The latest inflation report continues to show no negative impact from tariffs. Core goods prices were up 0.2% in July. They are up just 1.1% over the past 12 months and are actually up a lesser 0.8% since President Trump began phasing in tariffs.
Business applications are booming under Trump’s economy.
While consumer prices are calm (2.7% YoY).
Shelter inflation is higher than the average price increase (3.7% YoY).
The US housing market is finally slowing down in terms of price growth. But this is after 3 Federal government-fueled house price bubbles.
In addition to record-high housing prices, mortgage rates are higher than levels going back to 2006.
Throw in the “woke” movement, and we have a problem. The percentage of 30-year-olds who are both married and homeowners has plummeted to the lowest level since 1950.
Simply lowering interest rates won’t fix this problem. Much of the housing “crisis” is due to local and state level politicians and their restrictive housing policies. Like LA Mayor Karen “Venceremos Brigade” Bass allocating the burnt-down Pacific Palisades area on the Pacific Ocean to “affordable housing.”
The July jobs reports for the US revealed some interesting factoids, such as the BLS Commissioner, Erika McEntarfer, being fired. Note that McEntarfer was BLS Commissioner since January 29, 2024. But under McEntarfer, downward revisions were the norm except for election season (Oct 2024 – Dec 2024) when there were upward revisions. But once Trump was elected and took office, all jobs report revisions were negative.
Native born workers rose while foreign born workers declined.
And for the 6th straight month, Federal jobs declined.
And with the poor jobs report that will surely be revised upwards.
The market is pricing in a rate cut at the 09/17/2025 FOMC meeting.
Yes, the US housing market is in a price bubble. If we compared home price growth with median earnings.
The financial crisis was spawned by a home price bubble where home price growth was faster than median earnings growth (see Bubble 1). After home price growth cooled in 2007-2009, the cycle started again (Bubble 2). But the current bubble (Bubble 3) is related to the Covid outbreak and massive spending binge by Congress (and The Fed). Notice that median earnings dropped (green line) post Covid.
But while we have normalized home price growth and median earnings, the LEVELS are still unaffordable for millions of households.
Poor Bill Pulte (FHFA Director). He has to work with an uncooperative Fed under Foul Powell, and local politivcians like Greasy Gavin Newsom (Democrat Gov of California), JB Pritzker (Democrat Gov on Illinois), Kathy Hocul (Democrat Gov of New York), and the assorted lunatic Mayors like Karen Bass (D, Mayor Los Angeles), Zohran Kwame Mamdani (D, presumptive Mayor New York City), etc.
Mortgage applications decreased 3.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 25, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 3.8 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 6 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 17 percent higher than the same week one year ago.
The Refinance Index decreased 1 percent from the previous week and was 30 percent higher than the same week one year ago.
Between Powell keeping rates high and Biden’s grossly incompetent management, the mortgage market remains in the doldrums.
The Bureau of Econ Analysis reported that the first estimate of Q2 GDP came in at an unexpectedly brisk 3.0%, a complete reversal of the -0.5% decline in Q1.
Personal Consumption added 0.98% to the bottom line GDP, up from 0.31% in Q1.
Fixed Investment came at 0.08%, a big drop from the 1.31%, and perhaps the only concerning point in today’s report: was there really no major data center investments in the second quarter… and if so what are the hyperscalers doing?
The change in private inventories was a big drop, printing at -3.17% in the first estimate, up from 2.59% in the first quarter, and an expected reversal as retailers unloaded all that inventory they piled up ahead of tariffs.
Trade or net exports (exports less imports), came at a whopping 4.99% – the biggest addition to the bottom line GDP number – as imports collapsed and added 5.18% to GDP, a stark reversal to the -4.66% contraction in Q1.
Finally, government added just 0.08% to GDP, a reversal of the 0.10% subtraction in Q1.
So, the BEA reported 3.0% real GDP growth, `the Atlanta Fed’s GDP Now latest estimate was 2.9 percent. Pretty close!
US home prices fell for the 3rd straight month In May. The MoM decrease in the seasonally adjusted (SA) Case-Shiller National Index was at -0.29% (-3.5% annual rate).
China unleashed the Wuhan virus on the globe, Anthony Fauci convinced Congress to binge spend like drunken sailors on Covid prevention and relief. Homes prices soared, mortgage demand sank and nothing has been the same.
Here is a chart of the Case-Shiller national home price index post Covid outbreak and the hysterical overreaction by Congress and the Administration (including Anthony Fauci).
Another example? New home sales are down 6.6% YoY.
Who do we blame? China? Yes. Anthony Fauci? Yes. Congress? Yes.
Confounded Interest - Anthony B. Sanders 
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