Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
In addition to soaring sellers to buyers ratio in US housing markets, we now have surging mortgage default risk (CDR) after mortgage rate resets.
Did Powell and The Fed (aka, Jay Powell and the Blackhearts) wait too long to cut rates?
Here is the soaring ratio of home sellers to buyers. OOOGG!!!
August represents a massive switch from 3 years ago when there were nearly 40% more home buyers and sellers in the US housing market. There are now 35.2% MORE home sellers than buyers!
It’s Friday and the US Treasury yield curve is rising/steepening at the 10-year tenor.
As of yesterday, the 30-year mortgage rate fell to 6.17%
Thanks in part to Funky Cold Jerome!
Fed Chair Jerome Powell is the God of Hellfire! We should always wait a day to digest Fed’s annoucements since they often make little sense. For example, yesterday the 10Y yield fell below 4% after The Fed’s announcement … then promplty rose above 4% again. And today, the US Treasury 10Y yield rose to 4.1276%
The 30Y US mortgage rate fell to 6.493%.
How about the US Dollar? Similar to the US 10Y yield, volatility reigned following Powell’s muddled message.
Powell rarely is straightforward and never puts cash on the barrelhead.
Well, The Fed cut their target rate by 25 basis points.
Following The Fed’s 25 bp cuts, the 10Y yield fell below 4% to 3.9879%.
The Fed Dots??
We shall see tomorrow if mortgage rates fall.
Of course, as soon as I posted this, US Treasury 10Y yields surged. This often happens with The Fed’s incompetent messaging.
It will take a while to recover from Biden’s “Reign of Error.” According the US Census Bureau, housing starts are 6.0 percent below the August 2024 rate.
Housing starts:
Housing permits?
Let’s see if Powell and The Gang drop rates 25 or 50 basis points at today’s FOMC meeting.
Between The Fed’s persistent policy errors and Biden’s centralized mismanagement of the economy, Biden’s Maladministration is the epitome of a “Reign of Error.”
Under The Federal Reserve, the purchasing power of the US Dollar has declined -97% since the establishment of The Federal Reserve in 1913. It is the House of the Dying Dollar.
Under The Federal Reserve, the purchasing power of the US Dollar has declined -97% since the establishment of The Federal Reserve in 1913.
Of course, Trump II is only 9 months old and Biden had 4 long years to destroy the dollar.
US housing is simply unaffordable!
Mortgage rates remain elevated since the Biden Administration took control in 2021. Although under Trump, the rise in the 30-year mortgage rate has slowed. But the 30-year mortgage rate is up 126% since the beginning of 2021 and the “Joe The Boss” Biden administration.
Mortgage originations at large banks declined a whopping 74% under “Joe The Boss” Biden.
Between mortgage rates rising by 126% and house prices rising by 41.5% under “Joe The Boss” Biden.
US housing is simply unaffordable.
Guiseppe “Joe The Boss” Biden.
Actually, this is a photo of Guiseppe “Joe The Boss” Masseria. A New York crime boss assassinated by Lucky Luciano in 1931.
According to the Bureau of Labor Statistics (BLS), headline inflation rose 0.4% MoM and 2.9% YoY in August.
Shelter (housing) is up 3.6% YoY. Gimme (expensive) shelter!
Of course, Federal government spending is the source of inflation. Notice the lag between Covid spending and resulting inflation.
So much for Trump Tariffs causing runaway inflation.
Prayers for Charlie Kirk and his family. I hope they catch the sick SOB that assassinated Charlie.
Stay with the mortgage market! It is improving under Trump after a disastrous run under Biden.
But for last week, mortgage applications increased 9.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 5, 2025. This week’s results include an adjustment for the Labor Day holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 9.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The seasonally adjusted Purchase Index increased 7 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 23 percent higher than the same week one year ago.
The Refinance Index increased 12 percent from the previous week and was 34 percent higher than the same week one year ago.
The holiday-adjusted refinance index had its strongest week in a year and the average loan size for refinances also increased significantly, since borrowers with large loans are more sensitive to bigger rate moves. Refinance applications accounted for almost 49 percent of all applications last week.
…
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.49 percent from 6.64 percent, with points decreasing to 0.56 from 0.59 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
Confounded Interest - Anthony B. Sanders 
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