors (NAR). The consensus is for the NAR to report sales of 4.06 million SAAR. Last year, the NAR reported sales in September 2024 at 3.90 million SAAR. 

Housing economist Tom Lawler expects the NAR to report sales of 4.00 million SAAR for September.

• At 11:00 AM, Kansas City Fed Survey of Manufacturing Activity for October.<