by Calculated Risk on 10/26/2025 06:11:00 PM

Weekend:
• Schedule for Week of October 26, 2025

• FOMC Preview: 25bps Rate Cut Expected

Monday:
• (will not be released due to government shutdown) At 8:30 AM ET, Durable Goods Orders for September from the Census Bureau.

• (will not be released) At 10:00 AM, New Home Sales for September from the Census Bureau.

• At 10:30 AM, Dallas Fed Survey of Manufacturing Activity for October.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 48 and DOW futures are up 320 (fair value).

Oil prices were mixed over the last week with WTI futures at $61.50 per barrel and Brent at $65.94 per barrel. A year ago, WTI was at $68, and Brent was at $72 - so WTI oil prices are down about 10% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.01 per gallon. A year ago, prices were at $3.09 per gallon, so gasoline prices are down $0.08 year-over-year.

by Calculated Risk on 10/26/2025 08:21:00 AM

Most analysts expect the FOMC to reduce the Fed Funds rate by 25bps at the meeting this week to a target range of 3-3/4 to 4 percent.    Market participants currently expect the FOMC to also cut rates an additional 25bps at the December meeting.

From BofA:

The Fed has indicated that it will cut rates by 25bp to 3.75-4.0% at its October meeting. We also expect the FOMC to announce an end to balance sheet runoff. We think the Fed will acknowledge the recent strength of economic activity. But the broader shift in focus toward the labor mandate probably won’t change. Powell is also unlikely to offer much guidance beyond this meeting given the lack of official sector data and the current labor-consumption conundrum.
...
Our base case is that there will again be only one dissent, a dovish one from Governor Miran, who indicated that he would favor a 50bp cut in a recent interview. But we see meaningful risks of at least one hawkish dissent as well.
emphasis added

Projections will NOT be released at this meeting. Here are the September projections.  

The BEA's estimate for first half 2025 GDP showed real growth at 1.6% annualized. Most estimates for Q3 GDP are around 2.8%.  That would put the real growth for the first three quarters at 1.9% annualized - above the top end of the September projections.

GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1
Projection Date	2025	2026	2027
Sept 2025	1.4 to 1.7	1.7 to 2.1	1.8 to 2.0
Jun 2025	1.2 to 1.5	1.5 to 1.8	1.7 to 2.0

¹ Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.

The unemployment rate was at 4.3% in August.  The unemployment rate will likely increase further this year.  There was no data for September due to the government shutdown.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2
Projection Date	2025	2026	2027
Sept 2025	4.4 to 4.5	4.4 to 4.5	4.2 to 4.4
Jun 2025	4.4 to 4.5	4.3 to 4.6	4.2 to 4.6

² Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of August 2025, PCE inflation increased 2.y% year-over-year (YoY), up from 2.6% YoY in July. 

Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1
Projection Date	2025	2026	2027
Sept 2025	2.9 to 3.0	2.4-2.7	2.0 to 2.2
Jun 2025	2.8 to 3.2	2.3-2.6	2.0 to 2.2

PCE core inflation increased 2.9% YoY in August, unchanged from 2.9% YoY in July.  There will likely be further increases in core PCE inflation, although CPI measured inflation was below expectations in September.

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1
Projection Date	2025	2026	2027
Sept 2025	3.0 to 3.2	2.5-2.7	2.0 to 2.2
Jun 2025	2.9 to 3.4	2.3-2.6	2.0 to 2.2

by Calculated Risk on 10/25/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• NAR: Existing-Home Sales Increased to 4.06 million SAAR in September

• NMHC on Apartments: Market conditions "Soften" in Q3

• Lawler: Early Read on September Existing Home Sales, and Update on MBS Yields and Spreads

• 2nd Look at Local Housing Markets in September

• California Home Sales Up 6.6% Year-over-year SAAR in September

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

by Calculated Risk on 10/25/2025 08:11:00 AM

Boo!

The FOMC meets this week and is expected to cut rates 25bp.

The key economic reports that will be released this week include the Case-Shiller house price index for August, and October ISM manufacturing and services indexes.

Items in Red will not be released due to the government shutdown.

----- Monday, October 27th -----
8:30 AM: Durable Goods Orders for September from the Census Bureau.

​10:00 AM: New Home Sales for September from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the sales rate for last month.

10:30 AM: Dallas Fed Survey of Manufacturing Activity for October.

----- Tuesday, October 28th -----
9:00 AM ET: S&P/Case-Shiller House Price Index for August.  The consensus is for the National index to be up 1.9% year-over-year.

This graph shows the year-over-year change in the nominal seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the most recent report (the Composite 20 was started in January 2000).

9:00 AM: FHFA House Price Index for August. This was originally a GSE only repeat sales, however there is also an expanded index.

10:00 AM: The Q3 Housing Vacancies and Homeownership report from the Census Bureau.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for October.  This is the last regional Fed survey for October.

----- Wednesday, October 29th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM: Pending Home Sales Index for September. 

2:00 PM: FOMC Meeting Announcement. The Fed is expected to cut rates 25bp at this meeting.

2:30 PM: Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.

----- Thursday, October 30th -----
8:30 AM: The initial weekly unemployment claims report will be released.

8:30 AM: Gross Domestic Product, 3rd quarter 2025 (advance estimate).

----- Friday, October 31st -----
8:30 AM ET: Personal Income and Outlays for September.

9:45 AM: Chicago Purchasing Managers Index for October. The consensus is for a reading of 42.0, up from 40.6 in September.

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).