MBA Mortgage Purchase Application Down -3.7% As Mortgage Rates Rise

MBA Mortgage Purchase Index down -3.7% over the past week after climbing +1.2% in prior week…30y mortgage rate rose to +6.45% up from +6.37% and highest in a month.

With the Federal government playing an outsized role in the housing and mortgage markets, the Federal goverment is like an enormous Mantis Shrimp.

New Home Sales Rise In March Despite Rising Mortgage Rates

High home prices show signs of cooling, mortgage rates remain fairly constant, while new home sales increase by 47k in March. Despite rising mortgage rates.

The bigger picture? New home sales remain relatively depressed after the Covid outbreak in 2020.

US Debt To GDP Ratio At 1.22 (Nothing Has Been The Same Since 2020 Covid Outbreak)

It used to be that a debt-to-GDP (Gross Domestic Product) ratio above 1.0 would be disastrous. Yet, the US Debt-to-GDP ratio rises during and after most recessions. Why? The old Keynesian model called for increased government spending and debt to pull the country out of a recession. But the Keynesian model called for debt to be repaind after the recession ended. But after most recessions, the Federal government keeps spending and borrowing. Following the Covid outbreak of 2020, the US debt-to-GDP ratio exceeded 1.0 and has remained fairly constant since.

As of today, the US Federal debt load is $39.204 trillion while GDP is $32.090 trillion resulting in a debt-to-GDP ratio of 1.22.

The leader in the debt-to-GDP race is … Sudan! Followed by Japan and Singapore.

As lowest debt-to-GDP ratio nations are energy-rich Brunei (2.3%) and Kuwait (3%).

Mortgage Employment Headcount Lowest Since Housing Bubble Of 2005 As Case-Shiller National Home Price Index UP 0.29% In February (Denver Leads In Price Declines Beating Tampa)

Home values in Denver are falling faster than any other major metro area tracked by a key index, earning the Mile High City a dubious distinction as the weakest housing market in the nation.

More than half of major U.S. metropolitan areas posted year-over-year home price declines in February, with Denver (-2.2%) displacing Tampa (-2.1%) as the weakest market, according to data from the S&P Cotality Case-Shiller Index released Tuesday.

Los Angeles (-0.8%) and Washington, DC (-0.1%) also joined the list of markets with falling home values, signaling weakness that expanding out of the long-suffering Sunbelt region.

kkk

Mortgage employee headcount has fallen to lowest level since the housing bubble and mortgage crisis of 2005-2008.

Home Prices Rise 0.9% YoY Despite Lower Mortgage Rates (Blue City Mean Reversion, New York 4.9% YoY Gain, Chicago 4.6% YoY, Cleveland 3.6% YoY While Tampa -2.5%)

We are seeing mean reversion in home prices in red cities and blue cities.

The price of homes in America’s to 20 cities rose just 0.16% MoM in January (the lowest MoM rise since August and well below the 0.35% MoM expected.

Source: Bloomberg

Home prices rose 0.9% YoY as mortgage rates have fallen. Home prices are still too high.

New York leads with a 4.9% annual gain, followed by Chicago at 4.6% and Cleveland at 3.6%, while Tampa fell 2.5%…

Don’t be confused. This isn’t leftists running to blue cities. It is mean reversion. The prior fleeing blue cities to red cities created a mean reversion effect where red cities home prices rose too fast and blue cities fell too fast.

Little Rock?

Seller’s Market In Housing! There Are 630,000 More Home Sellers Than Buyers—the Biggest Gap on Record (50% More Sellers Than Buyers)

Nothing has been the same in the US housing market since the Covid outbreak of 2020. According to Redfin, there are nearly 50% more home sellers than buyers.

And the number of homebuyers has fallen to historic lows.

A good reason there are so few buyers is that home prices has soared after the Federal government’s spending spree after Covid.

Prayers for the soul of Noelia Castillo Ramos, murdered by the Spanish government. For being gangrape TWICE by immigrants then attempted suicide.

US New Home Sales Decline By Most In 13 Years In January (Home Prices Remain Too High After Covid Spending Spree)

Despite falling mortgage rates, analysts expected December’s drop in new home sales to accelerate in January… and accelerate they did… crashing a stunning 17.6% MoM (-2.7% MoM exp) – the biggest MoM drop since July 2013.

This huge MoM drop dragged sales down 11.3% YoY – the worst slide in three years.

Source: Bloomberg

This huge drop dragged the new home sales SAAR down to its lowest since 2022, catching down to existing and pending sales…

Inventories are up (Houses for sale in Jan. rose 0.4% m/m to 476,000), prices are down (Median down 6.8% YoY at $400k – lowest since 2024)…

…and remember these deals were signed in January – meaning this is not mortgage related (some suggesting weather impact – Northeast sales down 44.7% MoM, MidWest -33.9% MoM, but the scale is immense).

Moral of the story: US home prices are too high for millions of households to afford.

Hot, Hot, Hot! Producer Prices Print At 0.7% MoM, 3.4% YoY In February (Hottest Since Jan 2025) What Will Powell And Fed Do?

Producer prices are hot, hot, hot!

Producer prices were higher by 3.4% YoY (notably hitter than the 3.0% expected and up from the 2.9% prior). That is the hottest PPI since January 2025

Source: Bloomberg

More than half of the February rise in prices for final demand can be attributed to a 0.5-percent advance in the index for final demand services. Prices for final demand goods increased 1.1 percent.

Core PPI (ex Food and Energy) also soared (+0.5% MoM) pushing core prices up by 3.9% YoY – the highest since Jan 2025.

Source: Bloomberg

What will Powell and The Fed do??

US Pending Home Sales Rise 1.8% MoM In February, But The South Saw 2.7% MoM Increase (What I Like About The South)

What I like about the South.

US pending home sales bounced modestly in February (up 1.8% MoM vs -0.6% MoM exp and -10.% MoM prior).

Year-over-year home sales continue to decline (down 0.6% YoY).

Source: Bloomberg

Pending home sales in the South, the biggest home-selling region in the country, increased 2.7%.

They rose 4.6% in the Midwest and edged up in the West.

US Home Relistings Hit Record High (Delistings Soared In 2025 After Sellers Outnumbered Buyers)

Housing market woes continue. All the day and all the night.

Around 45,000 homes that were delisted in 2025 were back on the market in January – marking the highest relisting numbers since 2016 when Redfin began tracking.

Delistings soared in 2025 after sellers began to outnumber buyers, and decided to take their homes off the market to take another bite at the apple this spring. Overall delistings hit a record high of 112,788 in December, while relistings this year represented 3.6% of all homes on the market.

Supply gains have been concentrated in the South and West, particularly among homes priced under $500,000. While the Northeast and Midwest have seen some growth, they are still lagging behind the other regions.

As of February, active listings climbed by 7.9 percent year over year, reaching 914,860 homes across the nation for sale. A little more than 7 percent of those listings resulted in contract cancellations—down slightly from the same time in 2025.

An analysis of the country’s 50 largest markets showed sharp increases in inventory in Seattle, with a 38.5 percent hike, as well as Louisville, Kentucky, 27.3 percent higher, and San Jose, with nearly 25 percent more homes on the market.

On the other side, Hartford, Connecticut, experienced the deepest drop in inventory at over 82 percent, as well as Providence, Rhode Island, at 61.1 percent.

Overall, homes spent a median of 70 days on the market in February, four days longer than a year earlier.