by Calculated Risk on 12/04/2025 04:01:00 PM

Hotel occupancy was weak over the summer months, due to less international tourism.  The fall months are mostly domestic travel and occupancy is still under pressure! 

From STR: U.S. hotel results for week ending 29 November

The U.S. hotel industry reported mixed year-over-year comparisons, according to CoStar’s latest data through 29 November. ...

23-29 November 2025 (percentage change from comparable week in 2024):

• Occupancy: 49.8% (-1.0%)
• Average daily rate (ADR): US$141.31 (+0.2%)
• Revenue per available room (RevPAR): US$70.42 (-0.7%)
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.

Click on graph for larger image.

The red line is for 2025, blue is the median, and dashed light blue is for 2024.  Dashed black is for 2018, the record year for hotel occupancy. 

The 4-week average of the occupancy rate is tracking behind both last year and the median rate for the period 2000 through 2024 (Blue).

Note: Y-axis doesn't start at zero to better show the seasonal change.

The 4-week average will decrease seasonally until early next year.

On a year-to-date basis, the only worse years for occupancy over the last 25 years were pandemic or recession years.

by Calculated Risk on 12/04/2025 01:42:00 PM

From Cotality (formerly CoreLogic): US home price insights — December 2025

• Year-over-year price growth continues its downward trend, only rising 1.1% in October 2025.

• Price declines expanded from six of the 100 largest metros in January to 32 by October, marking the broadest softening of prices since the early 2010s.
...
This year began with a stable growth trajectory, with national price growth posting an annual increase of 3.4% in January. However, that momentum slowed steadily as the year progressed. By October, annual appreciation was a mere 1.1% annual increase—the lowest rate since early 2012.

"The housing market in 2025 demonstrated remarkable resilience despite significant headwinds. Slowing price growth reflects a much-needed rebalancing after years of unsustainable gains. While some markets are experiencing declines, these adjustments will help restore affordability over time and make housing more accessible to a wider group of buyers,” said Cotality’s Chief Economist Dr. Selma Hepp.

This deceleration highlights the impact of higher mortgage rates earlier in the year and persistent affordability challenges. Furthermore, price growth was dampened by a notable increase in inventory. Many markets saw a surge in both existing and newly built homes, slowing rates of in-migration and weakened demand.

The robust price increases of 2022 when top metros — primarily in Florida and the Southeast — saw gains exceeding 30% has now given way to declines. At the start of 2025, only six metros — primarily in Florida — posted year-over-year drops. By October, that number surged to 32, as pricing downturns extended into Texas, California, and various states throughout the Mountain West.
emphasis added

This graph from Cotality shows the Top 10 coolest markets.

The list is dominated by Florida and Texas. According to Cotality, the highest risk markets are all in Florida.

House prices are under pressure with more inventory and sluggish sales.

by Calculated Risk on 12/04/2025 10:46:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Q3 Update: Delinquencies, Foreclosures and REO

A brief excerpt:

Even with the recent weakness in house prices, it is important to note that there will NOT be a surge in foreclosures that could lead to cascading house price declines (as happened following the housing bubble) for two key reasons: 1) mortgage lending has been solid, and 2) most homeowners have substantial equity in their homes.

With substantial equity, and low mortgage rates (mostly at a fixed rates), few homeowners will have financial difficulties.

But it is still important to track delinquencies and foreclosures.
...
This graph shows the nominal dollar value of Residential REO for FDIC insured institutions based on the Q3 FDIC Quarterly Banking Profile released in late November. Note: The FDIC reports the dollar value and not the total number of REOs.

The dollar value of 1-4 family residential Real Estate Owned (REOs, foreclosure houses) was up 24% YOY from $765 million in Q3 2024 to $951 million in Q3 2025. This is still historically very low, but increasing.

There is much more in the article.

by Calculated Risk on 12/04/2025 08:30:00 AM

The DOL reported:

In the week ending November 29, the advance figure for seasonally adjusted initial claims was 191,000, a decrease of 27,000 from the previous week's revised level. This is the lowest level for initial claims since September 24, 2022 when it was 189,000. The previous week's level was revised up by 2,000 from 216,000 to 218,000. The 4-week moving average was 214,750, a decrease of 9,500 from the previous week's revised average. The previous week's average was revised up by 500 from 223,750 to 224,250.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 214,750.

by Calculated Risk on 12/03/2025 08:16:00 PM

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

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for 218,000, up from 216,000 last week.

by Calculated Risk on 12/03/2025 01:48:00 PM

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the November 2025 seasonally adjusted annual sales rate (SAAR) of 367 thousand.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Click on graph for larger image.

Heavy truck sales were at 367 thousand SAAR in November, up from 339 thousand in October, and down 25.2% from 491 thousand SAAR in November 2024.

Year-to-date (NSA) sales are down 13.2% in 2025 compared to 2024 through November.

Usually, heavy truck sales decline sharply prior to a recession, and sales have collapsed recently.  

by Calculated Risk on 12/03/2025 01:33:00 PM

The BEA reported that light vehicle sales were at 15.6 million in November on a seasonally adjusted annual basis (SAAR). This was up 2.0% from the sales rate in October, and down 5.6% from November 2024.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) through October (red from Omdia).

Vehicle sales were over 17 million SAAR in March and April as consumers rushed to "beat the tariffs".

Then sales were depressed in May and June. 

Sales were boosted in August and September due to the termination of the EV credit at the end of September.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Sales in November were slightly above the consensus forecast of 15.4 million SAAR.

by Calculated Risk on 12/03/2025 11:12:00 AM

Today, in the Real Estate Newsletter: Asking Rents Soft Year-over-year

Brief excerpt:

Another monthly update on rents.

Tracking rents is important for understanding the dynamics of the housing market. Slower household formation and increased supply (more multi-family completions) has kept asking rents under pressure.

More recently, immigration policy has become a negative for rentals.

Apartment List: Asking Rent Growth -1.1% Year-over-year ...

The national median rent fell 1.0% in November, and now stands at $1,367. This was the fourth consecutive month-over-month decline, as we’re now in the midst of the rental market’s off-season. It’s likely that we will close out the year with an additional modest rent decline in December.

Realtor.com: 27th Consecutive Month with Year-over-year Decline in Rents

October 2025 marks the 27th straight month of year-over-year rent decline for 0-2 bedroom properties since trend data began in 2020. Asking rents dipped by $29, or -1.7%, year over year.

There is much more in the article.

by Calculated Risk on 12/03/2025 10:00:00 AM

(Posted with permission). The ISM® Services index was at 52.6%, up from 52.4% the previous month. The employment index increased to 48.9%, up from 48.2%. Note: Above 50 indicates expansion, below 50 in contraction.

From the Institute for Supply Management: Services PMI® at 52.6% November 2025 ISM® Services PMI® Report

Economic activity in the services sector continued to expand in November, say the nation’s purchasing and supply executives in the latest ISM® Services PMI® Report. The Services PMI® registered at 52.6 percent and is in expansion territory for the ninth time in 2025.

The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “In November, the Services PMI® registered a reading of 52.6 percent, 0.2 percentage point higher than the October figure of 52.4 percent. The Business Activity Index continued in expansion territory in November, registering 54.5 percent, 0.2 percentage point higher than the reading of 54.3 percent recorded in October. The New Orders Index also remained in expansion in November, with a reading of 52.9 percent, 3.3 percentage points below October’s figure of 56.2 percent but 0.9 percentage point above its 12-month average of 51.7 percent. The Employment Index contracted for the sixth month in a row with a reading of 48.9 percent, a 0.7-percentage point improvement from the 48.2 percent recorded in October — the fourth consecutive monthly increase since a reading of 46.4 percent in July.

“The Supplier Deliveries Index registered 54.1 percent, 3.3 percentage points higher than the 50.8 percent recorded in October and 2.2 percentage points above its 12-month average of 51.9 percent. This is the 12th consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance. (Supplier Deliveries is the only ISM® PMI® Reports index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)

“The Prices Index registered 65.4 percent in November, its lowest reading since hitting 65.1 percent in April 2025. The November figure was a 4.6-percentage point drop from October’s reading of 70 percent. The index has exceeded 60 percent for 12 straight months.
emphasis added

Employment was in contraction for the 6th consecutive month, and prices paid remained high.

by Calculated Risk on 12/03/2025 09:15:00 AM

From the Fed: Industrial Production and Capacity Utilization

Industrial production (IP) increased 0.1 percent in September after moving down 0.3 percent in August; for the third quarter as a whole, IP increased at an annual rate of 1.1 percent. In September, the indexes for manufacturing and for mining were unchanged relative to August, and the output of utilities moved up 1.1 percent. At 101.4 percent of its 2017 average, total IP in September was 1.6 percent above its year-earlier level. Capacity utilization was unchanged relative to August at 75.9 percent, a rate that is 3.6 percentage points below its long-run (1972–2024) average.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and close to the level in February 2020 (pre-pandemic).

Capacity utilization at 75.9% is 3.6% below the average from 1972 to 2023.  This was below consensus expectations.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production increased to 101.4. This is below the pre-pandemic level.

Industrial production was below consensus expectations (with revisions).