Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
September US home sales printed at 4.06 million units.
The US still hasn’t recovered from the Covid 19 outbreak of 2020 and the Fed’s response to Covid.
On the commercial real estate side, CRE prices remain below Covid 19 outbreak levels.
The US housing market is in a pickle. Home sellers now outnumber buyers by more than 500,000, the largest gap ever recorded.
Can we ask the US House and Senate if they will ever return US Federal government spending to pre-Covid levels? Both US Federal government spending and public debt are up 56% since the Covid outbreak in 2020.
The answer is no. Politicians thrive on Federal spending.
Feelin’ stronger for the most part.
Mortgage applications decreased 4.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 3, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 4.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 14 percent higher than the same week one year ago.
The Refinance Index decreased 8 percent from the previous week and was 18 percent higher than the same week one year ago.
With mortgage rates on fixed-rate loans little changed last week, refinance application activity generally declined, with the exception of a modest increase for FHA refinance applications.
Mortgage demand dwindled since Covid and Biden/Powell and hasn’t recovered.
US home prices are downshifting to a lower gear.
Home prices across the top 20 cities in the US fell by 0.07% MoM (less than the 0.2% decline expected) – the fifth straight monthly drop in prices. This pulled the YoY price appreciation down to 1.82%, the lowest since July 2023.
The U.S. housing market continues its dramatic shake-up, with 7 cities seeing outright price declines YoY, lead by Tampa FL.
On the up side, Attom lists the following big gainers in price.
#10 – Wichita County, Texas
#9 – Whitfield County, Georgia
#8 – Tompkins County, New York
#7 – Fayette County, Pennsylvania
#6 – Schuylkill County, Pennsylvania
#5 – Jackson County, Michigan
#4 – Kankakee County, Illinois
#3 – Tom Green County, Texas
#2 – Saint Louis County, Missouri
#1 – Jasper County, Missouri
A simple model of national home prices? Try Fed money printing.
August data for the US housing market has been ‘mixed’ to say the least with a surge in new home sales (thanks to a massive rise in incentives from homebuilders) and a small decline (near multi-year lows), leaving this morning’s pending home sales data as the tie-breaker (with expectations of an ‘unch’ shift MoM).
It appears the drop in mortgage rates is driving some purchase activity as pending home sales soared 4.0% MoM in August – the most since March – dragging sales up 0.5% YoY.
Mortgage rates are falling, helping existing home sales. Note that the 30-year mortgage rate peaked at 18.63% in 1981.
It’s Friday and the US Treasury yield curve is rising/steepening at the 10-year tenor.
As of yesterday, the 30-year mortgage rate fell to 6.17%
Thanks in part to Funky Cold Jerome!
Fed Chair Jerome Powell is the God of Hellfire! We should always wait a day to digest Fed’s annoucements since they often make little sense. For example, yesterday the 10Y yield fell below 4% after The Fed’s announcement … then promplty rose above 4% again. And today, the US Treasury 10Y yield rose to 4.1276%
The 30Y US mortgage rate fell to 6.493%.
How about the US Dollar? Similar to the US 10Y yield, volatility reigned following Powell’s muddled message.
Powell rarely is straightforward and never puts cash on the barrelhead.
Zowie!
Mortgage applications increased 29.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 12, 2025. Last week’s results included an adjustment for the Labor Day holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 29.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 43 percent compared with the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 12 percent compared with the previous week and was 20 percent higher than the same week one year ago.
The Refinance Index increased 58 percent from the previous week and was 70 percent higher than the same week one year ago.
Indicative of the weakening job market, and in anticipation of a rate cut from the Federal Reserve, mortgage rates last week dropped to their lowest level since last October, with the 30-year fixed rate declining to 6.39 percent. Homeowners responded swiftly, with refinance application volume jumping almost 60 percent compared to the prior week. Homeowners with larger loans jumped first, as the average loan size on refinances reached its highest level in the 35-year history of our survey. Almost 60 percent of applications were for refinances, but there was also a pickup in purchase applications.
The Biden/Powell “reign of error” is ending.
It will take a while to recover from Biden’s “Reign of Error.” According the US Census Bureau, housing starts are 6.0 percent below the August 2024 rate.
Housing starts:
Housing permits?
Let’s see if Powell and The Gang drop rates 25 or 50 basis points at today’s FOMC meeting.
Between The Fed’s persistent policy errors and Biden’s centralized mismanagement of the economy, Biden’s Maladministration is the epitome of a “Reign of Error.”
Confounded Interest - Anthony B. Sanders 
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