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Tuesday, July 08, 2025

1st Look at Local Housing Markets in June

by Calculated Risk on 7/08/2025 11:05:00 AM

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

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 June were mostly for contracts signed in April and May, and mortgage rates, according to the Freddie Mac PMMS, averaged 6.73% in April and 6.82% in May (slightly higher than for closed sales in May).
...
Closed Existing Home SalesIn June, sales in these early reporting markets were up 0.9% YoY. Last month, in May, these same markets were down 5.7% year-over-year Not Seasonally Adjusted (NSA).

Important: There were more working days in June 2025 (20) as in June 2024 (19). So, the year-over-year change in the headline SA data will be lower than for the NSA data.
...
This was just several early reporting markets. Many more local markets to come!
There is much more in the article.

Wholesale Used Car Prices Increased in June; Up 6% Year-over-year

by Calculated Risk on 7/08/2025 09:22:00 AM

From Manheim Consulting today: Wholesale Used-Vehicle Prices Increase in June

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) were higher in June compared to May. The Manheim Used Vehicle Value Index (MUVVI) increased to 208.5, representing a 6.3% year-over-year increase and a 1.6% rise above May levels. The seasonal adjustment forced the index higher in the month, as non-seasonally adjusted values fell more than usual following the volatility induced by the tariff announcement. The non-adjusted price in June decreased 1.1% compared to May, which now makes the unadjusted average price higher by 5.1% year over year.
emphasis added
Manheim Used Vehicle Value Index Click on graph for larger image.

This index from Manheim Consulting is based on all completed sales transactions at Manheim’s U.S. auctions.

The Manheim index suggests used car prices increased in June (seasonally adjusted) and were up 6.3% YoY.

Small Business Optimism Index decreased slightly in June

by Calculated Risk on 7/08/2025 08:31:00 AM

Note: Usually small business owners complain about taxes and regulations (currently 1st and 6th on the "Single Most Important Problem" list).  During a recession, "poor sales" is usually the top problem and recently "inflation" was number 1.

From the National Federation of Independent Business (NFIB): June 2025 Report: Small Business Optimism Index

The NFIB Small Business Optimism Index remained steady in June, edging down 0.2 of a point to 98.6, slightly above the 51-year average of 98. A substantial increase in respondents reporting excess inventories contributed the most to the decline in the index. The Uncertainty Index decreased by five points from May to 89. Nineteen percent of small business owners reported taxes as their single most important problem, up one point from May and ranking as the top problem again. The last time taxes reached 19 percent was in July 2021.
emphasis added
Small Business Optimism Index Click on graph for larger image.

This graph shows the small business optimism index since 1986.

Right now for most important problem, after taxes (19%), "Quality of Labor" (16%) is #2, inflation (11%) is #3, and "Poor Sales" (10%) and "Cost of Labor" are tied for #4.

Monday, July 07, 2025

Tuesday: Small Business Index

by Calculated Risk on 7/07/2025 07:48:00 PM

Mortgage Rates From Matthew Graham at Mortgage News Daily: Mortgage Rates Continue Higher For Third Straight Day

For the entire 2nd half of June, it was easy to be spoiled by the absence of volatility in mortgage rates. During that time, rates were either lower or unchanged every single day. The past few business days have been a different story. [30 year fixed 6.79%]
emphasis added
Tuesday:
• At 6:00 AM ET, NFIB Small Business Optimism Index for June.

Update: Lumber Prices Up 26% YoY

by Calculated Risk on 7/07/2025 02:38:00 PM

This is something to watch again. Here is another monthly update on lumber prices.


SPECIAL NOTE: The CME group discontinued the Random Length Lumber Futures contract on May 16, 2023.  I switched to a physically-delivered Lumber Futures contract that was started in August 2022.  Unfortunately, this impacts long term price comparisons since the new contract was priced about 24% higher than the old random length contract for the period when both contracts were available.

This graph shows CME random length framing futures through August 2022 (blue), and the new physically-delivered Lumber Futures (LBR) contract starting in August 2022 (Red).

On July 7, 2025, LBR was at $611.50 per 1,000 board feet, up 26% from a year ago.

Lumber PricesClick on graph for larger image.

There is somewhat of a seasonal demand for lumber, and lumber prices frequently peak in the first half of the year.

Note that last year prices bottomed in early July at $449.00 per 1,000 board feet, so the year-over-year comparison will be easier in the months ahead.

The pickup in early 2018 was due to the Trump lumber tariffs in 2017.  There were huge increases during the pandemic due to a combination of supply constraints and a pickup in housing starts.  

July ICE Mortgage Monitor: Home Prices Continue to Cool, Early Signs of Homeowner Risk Emerge

by Calculated Risk on 7/07/2025 10:57:00 AM

Today, in the Real Estate Newsletter: July ICE Mortgage Monitor: Home Prices Continue to Cool, Early Signs of Homeowner Risk Emerge

Brief excerpt:

House Price Growth Continues to Slow

Here is the year-over-year in house prices according to the ICE Home Price Index (HPI). The ICE HPI is a repeat sales index. ICE reports the median price change of the repeat sales. The index was up 1.6% year-over-year in May, down from 2.0% YoY in April. The early look at the June HPI shows a 1.3% YoY increase.

ICE Home Price Index
• Mortgage rates in the high 6% range and growing inventory across the country continue to cool home price growth

Annual price growth eased to 1.6% in May with ICE’s enhanced Home Price Index showing growth slowing further to 1.3% in early June marking the slowest growth rate since mid-2023

• Early June data also shows home prices rose by a modest 0.02% on a seasonally adjusted basis, which is equivalent to a seasonally adjusted annualized rate (SAAR) of +0.3%, suggesting more slowing on the horizon

• Single family prices were up +1.6% from the same time last year, while condo prices were down -1.3%, marking the softest condo market since 2012

• More than half of the top 100 housing markets in the U.S. are seeing condo prices below last year’s levels, with the largest declines in Florida, led by Cape Coral (-12.7%) and North Port (-10.4%)
There is much more in the newsletter.

Housing July 7th Weekly Update: Inventory up 2.7% Week-over-week, Only Down 10% from 2019 Levels

by Calculated Risk on 7/07/2025 08:11:00 AM

Altos reports that active single-family inventory was up 2.7% week-over-week.

Inventory is now up 36.6% from the seasonal bottom in January and is still increasing.   Usually, inventory is up about 20% 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 30.8% compared to the same week in 2024 (last week it was up 28.7%), and down 10.0% compared to the same week in 2019 (last week it was down 14.1%). 

This is the highest level since November 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 July 4th, inventory was at 853 thousand (7-day average), compared to 831 thousand the prior week. 

Mike Simonsen discusses this data regularly on Youtube

Sunday, July 06, 2025

Sunday Night Futures

by Calculated Risk on 7/06/2025 06:17:00 PM

Weekend:
Schedule for Week of July 6, 2025

Monday:
• No major economic releases scheduled.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 22 and DOW futures are down 112 (fair value).

Oil prices were up over the last week with WTI futures at $66.50 per barrel and Brent at $68.30 per barrel. A year ago, WTI was at $84, and Brent was at $89 - so WTI oil prices are down about 21% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.09 per gallon. A year ago, prices were at $3.46 per gallon, so gasoline prices are down $0.37 year-over-year.

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

by Calculated Risk on 7/06/2025 09:52:00 AM

The first graph shows the unemployment rate by four levels of education (all groups are 25 years and older) through June 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 June, and highest for those without a high school degree at 5.8% in June.

All four groups are slightly above 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 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).

Since workers with bachelor's degrees typically have a lower unemployment rate, rising educational attainment has pushed down, by my rough calculation, the unemployment rate by 0.3% to 0.4% over the last 30 years.

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

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

Saturday, July 05, 2025

Real Estate Newsletter Articles this Week: FHFA Releases National Mortgage Database

by Calculated Risk on 7/05/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

FHFA Percent Mortgage Rate First LienClick on graph for larger image.

FHFA’s National Mortgage Database: Outstanding Mortgage Rates, LTV and Credit Scores

Freddie Mac House Price Index Declined in May; Up 2.2% Year-over-year

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

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.