by Calculated Risk on 8/15/2025 03:10:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Lawler: Early Read on Existing Home Sales in July

A brief excerpt:

From housing economist Tom Lawler:

Early Read on Existing Home Sales in July

Based on publicly available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 3.92 million in July, down 0.3% from June’s preliminary pace and down 1.5% from last July’s seasonally adjusted pace.

Local realtor/MLS reports suggest that the median existing single-family home sales price last month was up by about 2.1% from a year earlier. By broad region, the YOY % increase in median sales prices in the Northeast and Midwest should be a bit over 5%, while median sales prices in both the South and the West should be little changed from a year ago.

CR Note: The NAR is scheduled to release July Existing Home sales on Thursday, August 21st at 10:00 AM. The consensus is for 3.92 million SAAR, down from 3.93 million last month. Last year, the NAR reported sales in July 2024 at 3.98 million SAAR.

There is also an update on Mortgage/MBS Yields and Spreads in the article.

by Calculated Risk on 8/15/2025 11:52:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Part 2: Current State of the Housing Market; Overview for mid-August 2025

A brief excerpt:

Yesterday, in Part 1: Current State of the Housing Market; Overview for mid-August 2025 I reviewed home inventory, housing starts and sales. I noted that the key stories for existing homes are that inventory has increased sharply while sales are essentially flat compared to last year (and sales in 2024 were the lowest since 1995). That means prices are under pressure. And there are significant regional differences too.

In Part 2, I will look at house prices, mortgage rates, rents and more.
...
The Case-Shiller National Index increased 2.3% year-over-year (YoY) in May and will likely be lower year-over-year in the June report compared to May (based on other data).
...
In the January report, the Case-Shiller National index was up 4.2%, in February up 3.9%, in March up 3.4%, in April report up 2.7%, and in May up 2.3%.

And the May Case-Shiller index was a 3-month average of closing prices in March, April and May. March closing prices include some contracts signed in January.

So, not only is this trending down, but there is a significant lag to this data.

There is much more in the article.

by Calculated Risk on 8/15/2025 09:15:00 AM

From the Fed: Industrial Production and Capacity Utilization

Industrial production (IP) edged down 0.1 percent in July. Manufacturing output was unchanged after increasing 0.3 percent in June. In July, the index for mining declined 0.4 percent, and the index for utilities decreased 0.2 percent. At 104.0 percent of its 2017 average, total IP in July was 1.4 percent above its year-earlier level. Capacity utilization moved down to 77.5 percent in July, a rate that is 2.1 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 77.5% is 2.1% below the average from 1972 to 2023.  This was slightly 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 decreased to 104.0. This is above the pre-pandemic level.

Industrial production was slightly above consensus expectations.

by Calculated Risk on 8/15/2025 08:30:00 AM

On a monthly basis, retail sales increased 0.5% from June to July (seasonally adjusted), and sales were up 3.9 percent from July 2024.

From the Census Bureau report:

Advance estimates of U.S. retail and food services sales for July 2025, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $726.3 billion, up 0.5 percent from the previous month, and up 3.9 percent from July 2024. ... The May 2025 to June 2025 percent change was revised from up 0.6 percent to up 0.9 percent.
emphasis added

Click on graph for larger image.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

Retail sales ex-gasoline was up 0.5% in July.

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail and Food service sales, ex-gasoline, increased by 4.4% on a YoY basis.

The change in sales in July were at expectations and the previous two months were revised up.

by Calculated Risk on 8/14/2025 08:45:00 PM

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

Friday:
• At 8:30 AM ET, Retail sales for July is scheduled to be released.  The consensus is for 0.5% increase in retail sales.

• Also at 8:30 AM, The New York Fed Empire State manufacturing survey for August. The consensus is for a reading of 0.0, down from 5.5.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for July. The consensus is for a 0.2% decrease in Industrial Production, and for Capacity Utilization to be unchanged at 77.6%.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Preliminary for August)

by Calculated Risk on 8/14/2025 06:21:00 PM

From First American Chief Economist Mark Fleming Housing Market Returning to Reality as National Price Growth Cools Further in July, According to First American Data & Analytics Monthly Home Price Index Report

Highlights

• Annual house price appreciation is at the slowest rate since March 2012.

• House price growth reported in last month’s HPI for May 2025 to June 2025 was revised down by 0.1 percentage points, from -0.1 percent to -0.2 percent.

“It’s back to reality for national house price appreciation, as limited affordability, economic uncertainty and homeowners unwilling to enter the market and give up their low mortgage rates hinder demand amid a growing inventory of listings,” said Mark Fleming, chief economist at First American. “This supply-demand dynamic slowed annual home price growth nationally for the eighth straight month in July. National prices are now just 0.3 percent from their recent peak in May. A window has opened for incomes to outpace price growth and affordability to improve, a positive for buyers looking for an opportunity. Overall, it’s a reflection of a steadily cooling housing market, following the white-hot pandemic-era market fueled by record-low mortgage rates.”

by Calculated Risk on 8/14/2025 03:15:00 PM

From STR: U.S. hotel results for week ending 9 August

The U.S. hotel industry reported negative year-over-year comparisons, according to CoStar’s latest data through 9 August. ...

3-9 August 2025 (percentage change from comparable week in 2024):

• Occupancy: 68.0% (-1.0%)
• Average daily rate (ADR): US$159.61 (-0.6%)
• Revenue per available room (RevPAR): US$108.47 (-1.6%)
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 purple is for 2018, the record year for hotel occupancy. 

The 4-week average of the occupancy rate is tracking behind 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 into the Fall.

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 8/14/2025 12:26:00 PM

Today, in the Calculated Risk Real Estate Newsletter: MBA: Mortgage Delinquencies Decreased Slightly in Q2 2025

A brief excerpt:

From the MBA: Mortgage Delinquencies Decrease Slightly in the Second Quarter of 2025

The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 3.93 percent of all loans outstanding at the end of the second quarter of 2025, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The following graph shows the percent of loans delinquent by days past due. Overall delinquencies decreased in Q2. The sharp increase in 2020 in the 90-day bucket was due to loans in forbearance (included as delinquent, but not reported to the credit bureaus).

The percent of loans in the foreclosure process increased year-over-year from 0.43 percent in Q2 2024 to 0.48 percent in Q2 2025 (red) but remains historically low.

There is much more in the article.

by Calculated Risk on 8/14/2025 10:05:00 AM

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

A brief excerpt:

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

The key stories this year for existing homes are that inventory increased sharply, and sales are down slightly compared to last year (and sales in 2024 were the lowest since 1995). That means prices are under pressure (although there will not be a huge wave of distressed sales).

And it has been a disappointing year for new homebuilders (but not as horrible as the housing bust!). Homebuilders have a growing number of completed homes for sales, a larger than normal number of unsold homes under construction and are reducing prices to compete with more existing home inventory.

Realtor.com reports in the July 2025 Monthly Housing Market Trends Report that new listings were up 7.3% year-over-year in July. And active listings were up 24.8% year-over-year.

Homebuyers found more options in July, as the number of actively listed homes rose 24.8% compared with the same time last year. There are now over 1.1 million homes for sale nationwide, the third consecutive month with over 1 million active listings.

While July marks the 21st consecutive month of inventory gains, the pace of growth is beginning to slow. Active listings rose less than in prior months—down from 28.9% in June and 31.5% in May—suggesting the post-pandemic inventory recovery could be stalling a bit. Nationally, total active listings in July remained 13.4% below typical 2017–19 levels, a slightly wider gap than last month’s 12.9% shortfall. Overall, inventory growth seems to be slightly decelerating after taking off in early spring.

There is much more in the article.

by Calculated Risk on 8/14/2025 08:30:00 AM

The DOL reported:

In the week ending August 9, the advance figure for seasonally adjusted initial claims was 224,000, a decrease of 3,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 226,000 to 227,000. The 4-week moving average was 221,750, an increase of 750 from the previous week's revised average. The previous week's average was revised up by 250 from 220,750 to 221,000.
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 increased to 221,750.

The previous week was revised up.

Weekly claims were close to the consensus forecast.

by Calculated Risk on 8/13/2025 07:30:00 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 initial claims to increase to 228 thousand from 226 thousand last week.

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

by Calculated Risk on 8/13/2025 01:19:00 PM

Here is a look at the change in teen employment over time.

The graph below shows the employment-population ratio for teens (16 to 19 years old) since 1948.

The graph is Not Seasonally Adjusted (NSA), to show the seasonal hiring of teenagers during the summer.

A few observations:
1) Although teen employment has recovered some since the great recession, overall teen employment had been trending down. This is probably because more people are staying in school (a long term positive for the economy).

2) Teen employment was significantly impacted in 2020 by the pandemic.

Click on graph for larger image.

3) A smaller percentage of teenagers are obtaining summer employment. The seasonal spikes are smaller than in previous decades. 

The teen employment-population ratio was 35.2% in July 2025, down from 37.9% in July 2024.  Excluding 2020 due to the pandemic, this is the lowest ratio since 2015 following the financial crisis.

The teen participation rate was 42.0% in July 2025, down from 43.6% the previous July. 

This has pushed the teen unemployment rate (NSA) up to 16.1% from 13.2% in July 2024.

So, a smaller percentage of teenagers are joining the labor force during the summer as compared to previous years. This could be because of fewer employment opportunities, or because teenagers are pursuing other activities during the summer.

The decline in teenager participation is one of the reasons the overall participation rate has declined (of course, the retiring baby boomers is the main reason the overall participation rate has declined over the last 20+ years).

by Calculated Risk on 8/13/2025 09:50:00 AM

Today, in the Calculated Risk Real Estate Newsletter: 2nd Look at Local Housing Markets in July

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 July were mostly for contracts signed in May and June, and mortgage rates, according to the Freddie Mac PMMS, 6.82% in May and 6.82% in June (somewhat higher than for closed sales in June).

In July, sales in these early reporting markets were down 1.4% YoY. Last month, in June, these same markets were up 3.8% year-over-year Not Seasonally Adjusted (NSA).

Important: There were the same number of working days in July 2025 (22) as in July 2024 (22). So, the year-over-year change in the headline SA data will be similar to the NSA data.
...
Many more local markets to come!

There is much more in the article.

by Calculated Risk on 8/13/2025 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 10.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 8, 2025.

The Market Composite Index, a measure of mortgage loan application volume, increased 10.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 10 percent compared with the previous week. The Refinance Index increased 23 percent from the previous week and was 8 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 17 percent higher than the same week one year ago.

“The 30-year fixed mortgage rate declined to 6.67 percent last week, which spurred the strongest week for refinance activity since April. Borrowers responded favorably, as refinance applications increased 23 percent, driven mostly by conventional and VA applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Refinances accounted for 46.5 percent of applications and as seen in other recent refinance bursts, the average loan size grew significantly to $366,400. Borrowers with larger loan sizes continue to be more sensitive to rate movements.”

Added Kan, “Given the relative attractiveness of ARM rates compared to fixed rate loans, ARM applications increased 25 percent to their highest level since 2022, and the ARM share of all applications was almost 10 percent. However, lower rates were not enough to entice more homebuyers back into the market, as purchase applications were only up around one percent over the week, although still stronger than last year’s pace.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.67 percent from 6.77 percent, with points increasing to 0.64 from 0.59 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 17% year-over-year unadjusted. 

Red is a four-week average (blue is weekly).  

Purchase application activity is still depressed, but above the lows of October 2023 and slightly above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index increased and is picking up a little with lower mortgage rates.

by Calculated Risk on 8/12/2025 07:42:00 PM

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

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

by Calculated Risk on 8/12/2025 02:13:00 PM

The Cleveland Fed released the median CPI and the trimmed-mean CPI.

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% in July. The 16% trimmed-mean Consumer Price Index increased 0.2%. "The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report".

Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. 

On a year-over-year basis, the median CPI rose 3.6% (unchanged from 3.6% YoY in June), the trimmed-mean CPI rose 3.2% (unchanged from 3.2%), and the CPI less food and energy rose 3.1% (up from 2.9%). 

Core PCE is for June was up 2.8% YoY, unchanged from 2.8% in May.  

by Calculated Risk on 8/12/2025 12:03:00 PM

The BLS reported earlier today:

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.5 percent over the last 12 months to an index level of 316.349 (1982-84=100). For the month, the index increased 0.1 percent prior to seasonal adjustment.

CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). The calculation dates have changed over time (see Cost-of-Living Adjustments), but the current calculation uses the average CPI-W for the three months in Q3 (July, August, September) and compares to the average for the highest previous average of Q3 months. Note: this is not the headline CPI-U and is not seasonally adjusted (NSA).

• In 2024, the Q3 average of CPI-W was 308.729.

The 2024 Q3 average was the highest Q3 average, so we only have to compare Q3 this year to last year.

Click on graph for larger image.

This graph shows CPI-W since January 2000. The red lines are the Q3 average of CPI-W for each year.

Note: The year labeled is for the calculation, and the adjustment is effective for December of that year (received by beneficiaries in January of the following year).

CPI-W was up 2.5% year-over-year in July (down from 2.6% YoY in June), and although this is early - we need the data for July, August and September - my early guess is COLA will probably be close to 3% this year, up from 2.5% in 2025.

Contribution and Benefit Base

The contribution base will be adjusted using the National Average Wage Index. This is based on a one-year lag. The National Average Wage Index is not available for 2024 yet, although we know wages increased solidly in 2024. If wages increased 5% in 2024, then the contribution base next year will increase to around $185,000 in 2026, from the current $176,100.

Remember - this is an early look. What matters is average CPI-W, NSA, for all three months in Q3 (July, August and September).

by Calculated Risk on 8/12/2025 08:51:00 AM

Here are a few measures of inflation:

The first graph is the one Fed Chair Powell had mentioned two years ago as something to watch.  

Click on graph for larger image.

This graph shows the YoY price change for Services and Services less rent of shelter through July 2025.

Services were up 4.0% YoY as of July 2025, up from 3.8% YoY in June.

Services less rent of shelter was up 3.8% YoY in July, unchanged from 3.8% YoY the previous month.

The second graph shows that goods prices started to increase year-over-year (YoY) in 2020 and accelerated in 2021 due to both strong demand and supply chain disruptions.

Durables were up 1.2% YoY as of July 2025, up from 0.6% YoY the previous month.

Commodities less food and energy commodities were at 1.1% YoY in July, up from 0.6% YoY the previous month.

Here is a graph of the year-over-year change in shelter from the CPI report (through July) and housing from the PCE report (through June)

Shelter was up 3.7% year-over-year in July, down from 3.8% in June. Housing (PCE) was up 4.1% YoY in June, unchanged from 4.1% in May.

This is still catching up with private new lease data (this includes renewals whereas private data is mostly for new leases).

Core CPI ex-shelter was up 2.5% YoY in July, up from 2.1% YoY in June.

by Calculated Risk on 8/12/2025 08:30:00 AM

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis in July, after rising 0.3 percent in June, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.7 percent before seasonal adjustment.

The index for shelter rose 0.2 percent in July and was the primary factor in the all items monthly increase. The food index was unchanged over the month as the food away from home index rose 0.3 percent while the food at home index fell 0.1 percent. In contrast, the index for energy fell 1.1 percent in July as the index for gasoline decreased 2.2 percent over the month.

The index for all items less food and energy rose 0.3 percent in July, following a 0.2-percent increase in June. Indexes that increased over the month include medical care, airline fares, recreation, household furnishings and operations, and used cars and trucks. The indexes for lodging away from home and communication were among the few major indexes that decreased in July.

The all items index rose 2.7 percent for the 12 months ending July, after rising 2.7 percent over the 12 months ending June. The all items less food and energy index rose 3.1 percent over the last 12 months. The energy index decreased 1.6 percent for the 12 months ending July. The food index increased 2.9 percent over the last year.
emphasis added

The change in core CPI was above expectations. I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.

by Calculated Risk on 8/11/2025 07:54:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Steady Ahead of High Stakes Inflation Report

The average top tier 30yr fixed rate held exceptionally steady last week after moving just a bit lower over the weekend. By comparison, today's rates are much closer to Friday's latest levels and still very close to the lowest we've seen since October, 2024.

If the two key economic considerations for interest rates are jobs and inflation, the two key economic reports are the jobs report seen earlier this month and the Consumer Price Index which comes out tomorrow morning. It's often repeated that the PCE Price Index is a preferable gauge of inflation, but CPI comes out 2 weeks earlier and thus gets most of the market's attention.

Just like last month, market participants are watching to see the extent of tariff-driven inflation in tomorrow's data. If it contributes to a higher-than-expected result, we'll likely see some upward pressure on rates. [30 year fixed 6.58%]
emphasis added

Tuesday:
• At 6:00 AM ET, NFIB Small Business Optimism Index for July.

• At 8:30 AM, The Consumer Price Index for July from the BLS. The consensus is for a 0.2% increase in CPI, and a 0.3% increase in core CPI.  The consensus is for CPI to be up 2.8% year-over-year and core CPI to be up 3.0% YoY.