by Calculated Risk on 6/02/2025 08:09:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Edge Higher to Start Busy Week

Mortgage rates have been in an exceptionally narrow range since last Tuesday with the 30yr fixed index hovering just under 7%. The average lender is just a hair higher today versus last Friday, but still just under 7%.
...
As the week continues, several other important reports will be released. Friday's jobs report is traditionally the most closely watched when it comes to the rate market. [30 year fixed 6.96%]
emphasis added

Tuesday:
• At 10:00 AM ET, Job Openings and Labor Turnover Survey for April from the BLS.

• Late, Light vehicle sales for May. The consensus is for light vehicle sales to be 16.4 million SAAR in May, down from 17.3 million in April (Seasonally Adjusted Annual Rate).

Weekly Schedule

by Calculated Risk on 6/02/2025 02:01:00 PM

Today, in the Real Estate Newsletter: June ICE Mortgage Monitor: Home Prices Continue to Cool

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 2.0% year-over-year in April, down from 2.4% YoY in March. The early look at the May HPI shows a 1.6% YoY increase.

• Improved inventory levels are providing more options and a softer price dynamic for homeowners shopping this spring

• Annual home price growth cooled to a revised +2.0% in April from +3.6% at the start of the year, with ICE’s Home Price Index suggesting price growth cooled further to +1.6% in May, the slowest growth rate in nearly two years

• May data also shows home prices rose by a modest 0.1% in the month on a seasonally adjusted basis, which would mark the softest single-month growth since late 2023, when mortgage rates climbed above 7.5%

• If recent seasonally adjusted gains persist, the annual home price growth rate is poised to cool further

• Single family prices were up by +1.9% in May from the same time last year, with condos down -0.7% as signals of a softer condo market grow louder

• Condo prices are now down from last year in half of all major U.S. markets, with the largest declines along Florida’s Gulf Coast, plus Stockton CA, Austin, Memphis and Denver

There is much more in the newsletter.

by Calculated Risk on 6/02/2025 11:10:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Fannie and Freddie: Single Family Serious Delinquency Rates Decreased in April

Excerpt:

Freddie Mac reported that the Single-Family serious delinquency rate in April was 0.57%, down from 0.59% March. Freddie's rate is up year-over-year from 0.51% in April 2024, however, this is close to the pre-pandemic level of 0.60%.

Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble and peaked at 3.17% in August 2020 during the pandemic.

Fannie Mae reported that the Single-Family serious delinquency rate in March was 0.55%, down from 0.56% in March. The serious delinquency rate is up year-over-year from 0.49% in April 2024, however, this is below the pre-pandemic lows of 0.65%.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble and peaked at 3.32% in August 2020 during the pandemic.

There is much more in the article.

by Calculated Risk on 6/02/2025 10:18:00 AM

From the Census Bureau reported that overall construction spending decreased:

Construction spending during April 2025 was estimated at a seasonally adjusted annual rate of $2,152.4 billion, 0.4 percent below the revised March estimate of $2,162.0 billion. The April figure is 0.5 percent below the April 2024 estimate of $2,163.2 billion. During the first four months of this year, construction spending amounted to $660.2 billion, 1.4 percent above the $651.3 billion for the same period in 2024.
emphasis added

Private spending decreased and public spending increased:

Spending on private construction was at a seasonally adjusted annual rate of $1,638.9 billion, 0.7 percent below the revised March estimate of $1,650.8 billion. ...

In April, the estimated seasonally adjusted annual rate of public construction spending was $513.5 billion, 0.4 percent above the revised March estimate of $511.3 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 8.9% below the peak in 2022.

Private non-residential (blue) spending is 1.4% below the peak in February 2025.

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 4.8%. Private non-residential spending is up 1.0% year-over-year. Public spending is up 5.5% year-over-year.

This was below consensus expectations and spending for the previous two months were revised down significantly.

by Calculated Risk on 6/02/2025 10:00:00 AM

(Posted with permission). The ISM manufacturing index indicated expansion. The PMI® was at 48.5% in May, down from 48.7% in April. The employment index was at 46.8%, up from 46.5% the previous month, and the new orders index was at 47.6%, up from 47.2%.

From ISM: Manufacturing PMI® at 48.5% May 2025 Manufacturing ISM® Report On Business®

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

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 48.5 percent in May, 0.2 percentage point lower compared to the 48.7 percent recorded in April. The overall economy continued in expansion for the 61st 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 contracted for the fourth month in a row following a three-month period of expansion; the figure of 47.6 percent is 0.4 percentage point higher than the 47.2 percent recorded in April. The May reading of the Production Index (45.4 percent) is 1.4 percentage points higher than April’s figure of 44 percent. The index continued in contraction in March for the third straight month after two months of expansion preceded by eight months of contraction. The Prices Index remained in expansion (or ‘increasing’) territory, registering 69.4 percent, down 0.4 percentage point compared to the reading of 69.8 percent in April. The Backlog of Orders Index registered 47.1 percent, up 3.4 percentage points compared to the 43.7 percent recorded in April. The Employment Index registered 46.8 percent, up 0.3 percentage point from April’s figure of 46.5 percent.

“The Supplier Deliveries Index indicated a continued slowing of deliveries, registering 56.1 percent, 0.9 percentage point higher than the 55.2 percent recorded in April. (Supplier Deliveries is the only ISM® Report On Business® 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 Inventories Index registered 46.7 percent, down 4.1 percentage points compared to April’s reading of 50.8 percent.

“The New Export Orders Index reading of 40.1 percent is 3 percentage points lower than the reading of 43.1 percent registered in April. The Imports Index plunged into extreme contraction in May, registering 39.9 percent, 7.2 percentage points lower than April’s reading of 47.1 percent.”
emphasis added

This suggests manufacturing contracted in May.  This was below the consensus forecast and new export orders were weak and prices very strong.

by Calculated Risk on 6/02/2025 08:11:00 AM

Altos reports that active single-family inventory was up 2.1% week-over-week.

Inventory is now up 28.7% from the seasonal bottom in January and is increasing.  

Usually, inventory is up about 16% 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.

Click on graph for larger image.

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

Inventory was up 32.8% compared to the same week in 2024 (last week it was up 32.4%), and down 14.6% compared to the same week in 2019 (last week it was down 15.5%). 

This is the highest level since 2019.

It now appears inventory will be close to 2019 levels towards the end of 2025.

This second inventory graph is courtesy of Altos Research.

As of May 30th, inventory was at 804 thousand (7-day average), compared to 787 thousand the prior week. 

Mike Simonsen discusses this data regularly on Youtube

by Calculated Risk on 6/01/2025 06:13:00 PM

Weekend:
• Schedule for Week of June 1, 2025

Monday:
• At 10:00 AM ET, ISM Manufacturing Index for May. The consensus is for the ISM to be at 49.2, up from 48.7 in April.

• Also at 10:00 AM, Construction Spending for April. The consensus is for a 0.4% increase in construction spending.

• At 1:00 PM, Speech, Fed Chair Jerome Powell, Opening Remarks, At the Federal Reserve Board’s International Finance Division 75th Anniversary Conference, Washington, D.C.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 20 and DOW futures are down 134 (fair value).

Oil prices were down over the last week with WTI futures at $60.79 per barrel and Brent at $62.78 per barrel. A year ago, WTI was at $78, and Brent was at $79 - so WTI oil prices are down about 22% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.10 per gallon. A year ago, prices were at $3.52 per gallon, so gasoline prices are down $0.42 year-over-year.

by Calculated Risk on 6/01/2025 08:21:00 AM

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 May 30, 2025, LBR was at $593.00 per 1,000 board feet, up 17% 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.

Last year, prices bottomed in July at $449.00 per 1,000 board feet.

Note that 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.

The recent year-over-year increase might be due to the tariffs.  

by Calculated Risk on 5/31/2025 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 3.4% year-over-year in March

• Inflation Adjusted House Prices 1.0% Below 2022 Peak

• Freddie Mac House Price Index Declined in April; Up 2.6% Year-over-year

• Final Look at Local Housing Markets in April and a Look Ahead to May Sales

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

by Calculated Risk on 5/31/2025 08:11:00 AM

The key report scheduled for this week is the May employment report.

Other key reports include the May ISM Manufacturing, Vehicle Sales and April trade balance.

----- Monday, June 2nd -----
10:00 AM: ISM Manufacturing Index for May. The consensus is for the ISM to be at 49.2, up from 48.7 in April.

10:00 AM: Construction Spending for April. The consensus is for a 0.4% increase in construction spending.

1:00 PM: Speech, Fed Chair Jerome Powell, Opening Remarks, At the Federal Reserve Board’s International Finance Division 75th Anniversary Conference, Washington, D.C.

----- Tuesday, June 3rd -----
10:00 AM ET: Job Openings and Labor Turnover Survey for April from the BLS.

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

Jobs openings decreased in March to 7.19 million from 7.48 million in February. The number of job openings (black) were down 11% year-over-year.

Quits were unchanged year-over-year.

Late: Light vehicle sales for May.

The consensus is for light vehicle sales to be 16.4 million SAAR in May, down from 17.3 million in April (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, June 4th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for May. This report is for private payrolls only (no government). The consensus is for 120,000 payroll jobs added in May, up from 62,000 in April.

10:00 AM: the ISM Services Index for May.   The consensus is for a reading of 52.0, up from 51.6.

----- Thursday, June 5th -----
8:30 AM: Trade Balance report for April from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum. 

The blue line is the total deficit, and the black line is the petroleum surplus, and the red line is the trade deficit ex-petroleum products.

The consensus is the trade deficit to be $117.3 billion.  The U.S. trade deficit was at $140.5 Billion in March.

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims of 230 thousand, down from 240 thousand last week.

----- Friday, June 6th -----
8:30 AM: Employment Report for May.   The consensus is for 130,000 jobs added, and for the unemployment rate to be unchanged at 4.2%.

There were 177,000 jobs added in April, and the unemployment rate was at 4.2%.

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