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Monday, June 09, 2025

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

by Calculated Risk on 6/09/2025 10:25:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-June 2025

A brief excerpt:

This 2-part overview for mid-June provides a snapshot of the current housing market.

First, a quote from Toll Brothers CEO Douglas Yearley Jr.:
“The spring selling season, which is really a winter selling season, is when most new homes are sold in this country. It's mid January until the end of April, and the reason for that is most people want to move into their new home for the next school year. So you [homebuilders] better get [the buyer] under contract and get it going in February, March, April, to have it completed by the school year. That's what provides for our business. And this was not a good spring.
emphasis added
It was not a “good Spring” for new homebuilders, but it wasn’t horrible. However, homebuilders have a growing number of completed homes for sales, a larger than normal number of unsold homes under construction and are competing with more existing home inventory.

And the key stories for existing homes are that inventory is increasing sharply, and sales are essentially flat compared to last year (and sales in 2024 were the lowest since 1995). That means prices will be under pressure ...

New vs existing InventoryRealtor.com reports in the May 2025 Monthly Housing Market Trends Report that new listings were up 7.2% year-over-year in May. And active listings were up 31.5% year-over-year.
Homebuyers found more options in May, as the number of actively listed homes rose 31.5% compared to the same time last year. This builds on April’s 30.6% increase and marks the 19th consecutive month of year-over-year inventory gains. The number of homes for sale topped 1 million for the first time since Winter 2019 and exceeded 2020 levels for the second month in a row, a key pandemic recovery benchmark. Still, inventory remains 14.4% below typical 2017–2019 levels, though May’s gains indicate the market is closing the gap at an accelerating pace.
There is much more in the article.

Housing June 9th Weekly Update: Inventory up 0.6% Week-over-week, Up 32.2% Year-over-year

by Calculated Risk on 6/09/2025 08:11:00 AM

Altos reports that active single-family inventory was up 0.6% week-over-week.

Inventory is now up 29.5% from the seasonal bottom in January and is increasing.  

Usually, inventory is up about 17% 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 32.2% compared to the same week in 2024 (last week it was up 32.8%), and down 13.0% compared to the same week in 2019 (last week it was down 14.6%). 

This is the highest level since 2019.

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 June 6th, inventory was at 809 thousand (7-day average), compared to 804 thousand the prior week. 

Mike Simonsen discusses this data regularly on Youtube

Sunday, June 08, 2025

Sunday Night Futures

by Calculated Risk on 6/08/2025 06:36:00 PM

Weekend:
Schedule for Week of June 8, 2025

Monday:
• No major economic releases scheduled.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 7 and DOW futures are down 35 (fair value).

Oil prices were up over the last week with WTI futures at $64.58 per barrel and Brent at $66.47 per barrel. A year ago, WTI was at $77, and Brent was at $78 - so WTI oil prices are down about 16% 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 $3.40 per gallon, so gasoline prices are down $0.32 year-over-year.

Leading Index for Commercial Real Estate Increased 4% in May

by Calculated Risk on 6/08/2025 08:07:00 AM

From Dodge Data Analytics: Dodge Momentum Index Increases 4% in May

The Dodge Momentum Index (DMI), issued by Dodge Construction Network, grew 3.7% in May to 211.2 (2000=100) from the downwardly revised April reading of 203.5. Over the month, commercial planning grew 0.8% while institutional planning improved 10.5%.

“Nonresidential planning continued to accelerate in May, primarily driven by strong project activity on the institutional side of the DMI,” stated Sarah Martin, associate director of forecasting at Dodge Construction Network. “Planning momentum moderately improved on the commercial side as well, following subdued growth in that sector over the last few months – outside of data centers. Increased economic and policy uncertainty will continue to contribute to heightened volatility in the project data - but in aggregate, planning activity is on steady footing.”

After a very strong April, data center projects returned to more typical levels in May and constrained overall commercial planning. Without data center projects, the commercial portion of the DMI would have improved 5% and the entire DMI would have grown 7% over the month. Accelerated warehouse and hotel planning drove the commercial portion of the Index, while office and retail planning remained flat. On the institutional side, a strong uptick in education and recreational projects drove this month’s gains, partially offset by a mild slowdown in healthcare planning.

In May, the DMI was up 24% when compared to year-ago levels. The commercial segment was up 15% from May 2024, and the institutional segment was up 47% after a weak May last year. If all data center projects between 2023 and 2025 are excluded, commercial planning would be up 4% from year-ago levels and the entire DMI would be up 17%.
...
The DMI is a monthly measure of the value of nonresidential building projects going into planning, shown to lead construction spending for nonresidential buildings by a full year.
emphasis added
Dodge Momentum Index Click on graph for larger image.

This graph shows the Dodge Momentum Index since 2002. The index was at 211.2 in May, up from 203.5 the previous month.

According to Dodge, this index leads "construction spending for nonresidential buildings by a full year".  This index suggests a pickup in mid-2025, however, uncertainty might impact these projects.  

Commercial construction is typically a lagging economic indicator.

Saturday, June 07, 2025

Real Estate Newsletter Articles this Week: Fannie Multi-Family Delinquency Rate Highest Since Jan 2011 (ex-Pandemic)

by Calculated Risk on 6/07/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Fannie Freddie Serious Deliquency RateClick on graph for larger image.

Fannie and Freddie: Single Family Serious Delinquency Rates Decreased in April

Q1 Update: Delinquencies, Foreclosures and REO

1st Look at Local Housing Markets in May

June ICE Mortgage Monitor: Home Prices Continue to Cool

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 June 8, 2025

by Calculated Risk on 6/07/2025 08:11:00 AM

The key report this week is May CPI.

----- Monday, June 9th -----

No major economic releases scheduled.

----- Tuesday, June 10th -----

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

----- Wednesday, June 11th -----

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

8:30 AM: The Consumer Price Index for May from the BLS. The consensus is for 0.2% increase in CPI (up 2.5% YoY), and a 0.3% increase in core CPI (up 2.9% YoY).

----- Thursday, June 12th -----

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims of 239 thousand, up from 247 thousand last week.

8:30 AM: The Producer Price Index for May from the BLS. The consensus is for a 0.2% increase in PPI, and a 0.3% increase in core PPI.

12:00 PM: Q1 Flow of Funds Accounts of the United States from the Federal Reserve.

----- Friday, June 13th -----

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

Friday, June 06, 2025

June 6th COVID Update: Weekly COVID Deaths at New Pandemic Low

by Calculated Risk on 6/06/2025 07:39:00 PM

Mortgage RatesNote: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly.

Note: "Effective May 1, 2024, hospitals are no longer required to report COVID-19 hospital admissions, hospital capacity, or hospital occupancy data."  So, I'm no longer tracking hospitalizations.

COVID Metrics
 NowWeek
Ago
Goal
Deaths per Week250✅277≤3501
1my goals to stop weekly posts.
🚩 Increasing number weekly for Deaths.
✅ Goal met.

COVID-19 Deaths per WeekClick on graph for larger image.

This graph shows the weekly (columns) number of deaths reported since Jan 2020.

Although weekly deaths met the original goal to stop posting in June 2024 (previous pandemic low of 314 deaths), I continued to post since deaths moved above the goal again - and I'll continue to post until weekly deaths are below the goal for a few more weeks.

And here is a graph I'm following concerning COVID in wastewater as of June 6th:

COVID-19 WastewaterThis appears to be a leading indicator for COVID hospitalizations and deaths.  This is close to the lows of May 2024.

Nationally COVID in wastewater is "Low".

AAR: Rail "Intermodal Slips, But Carloads Hold Steady Amid Continued Uncertainty"

by Calculated Risk on 6/06/2025 05:00:00 PM

From the Association of American Railroads (AAR) AAR Data Center. Graph and excerpts reprinted with permission.

Rail freight volumes in May 2025 tell a story of an industry navigating crosscurrents. On one side, carload traffic showed solid growth, reflecting resilience in key sectors of the domestic economy. On the other, intermodal container volumes barely eked out a gain, hinting at softening global trade and cautious consumer demand. Mixed economic signals – from cooling manufacturing output to consumers pulling back on goods purchases – underscore the uncertainty facing railroads. Recent data on factory activity, consumer spending, and housing all paint a cautionary picture for the coming months, even as the labor market remains a relative bright spot.

Total U.S. rail carloads rose 5.9% in May 2025 compared with a year ago (about 50,000 extra carloads), a slight step down from April’s 6.2% growth. Year-to-date carloads through May were up 2.5% versus the same period in 2024.
emphasis added
IntermodalAnd on intermodal:
By contrast, intermodal volume (containers and trailers) barely grew, rising only 0.6% in May year over-year (around +6,200 units). This marks the 21st consecutive month of year-over-year intermodal gains, but notably it’s the weakest percentage increase of that entire streak. In fact, average weekly intermodal loadings in May (about 259,400 units) were the lowest in a year and essentially equal to the 10-year May average.

Tracking with declines in port activity and lower import volumes, rail traffic saw its first non-holiday intermodal declines since September 2023 to end the month with volumes falling ~1.5%–1.8% compared to the same weeks a year ago. Time will tell if this two-week trend continues or if shippers and retailers are becoming more cautious,

1st Look at Local Housing Markets in May

by Calculated Risk on 6/06/2025 01:46:00 PM

Today, in the Calculated Risk Real Estate Newsletter: 1st Look at Local Housing Markets in May

A brief excerpt:

Tracking local data gives an early look at what happened the previous month and also reveals regional differences in both sales and inventory.

Closed sales in May were mostly for contracts signed in March and April, and mortgage rates, according to the Freddie Mac PMMS, averaged 6.65% in March and 6.73% in April. This was a decrease from the average rate for homes that closed in April.

NOTE: The tables for active listings, new listings and closed sales all include a comparison to May 2019 for each local market (some 2019 data is not available).
...
Closed Existing Home SalesIn May, sales in these early reporting markets were down 5.5% YoY. Last month, in April, these same markets were down 0.3% year-over-year Not Seasonally Adjusted (NSA).

Important: There were fewer working days in May 2025 (21) as in May 2024 (22). So, the year-over-year change in the headline SA data will be higher than for the NSA data.

Note that most of these early reporting markets have shown stronger year-over-year sales than most other markets for the last several months.
...
This was just several early reporting markets. Many more local markets to come!
There is much more in the article.

Q2 GDP Tracking: Moving Up

by Calculated Risk on 6/06/2025 01:11:00 PM

From BofA:

Since our last weekly publication, our 2Q GDP tracking is up to 2.7% q/q saar from 1.8% q/q saar and 1Q GDP is up two-tenths to 0.0% q/q saar. [June 6th estimate]
emphasis added
From Goldman:
The details of the trade balance report indicated that April exports were stronger than our previous GDP tracking assumptions. We boosted our Q2 GDP tracking estimate by 0.4pp to +3.7% (quarter-over-quarter annualized) and left our Q2 domestic final sales estimate unchanged at -0.5%. [June 5th estimate]
And from the Atlanta Fed: GDPNow
GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 3.8 percent on June 5, down from 4.6 percent on June 2. After recent releases from the US Census Bureau, the US Bureau of Economic Analysis, and the Institute for Supply Management, the nowcasts of second-quarter real personal consumption expenditures growth and real gross private domestic investment growth decreased from 4.0 percent and 0.5 percent, respectively, to 2.6 percent and -2.2 percent, while the nowcast of the contribution of net exports to annualized second-quarter real GDP growth increased from 1.36 percentage points to 2.01 percentage points. [June 5th estimate]