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Tuesday, May 13, 2025

YoY Measures of Inflation: Services, Goods and Shelter

by Calculated Risk on 5/13/2025 08:46:00 AM

Here are a few measures of inflation:

The first graph is the one Fed Chair Powell had mentioned two years ago when services less rent of shelter was up around 8% year-over-year.  This declined and is now up 3.3% YoY.

Services ex-ShelterClick on graph for larger image.

This graph shows the YoY price change for Services and Services less rent of shelter through April 2025.


Services were up 3.7% YoY as of April 2025, unchanged from 3.7% YoY in March.

Services less rent of shelter was up 3.3% YoY in April, unchanged from 3.3% YoY in March.

Goods CPIThe second graph shows that goods prices started to increase year-over-year (YoY) in 2020 and accelerated in 2021 due to both strong demand and supply chain disruptions.

Durables were at -1.4% YoY as of April 2025, down from -1.0% YoY in March.

Commodities less food and energy commodities were at 0.2% YoY in April, up from 0.0% YoY in March.

ShelterHere is a graph of the year-over-year change in shelter from the CPI report (through April) and housing from the PCE report (through March)

Shelter was up 4.0% year-over-year in April, unchanged from 4.0% in March. Housing (PCE) was up 4.3% YoY in March, unchanged from 4.3% in February.

This is still catching up with private new lease data.

Core CPI ex-shelter was up 1.8% YoY in April.  This key measure has been at or below the Fed's target for 8 of the last 12 months.

BLS: CPI Increased 0.2% in April; Core CPI increased 0.2%

by Calculated Risk on 5/13/2025 08:30:00 AM

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis in April, after falling 0.1 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.3 percent before seasonal adjustment.

The index for shelter rose 0.3 percent in April, accounting for more than half of the all items monthly increase. The energy index also increased over the month, rising 0.7 percent as increases in the natural gas index and the electricity index more than offset a decline in the gasoline index. The index for food, in contrast, fell 0.1 percent in April as the food at home index decreased 0.4 percent and the food away from home index rose 0.4 percent over the month.

The index for all items less food and energy rose 0.2 percent in April, following a 0.1-percent increase in March. Indexes that increased over the month include household furnishings and operations, medical care, motor vehicle insurance, education, and personal care. The indexes for airline fares, used cars and trucks, communication, and apparel were among the major indexes that decreased in April.

The all items index rose 2.3 percent for the 12 months ending April, after rising 2.4 percent over the 12 months ending March. The April change was the smallest 12-month increase in the all items index since February 2021. The all items less food and energy index rose 2.8 percent over the last 12 months. The energy index decreased 3.7 percent for the 12 months ending April. The food index increased 2.8 percent over the last year.
emphasis added
The change in CPI was below expectations. I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.

Monday, May 12, 2025

Tuesday: CPI, Q1 Household Debt and Credit

by Calculated Risk on 5/12/2025 07:13:00 PM

Mortgage Rates From Matthew Graham at Mortgage News Daily: Mortgage Rates Jump to 2 Week Highs After US/China Trade Talks

Tariffs and trade policy have been a new and important consideration for the bond market for just over a month now. That matters to mortgage rates because mortgage pricing is primarily determined by bond prices.
...
Over the weekend, the US and China agreed on a 90 day pause on the more extreme tariff brinksmanship. While levels remain elevated enough to cause some inflation concern (remember: bad for rates), they've come down enough to alleviate some concern about the global economy (also bad for rates). [30 year fixed 6.92%]
emphasis added
Tuesday:
• At 6:00 AM ET, NFIB Small Business Optimism Index for April.

• At 8:30 AM, The Consumer Price Index for April from the BLS. The consensus is for 0.3% increase in CPI (up 2.4% YoY), and a 0.3% increase in core CPI (up 2.8% YoY).

• At 11:00 AM, NY Fed: Q1 Quarterly Report on Household Debt and Credit

Fed April SLOOS Survey: Banks reported Weaker Demand for Residential Real Estate

by Calculated Risk on 5/12/2025 02:00:00 PM

From the Federal Reserve: The April 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices

The April 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the first quarter of 2025.

Regarding loans to businesses over the first quarter, survey respondents reported, on balance, tighter lending standards and weaker demand for commercial and industrial (C&I) loans to firms of all sizes. Furthermore, banks reported tighter or basically unchanged lending standards, and weaker or basically unchanged demand for commercial real estate (CRE) loans.

Banks also responded to a set of special questions about changes in lending policies and demand for CRE loans over the past year. For all CRE loan categories, banks reported having tightened policies related to loan-to-value ratios and debt service coverage ratios. For some CRE loan categories, banks also tightened policies related to market areas served and the length of interest-only payment periods. For office loans, banks reported having tightened all queried policies on such loans over the past year.

For loans to households, banks reported basically unchanged lending standards and weaker demand for most categories of residential real estate (RRE) loans, on balance. Banks similarly reported basically unchanged lending standards but stronger demand for home equity lines of credit (HELOCs). In addition, banks reported having tightened standards for credit card loans, while standards remained basically unchanged for auto and other consumer loans. Meanwhile, demand reportedly weakened for credit card and other consumer loans and remained basically unchanged for auto loans.
emphasis added
Senior Loan Officer Survey, Real Estate Loan Demand Click on graph for larger image.

This graph on Residential Real Estate demand is from the Senior Loan Officer Survey Charts.

This graph is for demand and shows that demand has been weak since late 2021.

The left graph is from 1990 to 2014.  The right graph is from 2015 to Q1 2025.

2nd Look at Local Housing Markets in April

by Calculated Risk on 5/12/2025 10:31:00 AM

Today, in the Calculated Risk Real Estate Newsletter: 2nd Look at Local Housing Markets in April

A brief excerpt:

It appears sales will be down year-over-year for the 3rd consecutive month, and sales-to-date in 2025 are trailing sales in 2024 - and 2024 was the lowest sales year since 1995! And sales in April might have a 3 handle (be under 4 million).
...
Months-of-SupplyHere is a look at months-of-supply using NSA sales. Since this is NSA data, it is likely months-of-supply will increase into the Summer.

Months in red are areas that are seeing 5 months of supply now and might see price pressures later this summer.
...
Many more local markets to come!
There is much more in the article.

Housing May 12th Weekly Update: Inventory up 1.6% Week-over-week, Up 32.9% Year-over-year

by Calculated Risk on 5/12/2025 08:11:00 AM

Altos reports that active single-family inventory was up 1.6% week-over-week.

Inventory is now up 21.1% from the seasonal bottom in January and is increasing.  

Usually, inventory is up about 11.5% from the seasonal low by this week in the year.   So, 2025 is seeing a larger than normal pickup in inventory.

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

Altos Year-over-year Home InventoryClick on graph for larger image.

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

Inventory was up 32.9% compared to the same week in 2024 (last week it was up 32.9%), and down 15.7% compared to the same week in 2019 (last week it was down 16.0%). 

This is the highest level since prior to the pandemic.

It now appears inventory will be close to 2019 levels towards the end of 2025.

Altos Home InventoryThis second inventory graph is courtesy of Altos Research.

As of May 9th, inventory was at 756 thousand (7-day average), compared to 744 thousand the prior week. 

Mike Simonsen discusses this data regularly on Youtube

Sunday, May 11, 2025

Sunday Night Futures

by Calculated Risk on 5/11/2025 06:21:00 PM

Weekend:
Schedule for Week of May 11, 2025

Monday:
• At 2:00 PM ET, Senior Loan Officer Opinion Survey on Bank Lending Practices for April.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 73 and DOW futures are up 449 (fair value).

Oil prices were up over the last week with WTI futures at $61.39 per barrel and Brent at $64.21 per barrel. A year ago, WTI was at $80, and Brent was at $83 - so WTI oil prices are down about 23% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.08 per gallon. A year ago, prices were at $3.59 per gallon, so gasoline prices are down $0.51 year-over-year.

Trends in Educational Attainment in the U.S. Labor Force

by Calculated Risk on 5/11/2025 08:16:00 AM

The first graph shows the unemployment rate by four levels of education (all groups are 25 years and older) through April 2025. Note: This is an update to a post from several years ago.

Unfortunately, this data only goes back to 1992 and includes only three recessions (the stock / tech bust in 2001, and the housing bust/financial crisis, and the 2020 pandemic). Clearly education matters with regards to the unemployment rate, with the lowest rate for college graduates at 2.5% in April, and highest for those without a high school degree at 6.2% in April.

All four groups were generally trending down prior to the pandemic, and all are close to pre-pandemic levels now.

Unemployment by Level of EducationClick on graph for larger image.

Note: This says nothing about the quality of jobs - as an example, a college graduate working at minimum wage would be considered "employed".

This brings up an interesting question: What is the composition of the labor force by educational attainment, and how has that been changing over time?

Here is some data on the U.S. labor force by educational attainment since 1992.

Labor Force by Education Currently, almost 67 million people (25 and over) in the U.S. labor force have a bachelor's degree or higher.  This is almost 45% of the labor force, up from 26.2% in 1992.

This is the only category trending up.  "Some college", "high school" and "less than high school" have been trending down.

Based on recent trends, probably half the labor force will have at least a bachelor's degree sometime next decade (2030s).

Some thoughts: Since workers with bachelor's degrees typically have a lower unemployment rate, rising educational attainment is probably a factor in pushing down the overall unemployment rate over time.

Also, I'd guess more education would mean less labor turnover, and that education is a factor in lower weekly claims.

A more educated labor force is a positive for the future.

Saturday, May 10, 2025

Real Estate Newsletter Articles this Week: Current State of the Housing Market

by Calculated Risk on 5/10/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

New vs existing InventoryClick on graph for larger image.

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

ICE Mortgage Monitor: Home Prices Continue to Cool

1st Look at Local Housing Markets in April

Asking Rents Mostly Unchanged Year-over-year

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

Schedule for Week of May 11, 2025

by Calculated Risk on 5/10/2025 08:11:00 AM

The key reports this week are April CPI, Retail Sales and Housing Starts.

For manufacturing, April Industrial Production, and the May NY and Philly Fed manufacturing surveys will be released.

----- Monday, May 12th -----

2:00 PM: Senior Loan Officer Opinion Survey on Bank Lending Practices for April.

----- Tuesday, May 13th -----

6:00 AM ET: NFIB Small Business Optimism Index for April.

8:30 AM: The Consumer Price Index for April from the BLS. The consensus is for 0.3% increase in CPI (up 2.4% YoY), and a 0.3% increase in core CPI (up 2.8% YoY).

11:00 AM: NY Fed: Q1 Quarterly Report on Household Debt and Credit

----- Wednesday, May 14th -----

7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

----- Thursday, May 15th -----

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims of 230 thousand, up from 228 thousand last week.

Retail Sales8:30 AM ET: Retail sales for April are scheduled to be released.  The consensus is for 0.1% increase in retail sales.

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

8:30 AM: The Producer Price Index for April from the BLS. The consensus is for a 0.3% increase in PPI, and a 0.3% increase in core PPI.

8:30 AM: The New York Fed Empire State manufacturing survey for May. The consensus is for a reading of -7.1, up from -8.1.

8:30 AM: the Philly Fed manufacturing survey for May. The consensus is for a reading of -8.5, up from -26.4.

8:40 AM: Speech, Fed Chair Jerome Powell, Framework Review, At the Thomas Laubach Research Conference, Washington, D.C.

Industrial Production9:15 AM: The Fed will release Industrial Production and Capacity Utilization for April.

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 77.8%.

10:00 AM: The May NAHB homebuilder survey. The consensus is for a reading of 40 up from 39 last month.  Any number below 50 indicates that more builders view sales conditions as poor than good.

----- Friday, May 16th -----

Multi Housing Starts and Single Family Housing Starts8:30 AM ET: Housing Starts for April.

This graph shows single and total housing starts since 2000.

The consensus is for 1.360 million SAAR, up from 1.324 million SAAR in March.

10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for May).