Off To A Bad Start! Mortgage Purchase Applications Declined 7% Since Last Week, Down 15% Since Same Week Last Year

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.

Then we have this diddy from The Epoch Times where a mortgage company allegedly provided a loan to a household that had 33 debts in collection. Hey, I thought under Senator Elizabeth Warren’s brainchild these reckless lending practices were over!

One will be gone on January 20 and I wish the other one would be gone too.

Going Down? US Yield Curve Inverts To Positive After Longest Inversion Since Carter (Predictor Of Recession)

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.

US Home Prices Surge To 17th Consecutive All-Time High (NYC Leads Nation, Tampa Last)

US home prices surged to the 17th consecutive all-time high.

US home prices in the 20 largest cities rose 0.32% MoM in October (the latest data from S&P CoreLogic Case-Shiller), considerably hotter than the 0.22% rise expected. However, despite the MoM beat, the pace of annual acceleration has declined to its slowest since Sept 2023. At 3.62% YoY.

Which metro area had the highest gain? New York City at 7.27%. The lowest gain? Tampa at 0.39%.

(Not So Sweet Home) Chicago PMI Falls To 36.9, Manufacturing Index Slumps To -10.71 As Federal Spending Slows

Sweet home Chicago … NOT!

The Biden/Harris economic “miracle” was simply massive Federal spending (and borrowing) combined with hiring Federal workers. This can be seen in the following chart of Chicago Fed manufacturing index compared with Federal spending. Great times in the first months of 2021, but as Federal spending slowed, so did the manufacturing index. Last seen at -10.71 in December 2024.

Joe Biden, sold his soul for family wealth at the crossroads in Delaware.

Inflation Still Raging! 30Y Mortgage Rate Rose 141% Under Biden/Harris

Inflation soared under Biden/Harris, primarily due to their outrageous wasteful government spending.

US government spening soared with Covid and politicians enjoyed the unbridled spending.

Let’s see if Trump and Republicans can do any better.

Fed Drops Target Rate By 50 BPS, Assets Smashed, Gold Falls More Than 2% (Fed Predicts Fewer Rate Cuts In 2025)

As expected, Powell and The Fed dropped their target rate by 50 basis points yesterday, deflating some of the air in the asset markets, More rate cuts will come, but at a slower rate.

Gold got clobbered but has somewhat rebounded.

Bitcoin did likewise: dropping like a rock then bouncing back somwhat.

But gold and bitcoin/ethereum are down again.

The CBOE VIX volatility index exploded upwards.

Powell is looking old, like most of Congress and Biden.

All Aboard The Crazy Train! Biden’s Post COVID Economic “Miracle” Was Just Borrow And Spend (Large Corporations And Few Individuals Benefitted From COVID Spending)

All aboard the Biden/Pelos/Schumer crazy spending train!

Wage and salary income as a percentage of GDP has fallen from over 50% back in 1970 to 43.1% in 2022. And look at the post Covid decline! And the increase in M2 Money.

Meanwhile the US budget balance as a % of GDP has been plunging downwards in recent years.

Despite the slowing economy, pre-tax profits post Covid have SOARED!

Primarily due to reckless/wasteful Federal spending and FEDERAL DEBT that soared.

There you have it! The Biden/Harris economic “miracle” was simply Federal government malspending that benefitted large corporations and few people.

Joe Biden and his woefully corrupt son Hunter of laptop fame.

Like A Great White Shark! Bitcoin Breaches $100k, Gold Had A Tremendous Run Under Biden/Harris

Like a Great White Shark, Bitcoin has breached $100k!

Gold, a competitor to the US Dollar, is down a bit today, but has been rising with the prospect of Trump deregulating the hamstrung US economy. Gold rose under Biden/Harris (and McConnel/Schumer’s) gross fiscal mismanagemment.

Here is a picture of Bitcoin breaching the surface. And why it pays not to surf near seals or sea lions.

Existing Home Sales Drop, Worst Drop Since 2013

The last gasp of the Biden/Harris reign of (economic) error!

After existing home sales unexpectedly ticked up in October, analysts expected new home sales to slow after their recent resurgence (-1.8% MoM). They were right… BUT… the magnitude is mind-boggling!

New Home Sales collapsed 17.3% MoM in October. That is the largest MoM drop since July 2013.

Source: Bloomberg

That MoM plunge dragged sales down 9.4% YoY to 610k SAAR – the lowest since Nov 2022

Source: Bloomberg

Of course, all the revisions are lower…

Hurricanes Helene and Milton, which tore through parts of the Southeast, delayed sales in the nation’s biggest housing region and dragged down sales overall.

Sales in the South decreased 28% to 339,000, the slowest pace since April 2020. Sales also fell in the West, but rose in the Northeast and the Midwest.

Source: Bloomberg

Finally, we note that the median sale price of a new home increased to $437,300 in October, the highest in 14 months.

Does this mean November’s data will see a massive surge in new home sales? …even as rates have increased significantly?

We Got Fooled Again! Federal Debt Is UP 236% Since Obama/Biden Were Sworn-in In 2009, Federal Spending Is UP 121% (Unfunded Liabilities [Promises] Now At $221 Trillion)

Meet the new boss, same as the old boss. We did get fooled again!

The problem with the national debt can’t be fixed with Mitch McConnell still in the Senate and too many Obama-era political hacks still in Washington DC.

The Obama/Biden era began in 2009 and it still exists despite Trump winning the Presidency for 2025. The Obama/Biden regime along with Congressional assistance drove up US Federal Debt to around $36 TRILLION. That is an increase of a staggering 236% since Obama/Biden were sworn into office in January 2009. And Federal spending is up 121%.

Unfortunately, Trump cannot pull a Javier Milei (Argentina’s libertarian President) and obliterate the bloated carcas of Federal bureaucracy. Democrats and RINOs like Mitch McConnell will work overtime thwarting Trump’s efforts to control the bloat.

And don’t forget the $221 TRILLION in unfunded liabilities (promises) that Congress had made to get elected. That will eventually become Federal debt.