by Calculated Risk on 6/09/2025 04:12:00 PM
Monday, June 09, 2025
Intercontinental Exchange: House Prices growth slows to 1.4% YoY in May
The ICE Home Price Index (HPI) is a repeat sales index. ICE reports the median price change of the repeat sales.
From ICE (Intercontinental Exchange):
• Recent data shows home price growth continued to cool, dropping to an annual growth rate of +1.4%, down from an already low +1.6% mid-month.Almost a third (30%) of all major home sales markets have seen prices fall by at least a full percentage point, with 20% falling by 2% and seven markets (Austin, Cape Coral, North Port, San Francisco, Phoenix, San Antonio, and Boise City) falling by more than 5%.
• On a seasonally adjusted basis, prices fell by -0.01% in the month – the first decline in this metric since 2022.
• In fact, if you back out outliers, such as the Fed rate hikes in 2022 and the COVID shutdown in 2020, this is the first time we’ve seen home prices decline, on an adjusted basis, in any month since 2012.
• Condos were the first to turn, with condo prices now down nearly a full percentage point from the same time last year. Single family residences, on the other hand, are still up a modest +1.7%.
The largest drops from the peak in 2022 have been in Austin (-19.2%), Cape Coral (-12.1%), North Port, Fla. (-10.2%) and San Francisco (-8.3%)
Why is this happening?
Mortgage rates have ticked higher in the wake of recent tariff and government spending announcements, which increased inflationary concerns and decreased the number of Fed rate cuts expected by the market in 2025. Higher rates and moderated demand are allowing inventory levels to build, especially in the western U.S. with 40% of markets now seeing more homes for sale than they averaged from 2017-2019 and another 10% on pace for inventory to ‘normalize’ by the end of the year. Denver now has twice as many homes for sale as it did in the years leading up to the pandemic, with California’s 10 largest markets seeing 40-75% more homes available for sale than at the same time last year.
Andy Walden, head of mortgage and housing market research for ICE, says:“We continue to see an inflection in the housing market as home-price softening expands beyond the Sunbelt into the West. With inventory levels beginning to normalize across much of the country, prospective homebuyers are finally beginning to see some long-anticipated price relief.”As ICE mentioned, cities in the South have been leading the way in inventory increases and price declines (especially Florida and Texas). Now the West Coast markets are following.
Recession Watch Metrics
by Calculated Risk on 6/09/2025 01:49:00 PM
Early in February, I expressed my "increasing concern" about the negative economic impact of "executive / fiscal policy errors", however, I concluded that post by noting that I was not currently on recession watch.
"We should be looking to trade with the rest of the world, and we should do what we do best, and they should do what they do best ... Trade should not be a weapon.”In the short term, it is mostly trade policy that will negatively impact the economy. However, there other aspects of policy that bear watching.
The Sahm Rule was at 0.27 in May.
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.There is much more in the article.
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.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.
emphasis added”
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 ...
Realtor.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.
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
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
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.
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:
Click 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.
No major economic releases scheduled.
6:00 AM ET: NFIB Small Business Optimism Index for April.
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).
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.
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
Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.
COVID Metrics | ||||
---|---|---|---|---|
Now | Week Ago | Goal | ||
Deaths per Week | 250✅ | 277 | ≤3501 | |
1my goals to stop weekly posts. 🚩 Increasing number weekly for Deaths. ✅ Goal met. |
This graph shows the weekly (columns) number of deaths reported since Jan 2020.
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
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,