CMBS Office Serious Delinquencies At 10.59% As US Treasury Yield Curve Steepens

I’ll feel a whole lot better when CMBS office serious delinquenies get below 10%. But serious delinquencies on office space is currently at 10.59%.

The US Treasury yield curve is steepening.

Office delinquencies are likely to rise in Los Angeles as Governor Newsom sits on his greasy hands as LA burns.

Those Were The Days? Atlanta Fed GDP Q2 Now At 3.8% (Fed Rate Cut Looks Unlikely)

The dismal days of Biden/Harris/Yellen are gone. Although Chuck Schumer, Nancy Pelosi, Hakeem Jeffries and my in-laws are all singing “Those Were The Days.” Of immense government corruption and waste.

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 3.8 percent on June 5, down from 4.6 percent on June 2. After recent releases from the US Census Bureau, the US Bureau of Economic Analysis, and the Institute for Supply Management, the nowcasts of second-quarter real personal consumption expenditures growth and real gross private domestic investment growth decreased from 4.0 percent and 0.5 percent, respectively, to 2.6 percent and -2.2 percent, while the nowcast of the contribution of net exports to annualized second-quarter real GDP growth increased from 1.36 percentage points to 2.01 percentage points.

Here is the breakdown.

The Fed still needs to lower rates by 100 basis points, but that looks unlikely.

Into The Mystic? Mortgage Applications Decrease 3.9% In Latest MBA Weekly Survey (Purchase Apps Drop 15%)

Mortgage applications decreased 3.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 30, 2025. This week’s results included an adjustment for the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 15 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 15 percent compared with the previous week and was 18 percent higher than the same week one year ago.

The Refinance Index decreased 4 percent from the previous week and was 42 percent higher than the same week one year ago.

Most mortgage rates moved lower last week, with the 30-year fixed rate declining to 6.92 percent and staying in the 6.8 to 7 percent range since April.

Biden/Harris/Yellen’s gross economic mismanagement reminds me of the song “Into The Mystic.” Because it requires a mystic to determine WHO was running the Biden/Harris adminstration and using the autopen.

CC Rider? MBS Current Coupon (CC) Spreads Widen From Treasuries, Gold, Silver And Copper UP

CC Rider! 30Y MBC Current Coupon (CC) spreads is widening.

And metals are along for the ride! Gold and silver are soaring!

What about Copper?

Glad All Over! AI Contributes Massive Amount To GDP Growth As Median Home Price Growth Contracts

I am glad all over … because the AI boom is delivering a record contribtion to US GDP.

And US home prices are contracting making housing more affordable.

I don’t care what you did when you lived in Fort Worth, but at least home prices are contracting.

Core PCE Fell In April To Lowest Since April 2021, +2.5% YoY (Fed M2 Money Printing UP 4.3% YoY)

The Fed’s favorite inflation indicator – Core PCE – fell once again in April to its lowest since April 2021 at +2.5% YoY.

And The Fed keeps on printing money!

Supercore inflation is down to -0.023 MoM.

The Fed is thinking that they can help.

Pending Home Sales Remain In The House Latitudes (Homebuilder Confidence At 34)

Its like Joe Biden and his bonehead advisors are still gumming up the housing market. Pending home sales in April remains in the house latitudes.

NAHB home builder confidence remains below 50 at 34.

Is the music over for the housing market? High housing prices, high mortgage rates, restrictive zoning all hinder markets.

30Y Treasury Yield Headed Towards Highest Since 2007 (US Yield Curve Significantly Steeper Than Under Biden)

US 30y bond yields are heading toward their highest level since 2007.

The yield curve has finally normalized!

And significantly steeper in 2025.

Later and shallower rate cuts are being priced.

New Home FHA Mortgage Share Surges As Debt-To-Income Ratios Surge (New-home Loan Sizes Fell To 2021 Levels)

The not shocking news out of DC: The ‘Big, Beautiful Bill’ Will “Massively” Increase Near-Term Deficits, Add $5 Trillion In Debt. The surprising news? New home FHA Mortgage Share has surged!

On the not surprising news front: FHA debt-to-income ratios have surged (the surge started under Biden).

New-home loan sizes have fallen to 2021 levels.

Moody’s Downgrades USA Credit Rating From Aaa (M2 Money UP 40% Since Covid, Public Debt UP 56%, US CDS Down Near Greek Levels!)

Now you know why Trump is so eager to cut wasteful spending! The real mystery is why Democrats and RINOs are so determined to continue wasteful spending and not cut taxes.

Trump inherited a fiscal disaster from Biden and Congress. Not to mention The Federal Reserve. Credit default swaps (CDS) for the USA are near Greece (and China) levels.