Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
The US Treasury yield curve is flattening at the short-end (2-3 years) but remains unchanged at the long end (>= 20 years).
And pending US Home Sales remain low.
It will take a while to recover from Biden’s horrid economic follicies.
The Fed continues printing money! And home prices continue to rise on year-over-year basis, but falling on a month-over-month basis.
Home prices in April tumbled 0.31% MoM (-0.02% exp) – the biggest MoM drop since Dec 2022.
But if we look at the national home prices via S&P Case-Shiller and YoY rather than MoM, home prices ROSE 2.64% YoY.
You can see the damage to homeownership caused by Covid and The Fed. The massive expansion of M2 Money in 2020 was followed shortly by rapid increases in home prices. This was followed by a normalization in Fed M2 Money printing. Consequently, home price growth has slowed.
All aboard! The crazy mortgage train! Home prices rose 39% under Biden while mortgage originations at large banks fell -61%. The mortgage market is still recovering from Bidenomics!
Mortgage applications decreased 2.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 13, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 2.6 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 3 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 14 percent higher than the same week one year ago.
The Refinance Index decreased 2 percent from the previous week and was 25 percent higher than the same week one year ago.
Home prices rose 39% under Biden while mortgage originations at large banks fell -61%.
The Fed’s themesong: Keep on printing!
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 3.5 percent on June 17, down from 3.8 percent on June 9. After recent releases from the US Census Bureau, the US Bureau of Labor Statistics, the Federal Reserve Board of Governors, and the Treasury’s Bureau of the Fiscal Service, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real government expenditures growth decreased from 2.5 percent and 2.3 percent, respectively, to 1.9 percent and 2.1 percent, while the nowcast of second-quarter real gross private domestic investment growth increased from -1.9 percent to -1.4 percent.
GDP growth corresponds to Fed money printing.
Here is the breakdown. True, real GDP growth has been slowing over June.
Thanks a lot Fed! Home prices rose dramatically after Covid as The Fed printed billions of dollar of currency (M2). Making housing unaffordable for much of America.
As a result of higher mortgage rates and higher home prices, homebuilder confidence is at a 13 year low (back to 2012).
Housing is simply unaffordable thanks to bad housing policies and The Fed.
Should President Trump fire Fed Chair Jerome Powell and replace his with someone else like Treasury Secretary Scott Bessent? The answer is … YES!
Why? First, there was a massive response to the Covid outbreak in 2020. And the monetary stimulus (aka, stimulypto) has never been removed.
The Fed Funds Target Rate (upper bound) remains high at 4.50% and M2 Money supply is $21.8 TRILLION.
Second, The Fed could help reduce the interest paid on the massive Federal debt load when the debt if refinanced.
The US Treasury yield curve tends to follow anticipated Fed moves.
Of course, The Fed should be abolished. But a step in the right direction would be to fire “Foul Powell” who is on the prowl.
Fed Chair Jerome Powell.
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.
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.
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.
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.
Confounded Interest - Anthony B. Sanders 
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