Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
US existing home sales dropped 2.7% MoM (vs -0.7% MoM expected) in June leaving existing home sales unchanged year-over-year.
The median sales price increased 2% in June from a year ago to a record high of $435,300.
Meanwhile, The Fed keeps on printing money.
This is a new world for housing and mortgage finance. Outrageous, unafforable housing for millions.
Keep on printing is the song of The Federal Reserve. But its the same all over the world as global central banks are printing zads of money too.
Bitcoin keeps on growing in price as global M2 Money supply keeps on growing.
And the same is true for ethereum. It keeps growing as M2 Money keeps growing.
It is another example of government gone wild!
Thank goodness “Statist Joe” Biden is gone. Kamala Harris is still lingering around the edges, while the mortgage and housing markets are still suffering from the Biden/Harris regulatory overreach.
Mortgage applications increased 9.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 4, 2025. Last week’s results included an adjustment for the July 4th holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 9.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 13 percent compared with the previous week. The seasonally adjusted Purchase Index increased 9 percent from one week earlier. The unadjusted Purchase Index decreased 13 percent compared with the previous week and was 25 percent higher than the same week one year ago.
The Refinance Index increased 9 percent from the previous week and was 56 percent higher than the same week one year ago.
Mortgage rates moved lower last week, with the 30-year fixed rate decreasing to 6.77 percent, its lowest level in three months. After adjusting for the July 4th holiday, purchase applications increased to the highest level of activity since February 2023 and remained above year-ago levels.
Biden claims the foreign leaders have been calling him for advice. Here is one example.
Covid, the gift that keeps on giving. Government spending grew enormously with Covid in 2020. As a result, M2 Money has grown 34% just since 2020.
At least M2 Velocity is growing again.
Finally, US government debt growth (YoY) was approximately equal to US nominal GDP growth in Q1 2025.
Unfortunately, the BBB (Big Beautiful Bill) is projected to add $3.9 trillion of debt. Unfortunately, there are insufficient spending cuts in the BBB. And the Senate just nixed kicking illegal immigrants off of Federal healthcare programs.
Unfortunately, GDP growth is only expected to be modest with debt growth once again rising faster than GDP growth. As Diane Feinstein once said, politicians are elected to spend money. This, of course, was a ridiculous statement embraced by spend-crazy Democrats and RINOs.
So, Congress has committed American taxpayers to debt slavery.
I sure hope this isn’t a repeat of the financial crisis! But new homes for sale have ballooned to financial crisis levels.
Home sales have dropped below year-ago levels, presaging likely declines in mortgage supply and turnover. With completed-home inventories hitting post-global financial crisis (GFC) highs, regional surpluses are emerging as key home-price factors, setting the stage for widening pockets of price weakness in the months ahead.
Contributing to the glut of new homes for sale is the rising prices AND higher mortgage rates.
The US Treasury yield curve is flattening at the short-end (2-3 years) but remains unchanged at the long end (>= 20 years).
And pending US Home Sales remain low.
It will take a while to recover from Biden’s horrid economic follicies.
New home sales are going down.
New home sales plunged in May, the biggest MoM drop since June 2022.
The median sales price increased 3% from a year ago to $426,600 last month, marking the first year-over-year price gain in 2025.
The plunge in new home sales came as mortgage rates ticked back higher.
Another example of the carnage left behind by President Autopen (Joe Biden).
Fed Chair Jerome Powell’s favorite song: “No sugar tonight” for the mortgage market. The Fed provided plenty of sugar during the Covid crisis of 2020.
Mortgage rates grew under Biden from under 3% to nearly 8%, helping to choke off housing demand.
The good news? Median home price growth YoY has been negative since 2023 whilr average hourly earnings YoY has been positive and steady.
Please Jerome, lower rates!! We are in a ring of fire with high housing prices and high mortgage rates.
All aboard! The crazy mortgage train! Home prices rose 39% under Biden while mortgage originations at large banks fell -61%. The mortgage market is still recovering from Bidenomics!
Mortgage applications decreased 2.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 13, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 2.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 14 percent higher than the same week one year ago.
The Refinance Index decreased 2 percent from the previous week and was 25 percent higher than the same week one year ago.
Home prices rose 39% under Biden while mortgage originations at large banks fell -61%.
Confounded Interest - Anthony B. Sanders 
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