The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2025 is 2.5 percent on August 7, unchanged from August 5 after rounding. After this morning’s wholesale trade report from the US Census Bureau, the nowcast of the contribution of inventory investment to third-quarter real GDP growth increased from 0.76 percentage points to 0.82 percentage points.
Federal spending, elevated with the outbreak of Covid in 2020 remains higher than pre-Covid levels as does M2 Money printing.
The Fed didn’t try, but mortgage rates fell and mortgage applications rose 10.9% week-over-week.
Mortgage applications increased 10.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 8, 2025.
The Market Composite Index, a measure of mortgage loan application volume, increased 10.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 10 percent compared with the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 17 percent higher than the same week one year ago.
The Refinance Index increased 23 percent from the previous week and was 8 percent higher than the same week one year ago.
The 30-year fixed mortgage rate declined to 6.67 percent last week,which spurred the strongest week for refinance activity since April. Borrowers responded favorably, as refinance applications increased 23 percent, driven mostly by conventional and VA applications. Refinances accounted for 46.5 percent of applications and as seen in other recent refinance bursts, the average loan size grew significantly to $366,400. Borrowers with larger loan sizes continue to be more sensitive to rate movements.
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).
They can’t accuse Fed Chair Jerome Powell of trying too hard to help Donald Trump. Mortgage rates moved lower last week, following declining Treasury yields as economic data releases signaled a weakening U.S. economy. As a result, the 30-year fixed rate decreased for the third straight week to 6.77 percent. As a result …
The Market Composite Index, a measure of mortgage loan application volume, increased 3.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 18 percent higher than the same week one year ago.
The Refinance Index increased 5 percent from the previous week and was 18 percent higher than the same week one year ago.
And the number of sellers in the housing market is greatly outweighing the number of buyers.
Mortgage and housing economists should breathe a sigh of relief that Bidenomics is over, but I doubt it they will.
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.
Confounded Interest - Anthony B. Sanders 
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