Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
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).
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,
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.
This is the opposite of the housing bubble from The Big Short where home prices in Phoenix, Las Vegas, Los Angeles and Florida rose then crashed. Instead, the fastest growing cities are in the northeast and midwest.
The Case-Shiller 20-City Home Price Index rose 1.3% year over year in October 2025, easing from a 1.4% increase in September and coming in slightly above market expectations of a 1.1% gain. This represents the smallest annual increase since July 2023, reinforcing signs that the US housing market is settling into a much slower growth phase. Home price appreciation continues to trail consumer inflation. With October CPI estimated at around 3.1%, inflation-adjusted home values appear to have edged modestly lower over the past year.
Regional data point to a pronounced geographic rotation. Chicago now leads all major markets with a 5.8% annual gain, followed by New York at 5.0% and Cleveland at 4.1%. In contrast, Tampa recorded a 4.2% decline, the steepest among the 20 cities, and its 12th consecutive month of falling annual prices. Other former pandemic boom markets, especially in the Sun Belt, are seeing the sharpest declines, led by Phoenix (-1.5%), Dallas (-1.5%), and Miami (-1.1%).
Housing price growth has stalled even though M2 money growth is higher YoY.
On the silver front, silver regained losses yesterday, but increased margin requirements are causing losses again.
Today.
Housing thunder? Or housing lightning!
Pending sales of existing homes in the US surged 3.3% MoM (more than the expected 0.9% MoM move) in November as a modest improvement in prices and mortgage rates encouraged buyers.
The gain was broad-based across regions and exceeded all but one estimate in a Bloomberg survey of economists, but left the YoY change in sales somewhat stagnant on an NSA basis.
Signings have now increased for four straight months, matching a streak seen during the frenzied housing market of the pandemic.
The trade association’s report on Monday showed contract signings rose in each US region last month to their highest levels of the year. The West posted the largest increase, followed by the South, the nation’s largest home-selling region.
November’s surge dragged the Pending Home Sales Index to its highest since Feb 2023…
Bloomberg reports that the recent data point to the gradual improvement many economists see for the housing market into 2026.
Mortgage rates that were close to 7% in May have since settled in the 6.3% to 6.4% range, and home prices are growing at a much slower rate compared to last year.
That’s helped fuel small gains in contract closings in recent months. However, economists and industry experts have widely different expectations for next year.
In a recent survey of nine market analysts, estimates for the home resale market ranged from 1.7% to 14% sales growth, with the rosiest projection coming from NAR’s Yun.
Pending-homes sales tend to be a leading indicator for previously owned homes, as houses typically go under contract a month or two before they’re sold.
Gold and silver. Gold is now outperforming the Stock Market over the last 30 years.
Silver is up 10% on Friday.
Silver (XAG) just hit the $79.2708 price point.
Dino’s song. A shout-out to David Freiberg on the Gibson SG bass and John Cipollina on the Gibson SG guitar. I love the Gibson SG!
Fly like an eagle should be the theme song for the Trump economy. Trump’s economy keeps on soaring.
The initial GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2025 is 3.0 percent on December 23. The first estimate of third-quarter real GDP growth released by the US Bureau of Economic Analysis was 4.3 percent, 0.8 percentage point above the final GDPNow nowcast.
Real gross domestic product (GDP) increased at an annual rate of 4.3 percent in the third quarter of 2025 (July, August, and September), according to the initial estimate released by the U.S. Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent.
Well, tariffs didn’t turn out to be a lethal weapon as Democrats predicted. The US economy continues to grow!
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2025 is 3.5 percent on December 16, down from 3.6 percent on December 11. After this morning’s releases from the US Census Bureau and US Bureau of Labor Statistics, the contributions of consumer spending and inventory investment to third-quarter real GDP growth fell slightly to 1.84 and 0.09 percentage points, respectively.
All signs except real estate construction and imports point to continued economic growth.
But as long as The Federal Reserve continues to print money (M2), the economy will continue to grow. Keep on printing?
Hallelujah, I love this economy so! Of course, former First Lady Jill Biden is on the national tour trashing the economy saying it was “perfect” under Joe Biden.
Mortgage applications increased 4.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 5, 2025. Last week’s results included an adjustment for the Thanksgiving holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 4.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 49 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index increased 32 percent compared with the previous week and was 19 percent higher than the same week one year ago.
The Refinance Index increased 14 percent from the previous week and was 88 percent higher than the same week one year ago.
Compared to the prior week’s data, which included an adjustment for the Thanksgiving holiday, mortgage application activity increased last week, driven by an uptick in refinance applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Conventional refinance applications were up almost 8 percent and government refinances were up 24 percent as the FHA rate dipped to its lowest level since September 2024. Conventional purchase applications were down for the week, but there was a 5 percent increase in FHA purchase applications as prospective homebuyers continue to seek lower downpayment loans. Overall purchase applications continued to run ahead of 2024’s pace as broader housing inventory and affordability conditions improve gradually.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.33 percent from 6.32 percent, with points increasing to 0.60 from 0.58 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The US economy is goin’ home! The hysteria about tariffs is nonexistant.
Latest estimate: 3.5 percent — December 05, 2025
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2025 is 3.5 percent on December 5, down from 3.8 percent on December 4. After this morning’s personal income and outlays release from the US Bureau of Economic Analysis, the nowcast for third-quarter real personal consumption expenditures growth declined from 3.1 percent to 2.7 percent.
Unfortunately, residential and non-residential construction are negative as are imports.
Confounded Interest - Anthony B. Sanders 
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