Today, in the Calculated Risk Real Estate Newsletter: Fannie Mae Multi-Family Delinquency Rate Almost to Housing Bust High

Excerpt:

Fannie and Freddie: Single Family Delinquency Rate Increased in November

Freddie Mac reported that the Single-Family serious delinquency rate in November was 0.58%, up from 0.56% October. Freddie's rate is up year-over-year from 0.56% in November 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 November was 0.58%, up from 0.54% in October. The serious delinquency rate is up year-over-year from 0.53% in November 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.

Today, in the CalculatedRisk Real Estate Newsletter: Question #8 for 2026: How much will Residential investment change in 2026? How about housing starts and new home sales in 2026?

Excerpt:

Earlier I posted some questions on my blog for next year: Ten Economic Questions for 2026. Some of these questions concern real estate (inventory, house prices, housing starts, new home sales), and I’ll post thoughts on those in this newsletter (others like GDP and employment will be on my blog).

I'm adding some thoughts, and maybe some predictions for each question.

Here is a review of the Ten Economic Questions for 2025.

8) Residential Investment: How much will Residential investment (RI) change in 2026? How about housing starts and new home sales in 2026?

First a graph of RI as a percent of Gross Domestic Product (GDP) through Q3 2025:

We don't have the data yet for Q4 2025 yet, but RI as a percent of GDP will likely be down year-over-year.

Happy Holidays!

Here is a High Sierra webcam (it is snowing!)

Best Wishes to All!

Today, in the CalculatedRisk Real Estate Newsletter: Question #9 for 2026: What will happen with house prices in 2026?

Excerpt:

Earlier I posted some questions on my blog for next year: Ten Economic Questions for 2026. Some of these questions concern real estate (inventory, house prices, housing starts, new home sales), and I’ll post thoughts on those in this newsletter (others like GDP and employment will be on my blog).

I'm adding some thoughts, and maybe some predictions for each question.

Here is a review of the Ten Economic Questions for 2025.

9) House Prices: It appears house prices - as measured by the national repeat sales index (Case-Shiller, FHFA, and Freddie Mac) - will be mostly flat in 2025. What will happen with house prices in 2026?

he following graph shows the year-over-year change through September 2025, in the seasonally adjusted Case-Shiller Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000). The Case-Shiller Home Price Indices for "September" is a 3-month average of July, August and September closing prices. September closing prices include some contracts signed in May, so there is a significant lag to this data.

The Composite 10 NSA was up 2.0% year-over-year. The Composite 20 NSA was up 1.4% year-over-year. The National index NSA was up 1.3% year-over-year.

There is much more in the article.

The DOL reported:

In the week ending December 20, the advance figure for seasonally adjusted initial claims was 214,000, a decrease of 10,000 from the previous week's unrevised level of 224,000. The 4-week moving average was 216,750, a decrease of 750 from the previous week's unrevised average of 217,500.
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 216,750.

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

ortgage applications decreased 5.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 19, 2025.

The Market Composite Index, a measure of mortgage loan application volume, decreased 5.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 6 percent from the previous week and was 110 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 16 percent higher than the same week one year ago.

“Overall mortgage application volume fell last week, despite the slight decline in mortgage rates,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “MBA expects the trends of a softening job market, sticky inflation, elevated home inventories, and steady mortgage rates will persist into the new year.”

Added Fratantoni, “Purchase application volume last week was 16 percent higher than a year earlier. We are forecasting continued, modest growth in terms of home sales in 2026.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.31 percent from 6.38 percent, with points decreasing to 0.57 from 0.62 (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 16% year-over-year unadjusted. 
Red is a four-week average (blue is weekly).  
Purchase application activity is still depressed, but solidly above the lows of 2023 and above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index increased from the bottom as mortgage rates declined, but is down from the recent peak in September.

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.  The consensus is for 225,000 initial claims, up from 224,000 last week.

NOTE: The NYSE and the NASDAQ will close early at 1:00 PM ET.

From Intercontinental Exchange: ICE First Look at Mortgage Performance: Seasonal and Calendar Factors Drive Rise in November Delinquencies

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

“While the topline delinquency numbers show a sharp increase, we’ve seen comparable spikes in prior years when November ended on a Sunday and scheduled payments didn’t post until early December,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “Overall performance was in line with what historical patterns would suggest. That said, December data will be important to watch to confirm how quickly borrowers recover from this temporary uptick.”

Key takeaways from this month’s findings include:

• Delinquencies rose: The number of past-due mortgages rose by 275,000 from October to 2.3 million in November, pushing the national delinquency rate to 3.85% — the highest level in over four years.

• Inflow of newly delinquent borrowers: 609,000 borrowers who were current on payments in October became delinquent in November, marking the largest single-month inflow since May 2020. Rolls from 30- to 60-day and 60- to 90-day delinquency bands also increased sharply.

• Delinquencies aligned with historical calendar effects: November’s delinquency rate increase was in line with prior years when the month ended on a Sunday, which last occurred in 2014 (+61 bps), 2008 (+112 bps), and 2003 (+57 bps) — all of which exceeded this year’s 50 basis point increase.

• Prepayments declined: After reaching a 3.5-year high in October, prepayment activity retreated in November, falling 18% month over month.

• Foreclosure activity mixed: Foreclosure activity dipped in November due to seasonal and calendar effects. However, foreclosure starts (+25%), sales (+25%) and active foreclosure volumes (+21%) all remain well above last year’s levels.
emphasis added

Click on graph for larger image.

Here is a table from ICE.

Today, in the Calculated Risk Real Estate Newsletter: Final Look at Housing Markets in November and a Look Ahead to December Sales

A brief excerpt:

After the National Association of Realtors® (NAR) releases the monthly existing home sales report, I pick up additional local market data that is reported after the NAR. This is the final look at local markets in November.

There were several key stories for November:

• Sales NSA are down 0.5% YoY through November, and sales last year were the lowest since 1995!

• Sales SAAR (seasonally adjusted annual rate) have bounced around 4 million for the last 3 years.

• Months-of-supply is above pre-pandemic levels.

• The median price is up 1.2% YoY, and with the increases in inventory, some regional areas will see further price declines - and we might see national price declines sometime in 2026.

The median price is up 1.2% YoY, and with the increases in inventory, some regional areas will see further price declines - and we might see national price declines sometime in 2026.

Sales averaged close to 5.42 million SAAR for the month of November in the 2017-2019 period. So, sales are about 24% below pre-pandemic levels.
...
In November, sales in these markets were down 6.5% YoY. Last month, in October, these same markets were up 2.3% year-over-year Not Seasonally Adjusted (NSA). The NAR reported sales were down 7.0% YoY in November, very close to this market sample.

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 was more than the change in NSA data (there are other seasonal factors).
...
More local data coming in January for activity in December!

There is much more in the article.

From the Fed: Industrial Production and Capacity Utilization

This release includes preliminary estimates for industrial production (IP) and capacity utilization for both October and November as well as revised estimates for May through September. IP rose 0.2 percent in November after ticking down 0.1 percent in October. On average, IP rose 0.1 percent per month across October and November, the same as the rate of increase in September and a somewhat slower average pace than the past 12 months. Manufacturing output was flat in November after dropping 0.4 percent in October. There were swings in both mining and utilities output over October and November, though, on net, both sectors posted gains. At 101.8 percent of its 2017 average, total IP in November was 2.5 percent above its year-earlier level. Capacity utilization was 76.0 percent in November, a rate that is 3.5 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 76.0% is 3.5% below the average from 1972 to 2023.  This was close to 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 101.8. This is at the pre-pandemic level.

Industrial production was close to consensus expectations.

From the BEA: Gross Domestic Product, 3rd Quarter 2025 (Initial Estimate) and Corporate Profits (Preliminary)

Real gross domestic product (GDP) increased at an annual rate of 4.3 percent in the third quarter of 2025 (July, August, and September), according to the initial estimate released by the U.S. Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent.

Due to the recent government shutdown, this initial report for the third quarter of 2025 replaces the release of the advance estimate originally scheduled for October 30 and the second estimate originally scheduled for November 26.br />
The increase in real GDP in the third quarter reflected increases in consumer spending, exports, and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased. ...

Compared to the second quarter, the acceleration in real GDP in the third quarter reflected a smaller decrease in investment, an acceleration in consumer spending, and upturns in exports and government spending. Imports decreased less in the third quarter.

Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 3.0 percent in the third quarter, compared with an increase of 2.9 percent in the second quarter.

The price index for gross domestic purchases increased 3.4 percent in the third quarter, compared with an increase of 2.0 percent in the second quarter. The personal consumption expenditures (PCE) price index increased 2.8 percent, compared with an increase of 2.1 percent. Excluding food and energy prices, the PCE price index increased 2.9 percent, compared with an increase of 2.6 percent.
emphasis added

PCE increased at a 3.5% annual rate, and residential investment decreased at a 5.1% rate. The initial Q3 GDP report, with 4.3% annualized increase, was above expectations.

From Matthew Graham at Mortgage News Daily: Mortgage Rates Hold Steady to Start Holiday-Shortened Week

Mortgage rates are tied to movement in the bond market and bonds were close enough to Friday's levels that mortgage rates were essentially unchanged today. This keeps the average lender in the lower portion of the narrow range seen over the past 4 months. [30 year fixed 6.24%]
emphasis added

Tuesday:
• At 8:30 AM ET, Durable Goods Orders for November.  The consensus is for a 0.4% increase.

• Also at 8:30 AM: Gross Domestic Product, 3rd Quarter 2025 (Initial Estimate) and Corporate Profits (Preliminary). The consensus is that real GDP increased 3.2% annualized in Q3, down from 3.8% in Q2.
• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for October. The consensus is for a 0.1% increase in Industrial Production, and for Capacity Utilization to be unchanged at 75.9%.

• At 10:00 AM, Richmond Fed Survey of Manufacturing Activity for December.

Today, in the CalculatedRisk Real Estate Newsletter: Question #10 for 2026: Will inventory increase further in 2026?

Excerpt:

Earlier I posted some questions on my blog for next year: Ten Economic Questions for 2026. Some of these questions concern real estate (inventory, house prices, housing starts, new home sales), and I’ll post thoughts on those in this newsletter (others like GDP and employment will be on my blog).

I'm adding some thoughts, and maybe some predictions for each question.

Here is a review of the Ten Economic Questions for 2025.

10) Housing Inventory: Housing inventory decreased sharply during the pandemic to record lows in early 2022. Since then, inventory has increased but is still below pre-pandemic levels. Will inventory increase further in 2026?

First, a brief history. Here are a few times when watching existing home inventory helped my analysis.

Starting in January 2005, I was very bearish on housing, but I wasn’t sure when the market would turn. Speculative bubbles can go on and on. However, the increase in existing home inventory in late 2005 (see red arrow on graph below) helped me call the top for house prices in 2006.

There is much more in the article.

Altos reports that active single-family inventory was down 2.3% week-over-week.  Inventory usually 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 13.5% compared to the same week in 2024 (last week it was up 13.7%), and down 5.7% compared to the same week in 2019 (last week it was down 5.6%). 
Inventory started 2025 down 22% compared to 2019.  Inventory has closed most of that gap, however inventory will still be below 2019 levels at the end of 2025.
This second inventory graph is courtesy of Altos Research.
As of December 19th, inventory was at 758 thousand (7-day average), compared to 775 thousand the prior week.  
Mike Simonsen discusses this data and much more regularly on YouTube

Weekend:
• Schedule for Week of December 21, 2025

• Ten Economic Questions for 2026

Monday:
• At 8:30 AM ET, Chicago Fed National Activity Index for November. This is a composite index of other data.
From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 21 and DOW futures are up 100 (fair value).

Oil prices were down over the last week with WTI futures at $56.79 per barrel and Brent at $60.76 per barrel. A year ago, WTI was at $70, and Brent was at $73 - so WTI oil prices are down about 19% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.80 per gallon. A year ago, prices were at $3.01 per gallon, so gasoline prices are down $0.21 year-over-year.

Here is a review of the Ten Economic Questions for 2025.

Below are my ten questions for 2026 (I've been doing this online every year for 21 years!).  These are just questions; I'll follow up with some thoughts on each of these questions.

The purpose of these questions is to provide a framework of how the U.S. economy will likely perform in 2026, and if there are surprises - like in 2020 with the pandemic - to adjust my thinking.  1) Economic growth: Economic growth was probably close to 2% Q4-over-Q4 in 2025.  The FOMC is expecting growth of 2.1% to 2.5% Q4-over-Q4 in 2026. How much will the economy grow in 2026?  Will there be a recession in 2026?
2) Employment: Through November 2025, the economy added 610 thousand jobs in 2025.   How many jobs will be added in 2026?  Or will the economy lose jobs? 
3) Unemployment Rate: The unemployment rate was at 4.6% in November, up from 4.2% in November 2024.   Currently the FOMC is projecting the unemployment rate will decrease to the 4.3% to 4.4% range in Q4 2026.  What will the unemployment rate be in December 2026?

4) Participation Rate: In November 2025, the overall participation rate was at 62.5%, unchanged year-over-year from 62.5% in November 2024, and below the pre-pandemic level of 63.3% in February 2020.   Long term, the BLS is projecting the overall participation rate will decline to 61.1% by 2034 due to demographics.  What will the participation rate be in December 2026?

5) Inflation: Core PCE was up 2.8% YoY through September. This was down from a peak of 5.6% in early 2022.  The FOMC is forecasting the YoY change in core PCE will be in the 2.4% to 2.6% range in Q4 2025. Will the core inflation rate decrease further in 2026, and what will the YoY core inflation rate be in December 2026? 

6) Monetary Policy:  The FOMC cut the federal funds rate three times in 2025 from "4-1/4 to 4-1/2 percent" at the beginning of 2025, to "3-1/2 to 3-3/4" at the end of the year. The mid-point on the "dot plot" suggests many FOMC participants expect around two 25 bp rate cuts in 2026.  What will the Fed Funds rate be in December 2026?

7) Wage Growth: Wage growth was decemt in 2025, up 3.5% year-over-year as of November.  How much will wages increase in 2026?

8) Residential Investment: How much will Residential investment (RI)  change in 2026?  How about housing starts and new home sales in 2025?

9) House Prices: It appears house prices - as measured by the national repeat sales index (Case-Shiller, FHFA, and Freddie Mac) - will be mostly flat in 2025.  What will happen with house prices in 2026?

10) Housing Inventory: Housing inventory decreased sharply during the pandemic to record lows in early 2022.  Since then, inventory has increased but is still below pre-pandemic levels.  Will inventory increase further in 2026?

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• NAR: Existing-Home Sales Increased to 4.13 million SAAR in November

• Lawler: Another Strange NAR Reading on Northeast Median Sales Prices

• Lawler: Early Read on Existing Home Sales in November and Update on Mortgage/MBS Yields and Spreads

• Part 1: Current State of the Housing Market; Overview for mid-December 2025

• Part 2: Current State of the Housing Market; Overview for mid-December 2025

• 3rd Look at Local Housing Markets in November

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

Happy Holidays and Merry Christmas!

Special Note: There is still uncertainty on when some economic reports will be released. For example, we are still missing housing starts and new home sales for September, October and November.
The key economic report this week is Q3 GDP.

----- Monday, December 22nd -----
8:30 AM: Chicago Fed National Activity Index for November. This is a composite index of other data.

----- Tuesday, December 23rd -----
8:30 AM: Durable Goods Orders for November.  The consensus is for a 0.4% increase.

8:30 AM: Gross Domestic Product, 3rd Quarter 2025 (Initial Estimate) and Corporate Profits (Preliminary). The consensus is that real GDP increased 3.2% annualized in Q3, down from 3.8% in Q2.
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 a 0.1% increase in Industrial Production, and for Capacity Utilization to be unchanged at 75.9%.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for December.


----- Wednesday, December 24th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 225,000 initial claims, up from 224,000 last week.

The NYSE and the NASDAQ will close early at 1:00 PM ET.

----- Thursday, December 25th -----
All US markets will be closed in observance of the Christmas Holiday.

----- Friday, December 26th -----
No major economic releases scheduled.

Today, in the CalculatedRisk Real Estate Newsletter: Lawler: Another Strange NAR Reading on Northeast Median Sales Prices

Excerpt:

While today’s existing homes sales report from the National Association of Realtors didn’t contain many surprises, an exception was in the reported median existing home sales prices. The NAR report showed that the median existing home sales price (total and single-family) in November was up just 1.2% from a year earlier, well below both consensus and what local realtor/MLS data would have suggested. The source of this surprise was in the Northeast, where the NAR’s median existing home sales price estimate was up just 1.1% from last November, and the median existing single-family home sales price estimate was up only 0.9% YOY. Such an anemic gain was completely inconsistent with state realtor data from the Northeast, as the table below shows.

There is much more in the article.