Today, in the Calculated Risk Real Estate Newsletter: Inflation Adjusted House Prices 3.0% Below 2022 Peak

Excerpt:

It has been 19 years since the housing bubble peak, ancient history for many readers!

In the September Case-Shiller house price index released last Tuesday, the seasonally adjusted National Index (SA), was reported as being 78% above the bubble peak. However, in real terms, the National index (SA) is about 9.4% above the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is 0.9% above the bubble peak.

People usually graph nominal house prices, but it is also important to look at prices in real terms. As an example, if a house price was $300,000 in January 2010, the price would be $447,000 today adjusted for inflation (49% increase). That is why the second graph below is important - this shows "real" prices.

The third graph shows the price-to-rent ratio, and the fourth graph is the affordability index. The last graph shows the 5-year real return based on the Case-Shiller National Index.
...
The second graph shows the same two indexes in real terms (adjusted for inflation using CPI).

In real terms (using CPI), the National index is 3.0% below the recent peak, and the Composite 20 index is 3.2% below the recent peak in 2022.

Both the real National index and the Comp-20 index decreased in August. The real National index has decreased for 9 consecutive months.

It has now been 40 months since the real peak in house prices. Typically, after a sharp increase in prices, it takes a number of years for real prices to reach new highs (see House Prices: 7 Years in Purgatory)

There is much more in the article!

(Posted with permission). The ISM manufacturing index indicated contraction. The PMI® was at 48.2% in November, down from 48.7% in October. The employment index was at 44.0%, down from 46.9% the previous month, and the new orders index was at 47.4%, down from 49.4%.

From ISM: Manufacturing PMI® at 48.2% November 2025 ISM® Manufacturing PMI® Report

Economic activity in the manufacturing sector contracted in November for the ninth 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 48.2 percent in November, a 0.5-percentage point decrease compared to the reading of 48.7 percent in October. The overall economy continued in expansion for the 67th 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 a third straight month in November following one month of growth; the figure of 47.4 percent is 2 percentage points lower than the 49.4 percent recorded in October. The November reading of the Production Index (51.4 percent) is 3.2 percentage points higher than October’s figure of 48.2 percent. The Prices Index remained in expansion (or ‘increasing’ territory), registering 58.5 percent, up 0.5 percentage point compared to the reading of 58 percent reported in October. The Backlog of Orders Index registered 44 percent, down 3.9 percentage points compared to the 47.9 percent recorded in October. The Employment Index registered 44 percent, down 2 percentage points from October’s figure of 46 percent.
emphasis added

This suggests manufacturing contracted for the ninth consecutive month in November..  This was below the consensus forecast, and employment was very weak and prices very strong.

Altos reports that active single-family inventory was down 1.6% week-over-week.  Inventory usually starts to decline in the fall and then declines sharply during the holiday season.
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 15.6% compared to the same week in 2024 (last week it was up 15.5%), and down 4.3% compared to the same week in 2019 (last week it was down 4.7%). 
Inventory started 2025 down 22% compared to 2019.  Inventory has closed most of that gap, but it appears inventory will still be below 2019 levels at the end of 2025.
This second inventory graph is courtesy of Altos Research.
As of November 28th, inventory was at 817 thousand (7-day average), compared to 830 thousand the prior week.  
Mike Simonsen discusses this data and much more regularly on YouTube

Weekend:
• Schedule for Week of November 30, 2025

Monday:
• At 10:00 AM ET, ISM Manufacturing Index for November.  The consensus is for 48.6%, down from 48.7%.

• At 10:00 AM: Construction Spending for October. 

• At 8:00 PM, Speech, Fed Chair Jerome Powell, Brief Remarks and Panel Discussion with Michael Boskin and Condoleezza Rice on George Shultz and his Economic Policy Contributions At the Hoover Institution’s George P. Shultz Memorial Lecture Series: George Shultz and Economic Policy, Stanford, Calif.

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

Oil prices were up over the last week with WTI futures at $58.55 per barrel and Brent at $62.38 per barrel. A year ago, WTI was at $68, and Brent was at $74 - so WTI oil prices are down about 14% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.96 per gallon. A year ago, prices were at $3.01 per gallon, so gasoline prices are down $0.05 year-over-year.

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 November 28, 2025, LBR was at $544.00 per 1,000 board feet, down 7.6% 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.  
Now, even with the tariffs, prices are down slightly year-over-year suggesting weak demand.

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Case-Shiller: National House Price Index Up 1.3% year-over-year in September

• FHFA Announces Baseline Conforming Loan Limit Will Increase to $832,750 in 2026

• Fannie Mae Multi-Family Delinquency Rate Highest Since Housing Bust (ex-pandemic)

• Freddie Mac House Price Index Up 1.0% Year-over-Year in October

• Every Housing Down Cycle is "unhappy in its own way"

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

Special Note: There is still uncertainty on when some economic reports will be released. The employment report for November will NOT be released this week.  Items listed in RED have not been announced and will likely not be released this week.
The key reports this week are the November ISM manufacturing index and November vehicle sales.

----- Monday, December 1st -----
10:00 AM: ISM Manufacturing Index for November.  The consensus is for 48.6%, down from 48.7%.

10:00 AM: Construction Spending for October. 

8:00 PM: Speech, Fed Chair Jerome Powell, Brief Remarks and Panel Discussion with Michael Boskin and Condoleezza Rice on George Shultz and his Economic Policy Contributions At the Hoover Institution’s George P. Shultz Memorial Lecture Series: George Shultz and Economic Policy, Stanford, Calif.

----- Tuesday, December 2nd -----
TAll day: Light vehicle sales for November.

The consensus is for 15.4 million SAAR in November, up from 15.3 million SAAR in October (Seasonally Adjusted Annual Rate).

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

----- Wednesday, December 3rd -----
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 November. This report is for private payrolls only (no government).  The consensus is for 20,000 jobs added, down from 42,000 in October.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for October.

This graph shows industrial production since 1967.

The consensus is for no change in Industrial Production, and for Capacity Utilization to decrease to 77.3%.

10:00 AM: the ISM Services Index for November.  The consensus is for 52.1, down from 52.4.

----- Thursday, December 4th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 218,000, up from 216,000 last week.

----- Friday, December 5th -----
10:00 AM: Personal Income and Outlays for September. The consensus is for a 0.4% increase in personal income, and for a 0.4% increase in personal spending. And for the Core PCE price index to increase 0.2% (up 2.9% YoY).

10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for December).

From J.D. Power: November New-Vehicle Retail Sales Decline 4.8% as Effects of EV Pull-Ahead Persist Brief excerpt:

Total new-vehicle sales for November 2025, including retail and non-retail transactions, are projected to reach 1,255,900, a 5.2% decrease year over year, according to a joint forecast from J.D. Power and GlobalData. November 2025 has 25 selling days, one fewer than November 2024.

The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 15.4 million units, down 1.2 million units from November 2024.
...
Thomas King, president of the data and analytics division at J.D. Power:

"November’s results reflect another notable—yet anticipated—decline in the new-vehicle sales pace, driven largely by the pull-ahead of electric vehicle (EV) purchases prior to the expiration of federal EV tax credits on Sept. 30. That expiration prompted many shoppers to accelerate buying decisions, resulting in a surge in EV sales that temporarily inflated the overall industry sales pace. Now, two months after the credit expired, the industry continues to feel the effect of those accelerated purchases. In November, EVs are expected to account for just 6.0% of new-vehicle retail sales, consistent with October but well below the 12.9% recorded in September.
emphasis added

From Haig Stoddard at Omdia (pay site): US Light Vehicle Sales Declining Again in November; Falling Inventory Lowers Chance for a December Rebound

Tighter inventory, tanking deliveries of battery-electric vehicles, and an overall rise in prices for what is available are capping demand, with expectations the October-November slowdown continues in December.

Click on graph for larger image.

This graph shows actual sales from the BEA (Blue), and J.D. Power's forecast for November(Red).

On a seasonally adjusted annual rate basis, the J.D. Power forecast of 154 million SAAR would be up slightly from last month, and down 7.6% from a year ago.
All of Q4 will likely be difficult for vehicle sales.

The advance release of Q3 GDP has been cancelled, and the 2nd release has not been scheduled.

From BofA:

On net, given the higher weighting of the months of Jul and Aug in quarterly consumer spending as compared to Sep, our 3Q PCE tracking is down a tenth to 3.1% q/q saar. This along with higher-than-expected Aug business inventories left our 3Q GDP tracking at 2.8% q/q saar. [November 26th estimate]
emphasis added

From Goldman:

We boosted our Q3 GDP tracking estimate by 0.1pp to +3.8% (quarter-over-quarter annualized). Our Q3 domestic final sales estimate stands at +2.7%. [November 19th estimate]

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2025 is 3.9 percent on November 26, down from 4.0 percent on November 25. After this morning’s advance durable manufacturing report from the US Census Bureau, the nowcast of third-quarter real gross private domestic investment growth decreased from 4.4 percent to 3.5 percent. [November 26th estimate]

Today, in the Calculated Risk Real Estate Newsletter: Fannie Mae Multi-Family Delinquency Rate Highest Since Housing Bust (ex-pandemic)

Excerpt:

Fannie and Freddie: Single Family Delinquency Rate Mostly Unchanged in October

Freddie Mac reported that the Single-Family serious delinquency rate in October was 0.56%, down from 0.57% September. Freddie's rate is up year-over-year from 0.55% in October 2024, however, this is below 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 October was 0.54%, unchanged from 0.54% in September. The serious delinquency rate is up year-over-year from 0.52% in October 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.

Here are five economic reasons to be thankful this Thanksgiving. (Hat Tip to Neil Irwin who started doing this years ago)

1) The Unemployment Rate is at 4.4%

The unemployment rate was at 4.4% in September. 
The unemployment rate is down from 14.7% in April 2020 (the highest rate since the Great Depression).

The unemployment rate is up from 3.4% in April 2023 - and that matched the lowest unemployment rate since 1969!
Even though the rate has increased recently, this is historically a low unemployment rate.

2) Low unemployment claims.

This graph shows the 4-week moving average of weekly claims since 1971.
Weekly claims were at 216,000 last week.

The dashed line on the graph is the current 4-week average.
Even though weekly claims have bounced around a little recently, the 4-week average is close to the lowest level in 50 years.

3) Mortgage Debt as a Percent of GDP has Fallen Significantly

This graph shows household mortgage debt as a percent of GDP.  
Note this graph is through Q2 2025 was impacted by the sharp decline in Q2 2020 GDP.

Mortgage debt, as a percent of GDP is at 44.6% - down from Q1 - and down from a peak of 73.3% of GDP during the housing bust.

4) Mortgage Delinquency Rate is Low

This graph, based on data from the MBA through Q3 2025, shows the percent of loans delinquent by days past due.  
Although mortgage delinquencies are up a little from Q2 2023 - the lowest level since the MBA survey started in 1979 - delinquencies are still historically very low.
Note: 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 are low.

5) Household Debt burdens at Low Levels (ex-pandemic)

This graph, based on data from the Federal Reserve, shows the Household Debt Service Ratio (DSR), and the DSR for mortgages (blue) and consumer debt (yellow).
The Household debt service ratio was at 11.3% in Q2 2025, slightly below the pre-pandemic level of 11.6%.
The DSR for mortgages (blue) is close to the pre-pandemic level.

Happy This data suggests aggregate household cash flow is in a solid position.

Happy Thanksgiving to All!

From Intercontinental Exchange: ICE First Look at Mortgage Performance: Increased Refinance Activity Drives Mortgage Prepayments to 3.5-Year High

Intercontinental Exchange, Inc. (NYSE:ICE) ... oday released the October 2025 ICE First Look at mortgage delinquency, foreclosure and prepayment trends.

“Softening mortgage rates expanded the pool of refinance candidates in October, pushing prepayments to their highest level in three and a half years,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “This trend was largely driven by people who purchased homes at elevated rates in recent years seizing the opportunity to lower their monthly payments.”

“Overall mortgage health remains solid, with continued improvement in delinquency rates across all stages,” continued Walden. “While foreclosure activity has ticked up, levels remain historically low. This uptick is driven by a rise in FHA foreclosures along with the resumption in VA foreclosures following last year's moratorium."

Key takeaways from this month’s findings include:

• Delinquencies improved: The national delinquency rate fell by 7 basis points (bps) in October to 3.34%. This is down 11 bps from the same time last year and 53 bps below the October 2019 pre-pandemic benchmark.

• Broad strength in delinquency rates: Performance improved across the board, with both early-stage (30-day) and late-stage (90+ day) delinquencies declining during the month.

• Prepayments reached a multi-year high: The single month mortality (SMM) rate, which tracks prepayments, rose by 27 bps in October to 1.01%. This marks the highest level in 3.5 years and an increase of 16 bps from last year when interest rates were at similar levels.

• Foreclosure activity trending upward: Although October foreclosure starts slowed by 9.8% from the prior month, the overall trend continues to rise. Foreclosure inventory is up by 37,000 (+19%) year over year, and foreclosure sales have increased by 1,900 (+32%) from last year's levels.

• Government loans driving foreclosure growth: While foreclosure activity remains muted by historical standards, the number of loans in active foreclosure hit its highest level since early 2023, driven by a notable rise in FHA foreclosures (+50% YoY) along with a resumption of VA activity following last year's moratorium.
emphasis added

Click on graph for larger image.

Here is a table from ICE.

Beige Book - November 2025

Economic activity was little changed since the previous report, according to most of the twelve Federal Reserve Districts, though two Districts noted a modest decline and one reported modest growth. Overall consumer spending declined further, while higher-end retail spending remained resilient. Some retailers noted a negative impact on consumer purchases from the government shutdown, and auto dealers saw declines in EV sales following the expiration of the federal tax credit. Reports of travel and tourism activity reflected little change in recent weeks, with some contacts noting cautious discretionary spending among consumers. Manufacturing activity increased somewhat, according to most Districts, though tariffs and tariff uncertainty remained a headwind. Revenues in the nonfinancial services sector were mostly flat to down, and reports of loan demand were mixed. Some Districts reported declines in residential construction, while others said it was unchanged, and home sales activity varied. A few Districts noted ongoing recovery in the office real estate market. Conditions in the agriculture and energy sectors were largely stable, though some contacts cited challenges from the low-price environment for oil and for some crops. Community organizations saw increased demand for food assistance, due in part to disruptions in SNAP benefits during the government shutdown. Outlooks were largely unchanged overall. Some contacts noted an increased risk of slower activity in coming months, while some optimism was noted among manufacturers.

Labor Markets

Employment declined slightly over the current period with around half of Districts noting weaker labor demand. Despite an uptick in layoff announcements, more Districts reported contacts limiting headcounts using hiring freezes, replacement-only hiring, and attrition than through layoffs. In addition, several employers adjusted hours worked to accommodate higher or lower than expected business volume instead of adjusting the number of employees. A few firms noted that artificial intelligence replaced entry-level positions or made existing workers productive enough to curb new hiring. Across most Districts, employers had an easier time finding workers, but there were still pockets of difficulty related to certain skilled positions and fewer immigrant workers. Wages generally grew at a modest pace; however, some sectors such as manufacturing, construction, and health care experienced more moderate wage pressure because of a tighter labor supply. Furthermore, rising health insurance premiums continue to put upward pressure on labor costs.

Prices

Prices rose moderately during the reporting period. Input cost pressures were widespread in manufacturing and retail, largely reflecting tariff-induced increases. Some Districts noted rising costs for insurance, utilities, technology, and health care. The extent of passthrough of higher input costs to customers varied, and depended upon demand, competitive pressures, price sensitivity of consumers, and pushback from clients. There were multiple reports of margin compression or firms facing financial strain stemming from tariffs. Prices declined for certain materials, which firms attributed to sluggish demand, deferred tariff implementation, or reduced tariff rates. Looking ahead, contacts largely anticipate upward cost pressures to persist but plans to raise prices in the near term were mixed.
emphasis added

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Up 1.0% Year-over-Year in September

A brief excerpt:

Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.13% month-over-month (MoM) on a seasonally adjusted (SA) basis in October.

On a year-over-year (YoY) basis, the National FMHPI was up 1.0% in October, down from up 1.1% YoY in September. The YoY increase peaked at 19.2% in July 2021, and for this cycle, and previously bottomed at up 1.1% YoY in April 2023. The YoY change in October is a new cycle low. ...

As of October, 26 states and D.C. were below their previous peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peaks are in D.C. (-3.2%), Florida (-3.0%) and Texas (-2.5%).

For cities (Core-based Statistical Areas, CBSA), 200 of the 387 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 5 of the 7 cities with the largest price declines are in Florida.

Florida has the largest number of CBSAs on the list and Texas has the 2nd most.

There is much more in the article!

The DOL reported:

In the week ending November 22, the advance figure for seasonally adjusted initial claims was 216,000, a decrease of 6,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 220,000 to 222,000. The 4-week moving average was 223,750, a decrease of 1,000 from the previous week's revised average. The previous week's average was revised up by 500 from 224,250 to 224,750.
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 223,750.

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.

• At 8:30 AM, The initial weekly unemployment claims report will be released.  

• Also at 8:30 AM, Durable Goods Orders for September from the Census Bureau.

• At 9:45 AM, Chicago Purchasing Managers Index for November. 

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

On a monthly basis, retail sales increased 0.2% from August to September (seasonally adjusted), and sales were up 4.3 percent from September 2024.

From the Census Bureau report:

dvance estimates of U.S. retail and food services sales for September 2025, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $733.3 billion, up 0.2 percent from the previous month, and up 4.3 percent from September 2024. ... The July 2025 to August 2025 percent change was unrevised from up 0.6 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 unchanged in September.

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 September were below expectations, however, the previous two months were revised up slightly.

Today, in the Calculated Risk Real Estate Newsletter: FHFA Announces Baseline Conforming Loan Limit Will Increase to $832,750 in 2026

A brief excerpt:

After the release of the FHFA house price index for September this morning, the FHFA released the conforming loan limits for 2026.

From the FHFA: FHFA Announces Conforming Loan Limit Values for 2025

U.S. Federal Housing (FHFA) today announced the conforming loan limit values (CLLs) for mortgages Fannie Mae and Freddie Mac (the Enterprises) will acquire in 2026. In most of the United States, the 2026 CLL value for one-unit properties will be $832,750, an increase of $26,250 from 2025. ….

For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit value, the applicable loan limit will be higher than the baseline loan limit. HERA establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting the ceiling at 150 percent of the baseline limit. Median home values generally increased in high-cost areas in 2025, which increased their CLL values. The new ceiling loan limit for one-unit properties will be $1,249,125, which is 150 percent of $832,750

Note that there are different loan limits for various geographical areas. There are also different loan limits depending on the number of units (from 1 to 4 units). For example, next year the CLL is $832,750 for one-unit properties in low-cost areas. The four-unit limit is $1,601,750.

For high-cost areas like Los Angeles County, the CLL is $1,249,125 for one-unit properties (50% higher than the baseline CLL) and the four-unit limit is $2,402,625.

There is more in the article.

From the NAR: NAR Pending Home Sales Report Shows 1.9% Increase in October

Pending home sales in October increased by 1.9% from the prior month and fell 0.4% year over year, according to the National Association of REALTORS® Pending Home Sales Report. ...

Month-Over-Month
1.9% increase in pending home sales
Gains in the Northeast, Midwest and South; decline in the West

Year Over Year
0.4% decrease in pending home sales
Gains in the Midwest and South; decline in the Northeast and West
emphasis added

Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in November and December.

Today, in the Calculated Risk Real Estate Newsletter: Case-Shiller: National House Price Index Up 1.3% year-over-year in September

Excerpt:

S&P/Case-Shiller released the monthly Home Price Indices for September (”September” is a 3-month average of July, August and September closing prices). July closing prices include some contracts signed in May, so there is a significant lag to this data. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).

This is the 2nd consecutive month with a slight MoM increase seasonally adjusted.

There is much more in the article.