by Calculated Risk on 9/02/2025 12:27:00 PM

From the Census Bureau reported that overall construction spending decreased:

Construction spending during July 2025 was estimated at a seasonally adjusted annual rate of $2,139.1 billion, 0.1 percent below the revised June estimate of $2,140.5 billion. The July figure is 2.8 percent below the July 2024 estimate of $2,200.7 billion
emphasis added

Private spending decreased and public spending increased:

Spending on private construction was at a seasonally adjusted annual rate of $1,623.3 billion, 0.2 percent below the revised June estimate of $1,626.3 billion. ...

In July, the estimated seasonally adjusted annual rate of public construction spending was $515.8 billion, 0.3 percent above the revised June estimate of $514.3 billion.

Click on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Private residential (red) spending is 9.4% below the peak in 2022.

Private non-residential (blue) spending is 6.9% below the peak in December 2023.

Public construction spending (orange) is at a new peak.

The second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is down 5.3%. Private non-residential spending is down 3.7% year-over-year. Public spending is up 3.4% year-over-year.

This was below consensus expectations; however, spending for the previous two months was revised up slightly.

by Calculated Risk on 9/02/2025 10:00:00 AM

(Posted with permission). The ISM manufacturing index indicated contraction. The PMI® was at 48.7% in August, up from 48.0% in July. The employment index was at 43.8%, up from 43.4% the previous month, and the new orders index was at 51.4%, up from 47.1%.

From ISM: MManufacturing PMI® at 48.7% August 2025 ISM® Manufacturing PMI® Report

Economic activity in the manufacturing sector contracted in August for the sixth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation's supply executives in the latest ISM® Manufacturing PMI® Report.

The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.

“The Manufacturing PMI® registered 48.7 percent in August, a 0.7-percentage point increase compared to the 48 percent recorded in July. The overall economy continued in expansion for the 64th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index indicated growth in August following a six-month period of contraction; the figure of 51.4 percent is 4.3 percentage points higher than the 47.1 percent recorded in July. The August reading of the Production Index (47.8 percent) is 3.6 percentage points lower than July’s figure of 51.4 percent. The Prices Index remained in expansion (or ‘increasing’) territory, registering 63.7 percent, down 1.1 percentage points compared to the reading of 64.8 percent reported in July. The Backlog of Orders Index registered 44.7 percent, down 2.1 percentage points compared to the 46.8 percent recorded in July. The Employment Index registered 43.8 percent, up 0.4 percentage point from July’s figure of 43.4 percent.
emphasis added

This suggests manufacturing contracted in August.  This was at the consensus forecast, although employment was weak and prices very strong.

by Calculated Risk on 9/02/2025 08:08:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Declined in July; Up 1.4% Year-over-Year

A brief excerpt:

Freddie Mac reported that its “National” Home Price Index (FMHPI) decreased -0.22% month-over-month (MoM) on a seasonally adjusted (SA) basis in July. On a year-over-year (YoY) basis, the National FMHPI was up 1.4% in July, down from up 1.8% YoY in June. The YoY increase peaked at 19.0% in July 2021, and for this cycle, bottomed at up 0.9% YoY in April 2023. ...

As of July, 31 states and D.C. were below their previous peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peaks are in D.C. (-5.2), California (-3.3%), North Carolina (-2.9%), Maryland (-2.7%), and Florida (-2.5%).

For cities (Core-based Statistical Areas, CBSA), 254 of the 384 CBSAs are below their previous peaks.

Here are the 30 cities with the largest declines from the peak, seasonally adjusted. Punta Gorda has passed Austin as the worst performing city. Note that 4 of the 5 cities with the largest price declines are in Florida. And 11 of the 30 cities are in Florida.

More cities (9) in California are now on the list.

There is much more in the article!

by Calculated Risk on 9/01/2025 06:12:00 PM

Weekend:
• Schedule for Week of August 31, 2025

Tuesday:
• At 10:00 AM ET, ISM Manufacturing Index for August. The consensus is for the ISM to be at 48.6, up from 48.0 in July.

• At 10:00 AM, Construction Spending for July. The consensus is for a 0.1% increase in construction spending.

• All Day, Light vehicle sales for August.

The consensus is for light vehicle sales to be 16.1 million SAAR in July, down from 16.4 million in June (Seasonally Adjusted Annual Rate).

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

Oil prices were up over the last week with WTI futures at $64.61 per barrel and Brent at $68.15 per barrel. A year ago, WTI was at $77, and Brent was at $82 - 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 $3.15 per gallon. A year ago, prices were at $3.28 per gallon, so gasoline prices are down $0.13 year-over-year.

by Calculated Risk on 9/01/2025 05:04:00 PM

This is something to watch again. Here is another 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 August 29, 2025, LBR was at $548.50 per 1,000 board feet, up 11% from a year ago.

Click 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.

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.  

by Calculated Risk on 9/01/2025 08:11:00 AM

Altos reports that active single-family inventory was down 0.1% week-over-week.

Inventory is now up 37.8% from the seasonal bottom in January.   Usually, inventory is up about 21.5% from the seasonal low by this week in the year.   So, 2025 saw a larger than normal increase in inventory.

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

Click on graph for larger image.

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

Inventory was up 22.4% compared to the same week in 2024 (last week it was up 22.2%), and down 10.3% compared to the same week in 2019 (last week it was down 9.4%). 

Inventory started 2025 down 22% compared to 2019.  Inventory has closed more than half of that gap, and it appears inventory will be close to 2019 levels at the end of 2025.

This second inventory graph is courtesy of Altos Research.

As of August 29th, inventory was at 861 thousand (7-day average), compared to 861 thousand the prior week. 

Mike Simonsen discusses this data and much more regularly on YouTube

by Calculated Risk on 8/31/2025 09:21:00 AM

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For July, Realtor.com reported inventory was up 24.8% YoY, but still down 13.4% compared to the 2017 to 2019 same month levels. 

Here is their weekly report: Weekly Housing Trends: Latest Data as of Aug. 23

• Active inventory climbed 20.3% year over year

The number of homes active on the market climbed 20.3% year over year, easing slightly compared to the previous week for the 10th consecutive week. Nevertheless, last week was the 94th consecutive week of annual gains in inventory. There were roughly 1.1 million homes for sale last week, marking the 17th week in a row over the million-listing threshold. Active inventory is growing significantly faster than new listings, an indication that more homes are sitting on the market for longer.

• New listings—a measure of sellers putting homes up for sale—rose 2.7% year over year

New listings rose 2.7% last week compared with the same period last year, a lower rate compared to the previous week, as the number of new listings remains below the spring and early summer norm. Homeowners are showing less urgency to list, as rising inventory and cautious buyer activity continue to temper the market.

• The median listing price was flat year over year

The median list price has been flat compared to the same week in 2024 for three weeks in a row. Meanwhile, the median list price per square foot, which accounts for changes in home size, also remained flat year over year, pausing its nearly two-year growth streak. The flattened trends in both price measurements suggest that we are entering a period of pricing stability, as buyers are squeezed by high mortgage rates and sellers are slow to adjust expectations.

by Calculated Risk on 8/30/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Case-Shiller: National House Price Index Up 1.9% year-over-year in June

• New Home Sales at 652,000 Annual Rate in July

• Fannie and Freddie: Single Family Serious Delinquency Rates Unchanged in July

• Inflation Adjusted House Prices 2.5% Below 2022 Peak

• Final Look at Local Housing Markets in July and a Comment on July Sales from Tom Lawler

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

by Calculated Risk on 8/30/2025 08:11:00 AM

The key report this week is the August employment report on Friday.

Other key indicators include the August ISM manufacturing index, August auto sales, and Trade Deficit for July.

----- Monday, September 1st -----
All US markets will be closed in observance of the Labor Day holiday.

----- Tuesday, September 2nd -----
10:00 AM: ISM Manufacturing Index for August. The consensus is for the ISM to be at 48.6, up from 48.0 in July.

10:00 AM: Construction Spending for July. The consensus is for a 0.1% increase in construction spending.

All Day: Light vehicle sales for August.

The consensus is for light vehicle sales to be 16.1 million SAAR in July, down from 16.4 million in June (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the sales rate for last month.

----- Wednesday, September 3rd -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM Job Openings and Labor Turnover Survey for July from the BLS.

This graph shows job openings (yellow line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings decreased in June to 7.44 million from 7.71 million in May.

The number of job openings (black) were unchanged year-over-year and Quits were down 4% year-over-year.

2:00 PM: the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

----- Thursday, September 4th -----
8:15 AM: The ADP Employment Report for August. This report is for private payrolls only (no government). The consensus is for 72,000 payroll jobs added in August, down from 104,000 in July.

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims to increase to 232 thousand from 229 thousand last week.

8:30 AM: Trade Balance report for July from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through the most recent report. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is the trade deficit to be $64.2 billion.  The U.S. trade deficit was at $60.2 Billion the previous month.

10:00 AM: the ISM Services Index for August.

----- Friday, September 5th -----
8:30 AM: Employment Report for August. The consensus is for 78,000 jobs added, and for the unemployment rate to increase to 4.3%.

There were 73,000 jobs added in July, and the unemployment rate was at 4.2%.

This graph shows the jobs added per month since January 2021.

by Calculated Risk on 8/29/2025 02:20:00 PM

From Goldman:

We lowered our Q3 GDP tracking estimate by 0.2pp to +1.6% (quarter-over-quarter annualized), reflecting the wider-than-expected goods trade deficit. Our Q3 domestic final sales estimate stands at +0.6%. [August 29th estimate]
emphasis added

And from the Atlanta Fed:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2025 is 3.5 percent on August 29, up from 2.2 percent on August 26. After recent releases from the US Census Bureau and the US Bureau of Economic Analysis, the nowcasts of third-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth increased from 2.2 percent and 4.4 percent, respectively, to 2.3 percent and 6.1 percent, while the nowcast of the contribution of net exports to third-quarter real GDP growth increased from -0.36 percentage points to 0.59 percentage points. [August 29th estimate]