Today, in the Calculated Risk Real Estate Newsletter: Lawler: More on the “Neutral” Interest Rate (R*)

A brief excerpt:

From housing economist Tom Lawler:

Executive Summary: Policymakers and financial analysts looking for “models” as a guide for assessing the neutral interest rate are faced with a dilemma: various models produce significantly different results, and it is far from clear which if any model is the “most” accurate. While it is perhaps interesting to note that the average R* estimate from various models available within the Federal Reserve System is currently very close to “market-based” estimates based on TIPS forward rates adjusted for term prema estimates, that may simply be a coincidence.

However, if one takes the approach that the “best guess” estimate of R* is found by looking at the average of various models and the “market’s” assessment of R*, one would come to the conclusion that the current “best guess” estimate of the neutral real rate of interest is very close to 1.5%,

If that is the case, and if, as expected, the FOMC decides to cut its federal funds rate target by 25 bp tomorrow, then the resulting level of the federal funds rate will be very close to the neutral nominal policy rate.

There is much more in the article.

Today, in the Calculated Risk Real Estate Newsletter: 1st Look at Local Housing Markets in November

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.

November sales will be mostly for contracts signed in September and October, and mortgage rates averaged 6.35% in September and 6.25% in October (lower than for closed sales in October).

In November, sales in these early reporting markets were down 10.8% YoY. Last month, in October, these same markets were down 2.3% year-over-year Not Seasonally Adjusted (NSA).

Important: There was one fewer working days in November 2025 (18) as in November 2024 (19). So, the year-over-year change in the headline SA data will be more than the change in NSA data (there are other seasonal factors).
...
This was just several early reporting markets. Many more local markets to come!

There is much more in the article.

From the BLS: Job Openings and Labor Turnover Summary

The number of job openings was unchanged at 7.7 million in October, the U.S. Bureau of Labor Statistics reported today. Over the month, both hires and total separations were little changed at 5.1 million. Within separations, both quits (2.9 million) and layoffs and discharges (1.9 million) were little changed.
emphasis added

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

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for October; the employment report to be released this coming Tuesday will be for November.

Click on graph for larger image.

Note that hires (dark blue) and total separations (red and light blue columns stacked) are usually pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

The spike in layoffs and discharges in March 2020 is labeled, but off the chart to better show the usual data.

Jobs openings increased in October to 7.67 million from 7.66 million in September.
The number of job openings (black) were up 1% year-over-year. 

Quits were down 9% year-over-year. These are voluntary separations. (See light blue columns at bottom of graph for trend for "quits").

From Matthew Graham at Mortgage News Daily: Mortgage Rates Start Week Near 3 Month Highs

Both stocks and bonds lost ground on Monday. This pushed mortgage rates up near their highest levels in just over 3 months (because mortgages are based on bond prices). To put the 3-month highs in perspective, today's rates are right in line with those seen 2 weeks ago. [30 year fixed 6.36%]
emphasis added

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

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

From Dodge Data Analytics: Dodge Momentum Index Decreases 1% in November

The Dodge Momentum Index (DMI), issued by Dodge Construction Network, decreased 1.1% in November to 276.8 (2000=100) from the downwardly revised October reading of 280.0. Over the month, commercial planning ticked down 0.1% and institutional planning declined by 3.4%. Year-to-date, the DMI is up 36% from the average reading over the same period in 2024.

“The influx of high-value data center work, compounded by inflationary cost pressures, continues to support elevated DMI levels,” stated Sarah Martin, Associate Director of Forecasting at Dodge Construction Network. “Overall, nonresidential construction is expected to strengthen in 2027, led primarily by data center and healthcare projects. Other nonresidential sectors are more likely to face softer demand and heightened macroeconomic risks.”

On the commercial side, activity slowed down for warehouses and hotels, while planning momentum was sustained for data centers, traditional office buildings and retail stores. On the institutional side, education, healthcare, public and recreational planning saw weaker momentum, after strong activity in recent months. Planning for religious buildings, however, continued to accelerate. Year-over-year, the DMI was up 50% when compared to November 2024. The commercial segment was up 57% (+36% when data centers are removed) and the institutional segment was up 37% over the same period.
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The DMI is a monthly measure based on the three-month moving value of nonresidential building projects going into planning, shown to lead construction spending for nonresidential buildings by a full year to 18 months.
emphasis added

Click on graph for larger image.

This graph shows the Dodge Momentum Index since 2002. The index was at 276.8 in November, down from 280.0 the previous month.

According to Dodge, this index leads "construction spending for nonresidential buildings a full year to 18 months".  
Commercial construction is typically a lagging economic indicator.