The Federal Reserve (aka, The Green Slime) represents the Spirit of Washington DC. A glutenous pig spending trillions it doesn’t have on insane policies. And The Fed ends up funding the insane spending and racking up massive losses.
Trump is inheriting a Federal Reserve w/ not only unprecedented losses of $218 billion, but it’s still losing money; the Fed won’t send the Treasury a dime for the entirety of Trump’s term; that’s never happened since the inception of the Fed – another challenge for Trump.
No, Freddie Mac is not a new cheeseburger from McDonald’s. Freddie Mac is a government sponsored enterprised (GSE) that purchases residential mortgages from lenders and assists in the bundling of mortgages into mortgage-backed securities (MBS). They also monitor home prices.
Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.54% month-over-month on a seasonally adjusted (SA) basis in December. On a year-over-year basis, the National FMHPI was up 4.0% in December, up from up 3.9% YoY in November. The YoY increase peaked at 19.0% in July 2021, and for this cycle, bottomed at up 0.9% YoY in May 2023.
But let’s look at the dark side of home prices, which is price declines. Led by Communist enclaved Austin Texas, down -12.7% from peak. The next six cities are all in Florida.
This is the lowest December print since records began (in 2000).
Let’s see if Trump can loosen up regulations on mortgage lending and housing. Hopefully, the new HUD Secretary (Scott Turner) will be an upgrade over DofHealth’s Rachel Levine.
Wow. Money printing by The Federal Reserve went will after the Covid outbreak in early 2020. So did Federal spending. Unfortunately, politicians are addicted to Federal spending. And Senators like Chuck Schumer (D-NY) and Adam Schiff (D-CA) are trying to obstruct any spending cuts by Trump and his DOGE.
Well, M1 Money printing is UP 365% since Covid while M2 Money printing is UP 40%.
Federal current expenditures are up 45% since the Covid outbreak. But were never returned to normal spending levels.
New York senator Chuck Schumer is opposed to Trump’s efforts to cut Federal spending. Is Senator Schumer REALLY the political boss of Tammany Hall, the Democratic Party’s political machine that played a major role in the politics of 19th-century New York City and State?
One reason that US home prices remain high (and unaffordable for many) is The Federal Reserve (aka, The Green Slime). Former Fed Chair (and Biden’s Treasury Secretary is no Luciana Paluzzi, the Italian beauty from the James Bond film Thunderball. Yellen is just a far-left economic hack.
Look at the Case-Shiller national home price index compared with The Fed funds target rate.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 3.8% annual return for November, up from a 3.6% annual gain in the previous month. The 10-City Composite saw an annual increase of 4.9%, recording the same annual increase in the previous month. The 20-City Composite posted a year-over-year increase of 4.3%, up from a 4.2% increase in the previous month. New York again reported the highest annual gain among the 20 cities with a 7.3% increase in November, followed by Chicago and Washington with annual increases of 6.2% and 5.9%, respectively. Tampa posted the lowest return, falling 0.4%.
The pre-seasonally adjusted U.S. National, 20-City, and 10-City Composite Indices’ upward trends continued to reverse in November, with a -0.1% drop for the national index, while the 20-City Composite saw a -0.1% decline and the 10-City Composite was unchanged.
While the Fed Funds target rate gyrates, The Fed’s balance sheet remains high.
Sales of new US homes ended 2024 on a high note in December as customers took advantage of incentives from builders, leading to a second straight year of increased purchases.
For the full year, customers purchased 683,000 homes, up about 2.5% from 2023’s total.
Sales of new single-family houses in December 2024 were at a seasonally adjusted annual rate of 698,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.6 percent above the revised November rate of 674,000 and is 6.7 percent above the December 2023 estimate of 654,000.
US Existing Home Sales rose for the third straight month in December (longest streak since late 2021), rising 2.2% MoM and up 9.3% YoY – the best annual shift since June 2021. However, despite the last rebound, for all of 2024, sales reached the lowest since 1995, when the US had about 70 million fewer people.
And with the lowest existing home sales since 1995, we have mortgage purchase applications at the lowest level since 1995.
Why? The median price of EHS has exploded under Biden.
Mortgage rates are hovering around 7%, same as around 1995.
Mortgage applications decreased 3.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 3, 2025. This week’s results include an adjustment for the New Year’s holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 3.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 47 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier. The unadjusted Purchase Index increased 43 percent compared with the previous week and was 15 percent lower than the same week one year ago.
Purchase application activity is up about 2% from the lows in late October 2023 and is now 15% below the lowest levels during the housing bust.
The Refinance Index increased 2 percent from the previous week and was 6 percent lower than the same week one year ago.
Was Freddie King correct? Is the US economy going down??
The US Treasury yield curve (10Y-2Y) has inverted to the positive side after a prolonged NEGATIVE inversion (from July 6, 2022 to Sept 5, 2024) marking the longest period of negative inversion since August 18, 1978 – May 1, 1980. Each negative inversion was followed by a recession.
The UST 10Y-3M yield curve tells a similar tale. The 10Y-3M curve inverts prior to recessions but goes positive just prior to recessions.
Yes, if the yield curve is a good predictor of recession, the US economy is going down.
Freddie King is playing a Gibson ES-355TDC guitar.
Existing-home sales have finally started to improve on a seasonally adjusted basis after a three-year decline.
Cause? Raging home prices combined with higher than normal mortgage rates. Home prices are up 35.4% under Biden while conforming 30Y mortgage rates are up 148%.
Confounded Interest - Anthony B. Sanders 
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