by Calculated Risk on 12/23/2025 11:14:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Final Look at Housing Markets in November and a Look Ahead to December Sales

A brief excerpt:

After the National Association of Realtors® (NAR) releases the monthly existing home sales report, I pick up additional local market data that is reported after the NAR. This is the final look at local markets in November.

There were several key stories for November:

• Sales NSA are down 0.5% YoY through November, and sales last year were the lowest since 1995!

• Sales SAAR (seasonally adjusted annual rate) have bounced around 4 million for the last 3 years.

• Months-of-supply is above pre-pandemic levels.

• The median price is up 1.2% YoY, and with the increases in inventory, some regional areas will see further price declines - and we might see national price declines sometime in 2026.

The median price is up 1.2% YoY, and with the increases in inventory, some regional areas will see further price declines - and we might see national price declines sometime in 2026.

Sales averaged close to 5.42 million SAAR for the month of November in the 2017-2019 period. So, sales are about 24% below pre-pandemic levels.
...
In November, sales in these markets were down 6.5% YoY. Last month, in October, these same markets were up 2.3% year-over-year Not Seasonally Adjusted (NSA). The NAR reported sales were down 7.0% YoY in November, very close to this market sample.

Important: There was one fewer working days in November 2025 (18) as in November 2024 (19). So, the year-over-year change in the headline SA data was more than the change in NSA data (there are other seasonal factors).
...
More local data coming in January for activity in December!

There is much more in the article.

by Calculated Risk on 12/23/2025 09:15:00 AM

From the Fed: Industrial Production and Capacity Utilization

This release includes preliminary estimates for industrial production (IP) and capacity utilization for both October and November as well as revised estimates for May through September. IP rose 0.2 percent in November after ticking down 0.1 percent in October. On average, IP rose 0.1 percent per month across October and November, the same as the rate of increase in September and a somewhat slower average pace than the past 12 months. Manufacturing output was flat in November after dropping 0.4 percent in October. There were swings in both mining and utilities output over October and November, though, on net, both sectors posted gains. At 101.8 percent of its 2017 average, total IP in November was 2.5 percent above its year-earlier level. Capacity utilization was 76.0 percent in November, a rate that is 3.5 percentage points below its long-run (1972–2024) average.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and close to the level in February 2020 (pre-pandemic).

Capacity utilization at 76.0% is 3.5% below the average from 1972 to 2023.  This was close to consensus expectations.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production increased to 101.8. This is at the pre-pandemic level.

Industrial production was close to consensus expectations.

by Calculated Risk on 12/23/2025 08:30:00 AM

From the BEA: Gross Domestic Product, 3rd Quarter 2025 (Initial Estimate) and Corporate Profits (Preliminary)

Real gross domestic product (GDP) increased at an annual rate of 4.3 percent in the third quarter of 2025 (July, August, and September), according to the initial estimate released by the U.S. Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent.

Due to the recent government shutdown, this initial report for the third quarter of 2025 replaces the release of the advance estimate originally scheduled for October 30 and the second estimate originally scheduled for November 26.br />
The increase in real GDP in the third quarter reflected increases in consumer spending, exports, and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased. ...

Compared to the second quarter, the acceleration in real GDP in the third quarter reflected a smaller decrease in investment, an acceleration in consumer spending, and upturns in exports and government spending. Imports decreased less in the third quarter.

Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 3.0 percent in the third quarter, compared with an increase of 2.9 percent in the second quarter.

The price index for gross domestic purchases increased 3.4 percent in the third quarter, compared with an increase of 2.0 percent in the second quarter. The personal consumption expenditures (PCE) price index increased 2.8 percent, compared with an increase of 2.1 percent. Excluding food and energy prices, the PCE price index increased 2.9 percent, compared with an increase of 2.6 percent.
emphasis added

PCE increased at a 3.5% annual rate, and residential investment decreased at a 5.1% rate. The initial Q3 GDP report, with 4.3% annualized increase, was above expectations.

by Calculated Risk on 12/22/2025 07:11:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Hold Steady to Start Holiday-Shortened Week

Mortgage rates are tied to movement in the bond market and bonds were close enough to Friday's levels that mortgage rates were essentially unchanged today. This keeps the average lender in the lower portion of the narrow range seen over the past 4 months. [30 year fixed 6.24%]
emphasis added

Tuesday:
• At 8:30 AM ET, Durable Goods Orders for November.  The consensus is for a 0.4% increase.

• Also at 8:30 AM: Gross Domestic Product, 3rd Quarter 2025 (Initial Estimate) and Corporate Profits (Preliminary). The consensus is that real GDP increased 3.2% annualized in Q3, down from 3.8% in Q2.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for October. The consensus is for a 0.1% increase in Industrial Production, and for Capacity Utilization to be unchanged at 75.9%.

• At 10:00 AM, Richmond Fed Survey of Manufacturing Activity for December.

by Calculated Risk on 12/22/2025 11:00:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: Question #10 for 2026: Will inventory increase further in 2026?

Excerpt:

Earlier I posted some questions on my blog for next year: Ten Economic Questions for 2026. Some of these questions concern real estate (inventory, house prices, housing starts, new home sales), and I’ll post thoughts on those in this newsletter (others like GDP and employment will be on my blog).

I'm adding some thoughts, and maybe some predictions for each question.

Here is a review of the Ten Economic Questions for 2025.

10) Housing Inventory: Housing inventory decreased sharply during the pandemic to record lows in early 2022. Since then, inventory has increased but is still below pre-pandemic levels. Will inventory increase further in 2026?

First, a brief history. Here are a few times when watching existing home inventory helped my analysis.

Starting in January 2005, I was very bearish on housing, but I wasn’t sure when the market would turn. Speculative bubbles can go on and on. However, the increase in existing home inventory in late 2005 (see red arrow on graph below) helped me call the top for house prices in 2006.

There is much more in the article.

by Calculated Risk on 12/22/2025 08:11:00 AM

Altos reports that active single-family inventory was down 2.3% week-over-week.  Inventory usually declines sharply during the holiday season.

The first graph shows the seasonal pattern for active single-family inventory since 2015.

Click on graph for larger image.

The red line is for 2025.  The black line is for 2019.  

Inventory was up 13.5% compared to the same week in 2024 (last week it was up 13.7%), and down 5.7% compared to the same week in 2019 (last week it was down 5.6%). 

Inventory started 2025 down 22% compared to 2019.  Inventory has closed most of that gap, however inventory will still be below 2019 levels at the end of 2025.

This second inventory graph is courtesy of Altos Research.

As of December 19th, inventory was at 758 thousand (7-day average), compared to 775 thousand the prior week.  

Mike Simonsen discusses this data and much more regularly on YouTube

by Calculated Risk on 12/21/2025 06:56:00 PM

Weekend:
• Schedule for Week of December 21, 2025

• Ten Economic Questions for 2026

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

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 21 and DOW futures are up 100 (fair value).

Oil prices were down over the last week with WTI futures at $56.79 per barrel and Brent at $60.76 per barrel. A year ago, WTI was at $70, and Brent was at $73 - so WTI oil prices are down about 19% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.80 per gallon. A year ago, prices were at $3.01 per gallon, so gasoline prices are down $0.21 year-over-year.

by Calculated Risk on 12/21/2025 08:21:00 AM

Here is a review of the Ten Economic Questions for 2025.

Below are my ten questions for 2026 (I've been doing this online every year for 21 years!).  These are just questions; I'll follow up with some thoughts on each of these questions.

The purpose of these questions is to provide a framework of how the U.S. economy will likely perform in 2026, and if there are surprises - like in 2020 with the pandemic - to adjust my thinking.

  

1) Economic growth: Economic growth was probably close to 2% Q4-over-Q4 in 2025.  The FOMC is expecting growth of 2.1% to 2.5% Q4-over-Q4 in 2026. How much will the economy grow in 2026?  Will there be a recession in 2026?

2) Employment: Through November 2025, the economy added 610 thousand jobs in 2025.   How many jobs will be added in 2026?  Or will the economy lose jobs? 

3) Unemployment Rate: The unemployment rate was at 4.6% in November, up from 4.2% in November 2024.   Currently the FOMC is projecting the unemployment rate will decrease to the 4.3% to 4.4% range in Q4 2026.  What will the unemployment rate be in December 2026?

4) Participation Rate: In November 2025, the overall participation rate was at 62.5%, unchanged year-over-year from 62.5% in November 2024, and below the pre-pandemic level of 63.3% in February 2020.   Long term, the BLS is projecting the overall participation rate will decline to 61.1% by 2034 due to demographics.  What will the participation rate be in December 2026?

5) Inflation: Core PCE was up 2.8% YoY through September. This was down from a peak of 5.6% in early 2022.  The FOMC is forecasting the YoY change in core PCE will be in the 2.4% to 2.6% range in Q4 2025. Will the core inflation rate decrease further in 2026, and what will the YoY core inflation rate be in December 2026? 

6) Monetary Policy:  The FOMC cut the federal funds rate three times in 2025 from "4-1/4 to 4-1/2 percent" at the beginning of 2025, to "3-1/2 to 3-3/4" at the end of the year. The mid-range on the "dot plot" suggests many FOMC participants expect around one to two 25 bp rate cuts in 2026.  What will the Fed Funds rate be in December 2026?

7) Wage Growth: Wage growth was decent in 2025, up 3.5% year-over-year as of November.  How much will wages increase in 2026?

8) Residential Investment: How much will Residential investment (RI)  change in 2026?  How about housing starts and new home sales in 2026?

9) House Prices: It appears house prices - as measured by the national repeat sales index (Case-Shiller, FHFA, and Freddie Mac) - will be mostly flat in 2025.  What will happen with house prices in 2026?

10) Housing Inventory: Housing inventory decreased sharply during the pandemic to record lows in early 2022.  Since then, inventory has increased but is still below pre-pandemic levels.  Will inventory increase further in 2026?

by Calculated Risk on 12/20/2025 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 4.13 million SAAR in November

• Lawler: Another Strange NAR Reading on Northeast Median Sales Prices

• Lawler: Early Read on Existing Home Sales in November and Update on Mortgage/MBS Yields and Spreads

• Part 1: Current State of the Housing Market; Overview for mid-December 2025

• Part 2: Current State of the Housing Market; Overview for mid-December 2025

• 3rd Look at Local Housing Markets in November

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

by Calculated Risk on 12/20/2025 07:37:00 AM

Happy Holidays and Merry Christmas!

Special Note: There is still uncertainty on when some economic reports will be released. For example, we are still missing housing starts and new home sales for September, October and November.

The key economic report this week is Q3 GDP.

----- Monday, December 22nd -----
8:30 AM: Chicago Fed National Activity Index for November. This is a composite index of other data.

----- Tuesday, December 23rd -----
8:30 AM: Durable Goods Orders for November.  The consensus is for a 0.4% increase.

8:30 AM: Gross Domestic Product, 3rd Quarter 2025 (Initial Estimate) and Corporate Profits (Preliminary). The consensus is that real GDP increased 3.2% annualized in Q3, down from 3.8% in Q2.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for October.

This graph shows industrial production since 1967.

The consensus is for a 0.1% increase in Industrial Production, and for Capacity Utilization to be unchanged at 75.9%.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for December.

----- Wednesday, December 24th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 225,000 initial claims, up from 224,000 last week.

The NYSE and the NASDAQ will close early at 1:00 PM ET.

----- Thursday, December 25th -----
All US markets will be closed in observance of the Christmas Holiday.

----- Friday, December 26th -----
No major economic releases scheduled.