Category: Inflation

Keep On Printing? National House Price Index Up 1.4% year-over-year in November As M2 Money Growth Slows

Keep on printing money. It seems that home price growth requires The Fed to keep printing money.

S&P/Case-Shiller released the monthly Home Price Indices for November (“November” is a 3-month average of September, October and November closing prices). September closing prices include some contracts signed in July, so there is a significant lag to this data. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).

From S&P S&P Cotality Case-Shiller Index Reports Annual Gain In November 2025

From S&P S&P Cotality Case-Shiller Index Reports Annual Gain In November 2025

The S&P Cotality Case-Shiller U.S. National Home Price NSA Index posted a 1.4% annual gain for November, in line with the previous month.

Real home values declined as consumer inflation (2.7%) outpaced the National Index gain (1.4%) by 1.3 percentage points.

Regional divergence persisted: Midwestern and Northeastern markets led by Chicago (+5.7%) and New York (+5.0%) posted gains, while Sun Belt cities including Tampa (–3.9%), Phoenix (–1.4%), Dallas (–1.4%), and Miami (–1.0%) saw declines.
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“Regional patterns continue to illustrate a stark divergence. Chicago leads all cities for a second consecutive month with a 5.7% year-over-year price increase, followed by New York at 5.0% and Cleveland at 3.4%. These historically steady Midwestern and Northeastern markets have maintained respectable gains even as overall conditions cool. By contrast, Tampa home prices are 3.9% lower than a year ago – the steepest decline among the 20 cities, extending that market’s 13-month streak of annual drops. Other Sun Belt boomtowns remain under pressure as well: Phoenix (-1.4%), Dallas (-1.4%), and Miami (-1.0%) each continue to see year-over-year declines, a dramatic turnaround from their pandemic-era strength.

“Monthly price changes were mixed but leaned negative in November, underscoring persistent softness. On a non-seasonally adjusted basis, 15 of the 20 major metro areas saw prices decline from October (versus 16 declines in the previous month). Only a handful of markets – including Los Angeles, San Diego, Miami, New York, and Phoenix – eked out slight gains before seasonal adjustment. After accounting for typical seasonal slowing, the National Index inched up just 0.4% for the month, indicating that price momentum remains muted.
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The S&P Cotality Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 1.4% annual gain for November. The 10-City Composite showed an annual increase of 2.0%, up from a 1.9% increase in the previous month. The 20-City Composite posted a year-over-year increase of 1.4%, up from a 1.3% increase in the previous month.
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The pre-seasonally adjusted U.S. National Index saw a drop of 0.1% and the 20-City Composite Index fell 0.03%, while the 10-City Composite Index increased 0.1%.

After seasonal adjustment, the U.S. National Index reported a monthly increase of 0.4%, and both the 10-City Composite and 20-City Composite Indices posted month-over-month gains of 0.5%.


Strong Buyers Market In Housing! 47.1% More Sellers Than Buyers

Its some kind of wonderful … for home buyers.

Home sellers outnumbered buyers by 47.1% in December 2025, the largest gap since Redfin data began in 2013.

The percentage jumped by +7.1 points from November, the biggest monthly increase since September 2022.

The number of active homebuyers fell -5.9% MoM to 1.34 million, the lowest level on record.

Meanwhile, home sellers declined -1.1% MoM to 1.97 million, the lowest since February 2025.

By comparison, in November 2021, there were 36.5% fewer sellers than buyers.

This all comes as elevated housing costs and economic uncertainty continue to push buyers to the sidelines.

Buyers now hold unprecedented negotiating power, but only if they can afford to enter the market.

Let’s see what sugar babe (aka The Federal Reserve) does.

Mortgage Market After Covid! Soaring Home Prices And Mortgage Rates Led To Collapse Of Mortgage Originations

Like The Talking Heads song “Life During Wartime,” we are dealing with the mortgage market affer Covid. What happened? Mortgage originations plunged after mortgage rates (red line) soared.

In addition, insane Federal spending levels caused housing prices to soar.

‘Stay warm!

Whip It? US Pending Home Sales Fall To All-time Low

Whip it! Will Powell and The Fed whip rates lower?

Bill Pulte has failed so far in making housing affordable. And don’t get me started on The Feral Reserve.

As a consequence of high home prices and relatively high mortgage rates, pending home sales have hit an all-time low.

Gone are the days of Janet Yellen and ZIRP (zero interest rate policies).

West Coast Leads US In Q4 Office Vacancies, National Vacancy Rate Is 20.5% (SF 33.1%, Seattle 32.3%, LA CBD 31.7%)

The west may be the best, but not for office space vacancies. National office vacancy rates were 20.5% as of Q4 2025, according to Cushman and Wakefield.

Newsom country (California) leads the nation in terms of office vacancy with San Francisco leading the pack at 33.1, Seattle at 32.3% and LA CBD at 31.7%

Q4 2025 Office Vacancy Rates – Cushman and Wakefield

Atlanta 25%

Austin 29%

Charlotte 24.6%

Chicago 25.6%

Cincinnati 25.4%

Dallas 25.9%

Denver 26.3%

Fairfield County, CT 26.8%

Houston 24.8%

Los Angeles CBD 31.7%

Los Angeles Non CBD 22.2%

Milwaukee 24.7%

Minneapolis/St. Paul 27.9%

New York – Downtown 22.2%

New York – Midtown 20.0%

New York – Midtown South 23.9%

Northern VA 24.0%

Oakland 22%

Oklahoma City 29.6%

Phoenix 26.5%

Portland 24.3%

Raleigh/Durham 22.9%

San Francisco 33.1%

Seattle 32.3%

Suburban MD 23.3%

Washington, DC 22.8%

Westchester County, NY 24.4%

Miami’s QB Carson Beck,

US Existing Home Sales Surged +5.1% MoM In December (Median Home Sales Price Declining Along With Mortgage Rates)

The US housing market is showing signs of improvement!

US existing home sales surged +5.1% MoM in December, to an annualized rate of 4.35 million, the highest since March 2023.

This marks the 4th consecutive month of growth and the strongest monthly gain since February 2023.

However, sales remain -2.51 million or -37% below the 2020 peak levels.

For the full year, there were 4.06 million existing home sales, unchanged from 2024.

Meanwhile, the median home sales price rose +0.4% YoY, to $405,400, a record high for any December. But mortgage rates have been declining.

Good Feds Don’t! Fed Money Printing Benefits The Top 1%, Not The Bottom 50% (The Fed Acting Like Somalian Daycare Centers)

A good Federal Reserve don’t. Print money, that is.

The Federal Reserve prints a lot of money (M2). Unfortunately, it largely benefits elites (the top 1%). The bottom 50% get some benefits, but the gains in net worth largely benefits the elite class.

This sounds like a legal Somali daycare scheme. Perhaps The Fed should be renamed “The Federal Quality Learing Center.”

Yes, Somalis have daycare centers in Columbus Ohio. Thanks Governor Dewine for doing absolutely nothing to reign in their fraud. /sarc

Fannie Mae, Freddie Mac MBS Buying Raises Rate-Vol Tail-Risks ($200 Billion In Agency MBS Generates 30-Year Rate Of 5.99%)

President Trump ordered Fannie Mae and Freddie Mac to operate like The Federal Reserve. Buying assets to manipulate interest rates. In this case, F&F have been ordered to buy $200 billion of agency MBS.

President Donald Trump’s directive for Fannie Mae and Freddie Mac to buy $200 billion of agency MBS is supportive for Treasuries at the margin, but it also increases traditional mortgage hedging dynamics in rate markets.

Thursday’s Truth Social post triggered an immediate snap tighter in mortgages, led by the belly and lower coupons. By pulling MBS spreads tighter and crowding out real-money buyers, Fannie and Freddie’s purchases would push incremental demand into Treasuries as the next-best duration substitute, putting a modest bid under the belly of the curve.

However, execution and the ultimate size of purchases is still unclear, as my colleague Alyce Andres noted. If the government-sponsored enterprises GSEs stagger purchases, and signal an ultimate increase above the announces $200 billion, further tightening should occur. They can fund a lot of the buys from existing liquidity portfolios, though there’s a path where they could issue short-term debt to preserve operating buffers and could nudge repo wider at the margin.

The bigger transmission channel is hedging, as highlighted by colleagues Ira Jersey and Will Hoffman. Unlike the Fed, the GSEs actively hedge MBS holdings, shedding duration by paying fixed rates in swaps and using swaptions to manage the negative convexity and vega risks embedded in mortgages. That matters for swap spreads and for volatility, especially in the belly.

That’s why GSE MBS purchases don’t have to be huge to change the feel in rate markets. The post-Global Financial Crisis regime dulled the classic convexity feedback loop because the Fed held such a large amount of agency MBS and didn’t hedge it, while the GSEs shrank their portfolios. Trump’s directive risks bringing more of that regime back.

A recent note out of Goldman Sachs frames it cleanly: A $200 billion build could lift the active convexity-hedger footprint by about 25%. The street then starts front-running the mechanical flows — paying in selloffs, receiving in rallies — which makes breakouts more likely even if day-to-day ranges look calm, Goldman added.

Positioning makes the setup more precarious. JPMorgan already saw mortgage valuations as a “bit snug” before the announcement, while BofA flagged that rates market had recently added fresh belly shorts sitting against a backdrop of benchmark funds still overweight MBS versus IG.

That mix can keep the initial tightening sticky, but it also raises the odds of sharp reversals if the market decides the purchasing flows are slower, smaller, or more heavily hedged than hoped.

Fannie and Freddie’s retained portfolio are soaring along with the duration gap.

The effect on mortgage rates has so far has been negligible. The 30-year conforming mortgage just fell below 6% at 5.99%.

US Q4 Real GDP Forecast Is 5.4% As Trumps Orders GSEs To Buy $200 BILLION In Mortgage Bonds (Exports Rising At 6.1% And Imports Falling -9.4%)

It looks like President Trump wants ANOTHER Federal Reserve. He has ordered the GSEs (Fannie Mae and Freddie Mac) to purchase $200 BILLION in mortgage bonds in an attempt to lower mortgage rates. Puzzling since real GDP growth is soaring.

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2025 is 5.4 percent on January 8, up from 2.7 percent on January 5. After recent releases from the US Bureau of Economic Analysis, the US Census Bureau, and the Institute for Supply Management, the nowcast of fourth-quarter real personal consumption expenditures growth increased from 2.4 percent to 3.0 percent, while the nowcast of the contribution of net exports to fourth-quarter real GDP growth increased from -0.30 percentage points to 1.97 percentage points.

The 5.4% real GDP forecast is largely due to exports rising at 6.1% and imports falling -9.4%.

Looks like Trump’s tariffs are working.