The September drop in mortgage rates is sparking the biggest boom in refinancings since the pandemic. Mortgage-refinancing applications have surged above the decade average, despite that period including the record-breaking refi boom of 2020-21 when rates fell to all-time lows. Purchase-loan demand has also rebounded to its best for this time of year since 2022, yet remains well below pre-pandemic levels.
Can we ask the US House and Senate if they will ever return US Federal government spending to pre-Covid levels? Both US Federal government spending and public debt are up 56% since the Covid outbreak in 2020.
The answer is no. Politicians thrive on Federal spending.
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2025 is 3.9 percent on September 26, up from 3.3 percent on September 17. After recent releases from the US Census Bureau, the US Bureau of Economic Analysis, and the National Association of Realtors, a decrease in the nowcast of third-quarter real gross private domestic investment growth from 6.4 percent to 4.1 percent was more than offset by increases in the nowcast of third-quarter real personal consumption expenditures growth from 2.7 percent to 3.4 percent and the nowcast of the contribution of net exports to third-quarter real GDP growth from 0.08 percentage points to 0.58 percentage points.
Existing home sales helped drive higher GDP growth.
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 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:
Single-family 890K SAAR, down 7.0% from 957K in July and the lowest since July 2024
Multi-family 403K SAAR, down 11% from 453K in July and the lowest since May.
Housing permits?
Single-family 856K SAAR, down 2.2% from 875K in July and the lowest since March 2023
Multi-family 403K SAAR, down 6.7% from 432K in July and the lowest since May 2024
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.”
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.
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.
Each year, CES employment estimates are benchmarked to comprehensive counts of employment from the Quarterly Census of Employment and Wages (QCEW). These counts are derived primarily from state unemployment insurance (UI) tax records that nearly all employers are required to file with state workforce agencies.
Here is the breakdown:
Wow. Every month during Biden’s last year in his reign of error was a negative revision.
The good news? The US 30-year mortgage rate fell slightly to 6.64%.
The bad news? It seems to be a milder repeat of the Ford/Carter years of the late 1970s/early 1980s. Rising 10-year Treasury yields and 30-year mortgage rates during the Ford/Carter years … and early Reagan years. The difference? The Federal Reserve is fundamentally different today than previously. With Bernanke/Yellen, The Fed became more “activist” (like Obama/Biden-appoointed District Judges). Powell is returning to the Yellen model of Fed activism … not doing much.
Now the market awaits a rate cut from The Fed at the next FOMC meeting. But 30-year mortgage rates are most closely related to the 10-year Treasury yield than the short-term Fed Funds rate. Theoretically, The Fed could cut their target rate by 25 basis points and mortgage rates could be uneffected. Or even rise.
According to the US Census Bureau, New Home Sales of new single-family houses in July 2025 were at a seasonally-adjusted annual rate of 652,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.6 percent (±15.5 percent)* below the June 2025 rate of 656,000, and is 8.2 percent (±14.0 percent)* below the July 2024 rate of 710,000.
Median and Average Sales Price
The median sales price of new houses sold in July 2025 was $403,800. This is 0.8 percent (±5.9 percent)* below the June 2025 price of $407,200, and is 5.9 percent (±8.5 percent)* below the July 2024 price of $429,000. The average sales price of new houses sold in July 2025 was $487,300. This is 3.6 percent (±8.0 percent)* below the June 2025 price of $505,300, and is 5.0 percent (±8.6 percent)* below the July 2024 price of $513,200.
Here is a chart of median sales price of new homes against Fed money printing (M2).
Confounded Interest - Anthony B. Sanders 
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