by Calculated Risk on 5/13/2025 07:56:00 PM
Tuesday, May 13, 2025
Wednesday: Mortgage Applications
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.
Cleveland Fed: Median CPI increased 0.3% and Trimmed-mean CPI increased 0.2% in April
by Calculated Risk on 5/13/2025 12:39:00 PM
According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% in April. 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".
This graph shows the year-over-year change for these four key measures of inflation.
NY Fed Q1 Report: Change in Household Debt Balances Mixed; Student Loan Delinquencies Rise Sharply
by Calculated Risk on 5/13/2025 11:14:00 AM
From the NY Fed: Change in Household Debt Balances Mixed; Student Loan Delinquencies Rise Sharply
The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit. The report shows total household debt increased by $167 billion (0.9%) in Q1 2025, to $18.20 trillion. The report is based on data from the New York Fed’s nationally representative Consumer Credit Panel. It includes a one-page summary of key takeaways and their supporting data points.
The New York Fed also issued an accompanying Liberty Street Economics blog post examining student loan delinquency, including which borrowers were past due in the first quarter and implications for their access to other credit.
“Transition rates into serious delinquency have leveled off for credit card and auto loans over the past year,” said Daniel Mangrum, Research Economist at the New York Fed. “However, the first batch of past due student loans were reported in the first quarter of 2025, resulting in a large jump in seriously delinquent borrowers.”
Credit card balances fell by $29 billion from the previous quarter and stood at $1.18 trillion at the end of March 2025. Auto loan balances also declined by $13 billion, representing the second drop from one subsequent quarter since 2011, and totaled $1.64 trillion. Mortgage balances grew by $199 billion and stood at $12.80 trillion. HELOC balances rose by $6 billion to $402 billion, representing the twelfth consecutive quarterly increase. Student loan balances grew by $16 billion and now stand at $1.63 trillion. Other balances, which include retail cards and other consumer loans, fell by $12 billion.
The pace of mortgage originations increased slightly, with $426 billion newly originated mortgages in Q1 2025. Aggregate limits on credit card accounts increased moderately by $77 billion, representing a 1.5% increase from the previous quarter.
Aggregate delinquency rates increased from the previous quarter, with 4.3% of outstanding debt in some stage of delinquency. Transition into early delinquency held steady for nearly all debt types, with the exception of student loans. Student loans saw a large uptick in the rate at which balances went from current to delinquent due to the resumption of reporting of delinquent student loans on credit reports after a nearly five-year pause due to the pandemic. Transition into serious delinquency remained stable for auto loans, credit cards, and other debt.
emphasis added
Here are three graphs from the report:
The first graph shows household debt increased in Q1. Household debt previously peaked in 2008 and bottomed in Q3 2013. Unlike following the great recession, there wasn't a decline in debt during the pandemic.
From the NY Fed:
Aggregate nominal household debt balances increased by $167 billion in the first quarter of 2025, a 0.9% rise from 2024Q4. Balances now stand at $18.20 trillion and have increased by $4.06 trillion since the end of 2019, just before the pandemic recession.
The overall delinquency rate increased in Q1. From the NY Fed:
Aggregate delinquency rates increased in the first quarter of 2025. As of the end of March, 4.3 percent of outstanding debt was in some stage of delinquency, up from 3.6 percent in the fourth quarter. Transition into early delinquency held steady for nearly all debt types; the exception was for student loans, which saw a large uptick in the rate at which balances went from current to delinquent due to the resumption of reporting of delinquent student loans on credit reports after a nearly 5-year pause due to the pandemic. Transition rates into serious delinquency, defined as 90 or more days past due, remained stable for auto loans and credit cards, and saw increases for mortgages, HELOCs, and student loans.
From the NY Fed:
The volume of mortgage originations, measured as appearances of new mortgages on consumer credit reports and including both refinance and purchase originations, increased slightly with $426 billion newly originated in 2025Q1. ... Home equity lines of credit (HELOC) limits continued to rise and saw a $3 billion increase.There is much more in the report.
MBA: Mortgage Delinquencies Increased Slightly in Q1 2025
by Calculated Risk on 5/13/2025 10:48:00 AM
Today, in the Calculated Risk Real Estate Newsletter: MBA: Mortgage Delinquencies Increased Slightly in Q1 2025
A brief excerpt:
From the MBA: Mortgage Delinquencies Increase Slightly in the First Quarter of 2025There is much more in the article.The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 4.04 percent of all loans outstanding at the end of the first quarter of 2025, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.The following graph shows the percent of loans delinquent by days past due. Overall delinquencies increased in Q2. The sharp increase in 2020 in the 90-day bucket was due to loans in forbearance (included as delinquent, but not reported to the credit bureaus).
The percent of loans in the foreclosure process increased year-over-year from 0.46 percent in Q1 2024 to 0.49 percent in Q1 2025 (red) but remains historically low.
...
The primary concern is the increase in FHA and VA delinquency rates. Some of the recent increase is probably due to the hurricanes last year and wildfires in California.
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.
Click on graph for larger image.
This graph shows the YoY price change for Services and Services less rent of shelter through April 2025.
Services less rent of shelter was up 3.3% YoY in April, unchanged from 3.3% YoY in March.
Commodities less food and energy commodities were at 0.2% YoY in April, up from 0.0% YoY in 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.
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
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 change in CPI was below expectations. I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.
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
Monday, May 12, 2025
Tuesday: CPI, Q1 Household Debt and Credit
by Calculated Risk on 5/12/2025 07:13:00 PM
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.Tuesday:
...
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
• 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
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.
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).There is much more in the article.
...
Here 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!
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