by Calculated Risk on 11/26/2025 04:25:00 PM

From Intercontinental Exchange: ICE First Look at Mortgage Performance: Increased Refinance Activity Drives Mortgage Prepayments to 3.5-Year High

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

“Softening mortgage rates expanded the pool of refinance candidates in October, pushing prepayments to their highest level in three and a half years,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “This trend was largely driven by people who purchased homes at elevated rates in recent years seizing the opportunity to lower their monthly payments.”

“Overall mortgage health remains solid, with continued improvement in delinquency rates across all stages,” continued Walden. “While foreclosure activity has ticked up, levels remain historically low. This uptick is driven by a rise in FHA foreclosures along with the resumption in VA foreclosures following last year's moratorium."

Key takeaways from this month’s findings include:

• Delinquencies improved: The national delinquency rate fell by 7 basis points (bps) in October to 3.34%. This is down 11 bps from the same time last year and 53 bps below the October 2019 pre-pandemic benchmark.

• Broad strength in delinquency rates: Performance improved across the board, with both early-stage (30-day) and late-stage (90+ day) delinquencies declining during the month.

• Prepayments reached a multi-year high: The single month mortality (SMM) rate, which tracks prepayments, rose by 27 bps in October to 1.01%. This marks the highest level in 3.5 years and an increase of 16 bps from last year when interest rates were at similar levels.

• Foreclosure activity trending upward: Although October foreclosure starts slowed by 9.8% from the prior month, the overall trend continues to rise. Foreclosure inventory is up by 37,000 (+19%) year over year, and foreclosure sales have increased by 1,900 (+32%) from last year's levels.

• Government loans driving foreclosure growth: While foreclosure activity remains muted by historical standards, the number of loans in active foreclosure hit its highest level since early 2023, driven by a notable rise in FHA foreclosures (+50% YoY) along with a resumption of VA activity following last year's moratorium.
emphasis added

Click on graph for larger image.

Here is a table from ICE.

by Calculated Risk on 11/26/2025 02:00:00 PM

Beige Book - November 2025

Economic activity was little changed since the previous report, according to most of the twelve Federal Reserve Districts, though two Districts noted a modest decline and one reported modest growth. Overall consumer spending declined further, while higher-end retail spending remained resilient. Some retailers noted a negative impact on consumer purchases from the government shutdown, and auto dealers saw declines in EV sales following the expiration of the federal tax credit. Reports of travel and tourism activity reflected little change in recent weeks, with some contacts noting cautious discretionary spending among consumers. Manufacturing activity increased somewhat, according to most Districts, though tariffs and tariff uncertainty remained a headwind. Revenues in the nonfinancial services sector were mostly flat to down, and reports of loan demand were mixed. Some Districts reported declines in residential construction, while others said it was unchanged, and home sales activity varied. A few Districts noted ongoing recovery in the office real estate market. Conditions in the agriculture and energy sectors were largely stable, though some contacts cited challenges from the low-price environment for oil and for some crops. Community organizations saw increased demand for food assistance, due in part to disruptions in SNAP benefits during the government shutdown. Outlooks were largely unchanged overall. Some contacts noted an increased risk of slower activity in coming months, while some optimism was noted among manufacturers.

Labor Markets

Employment declined slightly over the current period with around half of Districts noting weaker labor demand. Despite an uptick in layoff announcements, more Districts reported contacts limiting headcounts using hiring freezes, replacement-only hiring, and attrition than through layoffs. In addition, several employers adjusted hours worked to accommodate higher or lower than expected business volume instead of adjusting the number of employees. A few firms noted that artificial intelligence replaced entry-level positions or made existing workers productive enough to curb new hiring. Across most Districts, employers had an easier time finding workers, but there were still pockets of difficulty related to certain skilled positions and fewer immigrant workers. Wages generally grew at a modest pace; however, some sectors such as manufacturing, construction, and health care experienced more moderate wage pressure because of a tighter labor supply. Furthermore, rising health insurance premiums continue to put upward pressure on labor costs.

Prices

Prices rose moderately during the reporting period. Input cost pressures were widespread in manufacturing and retail, largely reflecting tariff-induced increases. Some Districts noted rising costs for insurance, utilities, technology, and health care. The extent of passthrough of higher input costs to customers varied, and depended upon demand, competitive pressures, price sensitivity of consumers, and pushback from clients. There were multiple reports of margin compression or firms facing financial strain stemming from tariffs. Prices declined for certain materials, which firms attributed to sluggish demand, deferred tariff implementation, or reduced tariff rates. Looking ahead, contacts largely anticipate upward cost pressures to persist but plans to raise prices in the near term were mixed.
emphasis added

by Calculated Risk on 11/26/2025 10:31:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Up 1.0% Year-over-Year in September

A brief excerpt:

Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.13% month-over-month (MoM) on a seasonally adjusted (SA) basis in October.

On a year-over-year (YoY) basis, the National FMHPI was up 1.0% in October, down from up 1.1% YoY in September. The YoY increase peaked at 19.2% in July 2021, and for this cycle, and previously bottomed at up 1.1% YoY in April 2023. The YoY change in October is a new cycle low. ...

As of October, 26 states and D.C. were below their previous peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peaks are in D.C. (-3.2%), Florida (-3.0%) and Texas (-2.5%).

For cities (Core-based Statistical Areas, CBSA), 200 of the 387 CBSAs are below their previous peaks.

Here are the 30 cities with the largest declines from the peak, seasonally adjusted. Punta Gorda has passed Austin as the worst performing city. Note that 5 of the 7 cities with the largest price declines are in Florida.

Florida has the largest number of CBSAs on the list and Texas has the 2nd most.

There is much more in the article!

by Calculated Risk on 11/26/2025 08:30:00 AM

The DOL reported:

In the week ending November 22, the advance figure for seasonally adjusted initial claims was 216,000, a decrease of 6,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 220,000 to 222,000. The 4-week moving average was 223,750, a decrease of 1,000 from the previous week's revised average. The previous week's average was revised up by 500 from 224,250 to 224,750.
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 223,750.

by Calculated Risk on 11/25/2025 08:13:00 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 8:30 AM, The initial weekly unemployment claims report will be released.  

• Also at 8:30 AM, Durable Goods Orders for September from the Census Bureau.

• At 9:45 AM, Chicago Purchasing Managers Index for November. 

• At 2:00 PM, the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

by Calculated Risk on 11/25/2025 03:21:00 PM

On a monthly basis, retail sales increased 0.2% from August to September (seasonally adjusted), and sales were up 4.3 percent from September 2024.

From the Census Bureau report:

dvance estimates of U.S. retail and food services sales for September 2025, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $733.3 billion, up 0.2 percent from the previous month, and up 4.3 percent from September 2024. ... The July 2025 to August 2025 percent change was unrevised from up 0.6 percent.
emphasis added

Click on graph for larger image.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

Retail sales ex-gasoline was unchanged in September.

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail and Food service sales, ex-gasoline, increased by 4.4% on a YoY basis.

The change in sales in September were below expectations, however, the previous two months were revised up slightly.

by Calculated Risk on 11/25/2025 01:02:00 PM

Today, in the Calculated Risk Real Estate Newsletter: FHFA Announces Baseline Conforming Loan Limit Will Increase to $832,750 in 2026

A brief excerpt:

After the release of the FHFA house price index for September this morning, the FHFA released the conforming loan limits for 2026.

From the FHFA: FHFA Announces Conforming Loan Limit Values for 2025

U.S. Federal Housing (FHFA) today announced the conforming loan limit values (CLLs) for mortgages Fannie Mae and Freddie Mac (the Enterprises) will acquire in 2026. In most of the United States, the 2026 CLL value for one-unit properties will be $832,750, an increase of $26,250 from 2025. ….

For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit value, the applicable loan limit will be higher than the baseline loan limit. HERA establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting the ceiling at 150 percent of the baseline limit. Median home values generally increased in high-cost areas in 2025, which increased their CLL values. The new ceiling loan limit for one-unit properties will be $1,249,125, which is 150 percent of $832,750

Note that there are different loan limits for various geographical areas. There are also different loan limits depending on the number of units (from 1 to 4 units). For example, next year the CLL is $832,750 for one-unit properties in low-cost areas. The four-unit limit is $1,601,750.

For high-cost areas like Los Angeles County, the CLL is $1,249,125 for one-unit properties (50% higher than the baseline CLL) and the four-unit limit is $2,402,625.

There is more in the article.

by Calculated Risk on 11/25/2025 10:36:00 AM

From the NAR: NAR Pending Home Sales Report Shows 1.9% Increase in October

Pending home sales in October increased by 1.9% from the prior month and fell 0.4% year over year, according to the National Association of REALTORS® Pending Home Sales Report. ...

Month-Over-Month
1.9% increase in pending home sales
Gains in the Northeast, Midwest and South; decline in the West

Year Over Year
0.4% decrease in pending home sales
Gains in the Midwest and South; decline in the Northeast and West
emphasis added

Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in November and December.

by Calculated Risk on 11/25/2025 09:58:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Case-Shiller: National House Price Index Up 1.3% year-over-year in September

Excerpt:

S&P/Case-Shiller released the monthly Home Price Indices for September (”September” is a 3-month average of July, August and September closing prices). July closing prices include some contracts signed in May, so there is a significant lag to this data. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).

This is the 2nd consecutive month with a slight MoM increase seasonally adjusted.

There is much more in the article.

by Calculated Risk on 11/25/2025 09:00:00 AM

S&P/Case-Shiller released the monthly Home Price Indices for September ("September" is a 3-month average of July, August and September closing prices).

This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.

From S&P S&P Cotality Case-Shiller Index Records Annual Gain in September 2025

• The S&P Cotality Case-Shiller U.S. National Home Price NSA Index posted a 1.3% annual gain for September, down from a 1.4% rise in the previous month.

• Inflation outpaced home prices for a fourth straight month, with September’s CPI running 1.7 percentage points above housing appreciation—the widest gap since the measures began diverging in June.

• All 20 metros recorded month-over-month declines before seasonal adjustment in September, underscoring broad-based weakening as elevated mortgage rates weigh on affordability and demand.

S&P Dow Jones Indices (S&P DJI) today released the September 2025 results for the S&P Cotality Case-Shiller Indices.

Please note that September 2025 transaction records for Wayne County, MI, are delayed at the local recording office. Since Wayne is the most populous county in the Detroit metro area, Cotality is not able to generate a valid September 2025 update of the Detroit S&P Cotality Case-Shiller Index before the November 25, 2025, release date. ...

"The housing market's deceleration accelerated in September, with the National Composite posting just a 1.3% annual gain—the weakest performance since mid-2023,” said Nicholas Godec, CFA, CAIA, CIPM, Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices. “This marks a continued slide from August’s 1.4% increase and represents a stark contrast to the double-digit gains that characterized the early post-pandemic era. National home prices continued trailing inflation, with September’s CPI running 1.7 percentage points ahead of housing appreciation. This marks the widest gap between inflation and home-price growth since the two measures diverged in June, with the spread continuing to widen each month.

“Regional performance reveals a tale of two markets. Chicago continues to lead with a 5.5% annual gain, followed by New York at 5.2% and Boston at 4.1%. These Northeastern and Midwestern metros have sustained momentum even as broader market conditions soften. At the opposite extreme, Tampa posted a 4.1% annual decline—the sharpest drop among tracked metros and its 11th consecutive month of negative annual returns. Phoenix (-2.0%), Dallas (-1.3%), and Miami (-1.3%) likewise remained in negative territory, highlighting particular weakness in Sun Belt markets that experienced the most dramatic pandemic-era price surges.
...
The S&P Cotality Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 1.3% annual gain for September, down from a 1.4% rise in the previous month. The 10-City Composite showed an annual increase of 2.0%, down from a 2.1% increase in the previous month. The 20-City Composite posted a year-over-year increase of 1.4%, down from a 1.6% increase in the previous month.
...
The pre-seasonally adjusted U.S. National, 10-City Composite, and 20-City Composite Indices continued to report negative month-over-month changes in September, posting -0.3% for the U.S. National Index and -0.5% for both the 10-City and 20-City Composite Indices.

After seasonal adjustment, the U.S. National and 10-City Composite Indices reported a monthly increase of 0.2% and the 20-City Composite Indices posted a month-over-month gain of 0.1%. emphasis added

Click on graph for larger image.

The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

The Composite 10 index was up 0.2% in September (SA).  The Composite 20 index was up 0.1% (SA) in September.

The National index was up 0.2% (SA) in September.

The second graph shows the year-over-year change in all three indices.

The Composite 10 NSA was up 2.0% year-over-year.  The Composite 20 NSA was up 1.4% year-over-year.

The National index NSA was up 1.3% year-over-year.

Annual price changes were below expectations.  I'll have more later.