Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
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.
I’ll feel a whole lot better when CMBS office serious delinquenies get below 10%. But serious delinquencies on office space is currently at 10.59%.
The US Treasury yield curve is steepening.
Office delinquencies are likely to rise in Los Angeles as Governor Newsom sits on his greasy hands as LA burns.
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.
The Fed can help, but won’t. We are still struggling to recover from Biden’s cockeyed management of the economy,
Mortgage applications increased 11.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 2, 2025.
The Market Composite Index, a measure of mortgage loan application volume, increased 11.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 12 percent compared with the previous week. The seasonally adjusted Purchase Index increased 11 percent from one week earlier. The unadjusted Purchase Index increased 12 percent compared with the previous week and was 13 percent higher than the same week one year ago.
The Refinance Index increased 11 percent from the previous week and was 51 percent higher than the same week one year ago.
The economic news last week included a negative reading for first-quarter GDP growth and further signs of contraction in the manufacturing sector, mixed with a solid employment report for April. The net impact on mortgage rates was mostly downward but just back to levels from early April. The 30-year fixed rate declined to 6.84 percent.
But there will be no rate cuts today from The Fed.
Mortgage applications decreased 4.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 25, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 4.2 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 4 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 3 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.
The Agency MBS market shrank in April.
And MBS daily returns have the highest return volatility.
Republicans are trying to lock in Trump’s tax cuts and Democrats are resisting. We now know that DOGE is trying to end the wasteful spending in DC. But I would really like to see tax rates on the middle class fall.
The wealth gap between the top 1% of taxpayers and the bottom 50% of taxpayers is enormous. And has gotten worse since 1990.
Meanwhile. to fight off the temporary effects of the tariff war, Trump is urging Fed Chair Powell to cut rates.
Powell will likely NOT cut rates. But what does “Lunatic Liz” Warren say about rate cuts??
US home prices hit a new record high in February, according to the latest data from S&P CoreLogic Case-Shiller, rising 0.4% MoM (as expected). However, the pace of price rises did slow modestly (after accelerating for the past three months) to +4.50% YoY. And home prices track Fed money printing.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 3.9% annual return for February, down from a 4.1% annual gain in the previous month. The 10-City Composite saw an annual increase of 5.2%, down from a 5.4% annual increase in the previous month. The 20-City Composite posted a year-over-year increase of 4.5%, down from a 4.7% increase in the previous month. New York again reported the highest annual gain among the 20 cities with a 7.7% increase in February, followed by Chicago and Cleveland with annual increases of 7.0% and 6.6%, respectively. Tampa posted the lowest return, falling 1.5%.
The pre-seasonally adjusted U.S. National, 10-City Composite, and 20-City Composite Indices presented slight upward trends in February, posting 0.4%, 0.8%, and 0.7% respectively.
After seasonal adjustment, the 10-City and 20-City Composite Indices posted month-over-month increases of 0.5% and 0.4%. The U.S. National Composite Index posted a month-over-month increase of 0.3%.
“Even with mortgage rates remaining in the mid-6% range and affordability challenges lingering, home prices have shown notable resilience,” said Nicholas Godec, CFA, CAIA, CIPM, Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices. “Buyer demand has certainly cooled compared to the frenzied pace of prior years, but limited housing supply continues to underpin prices in most markets. Rather than broad declines, we are seeing a slower, more sustainable pace of price growth.”
Washington DC is loaded with good ol’ boys. Willing to cut deals with anyone for a slice of financial pie. Like “10% For The Big Guy” Joe Biden.
Money flowing into Treasury funds hit its highest since 2017, by far.
And with the massive expansion of The Fed’s balance sheet with a) the financial crisis and b) Covid crisis, The Fed still has a staggering amount of bonds on its balance sheet, making it vulnerable to interest rate increases.
Like what has happened in 2023 and 2024 under Biden. A fine mess!
Sail away. We are all prisoners of the theft by DC politicians.
Confounded Interest - Anthony B. Sanders 
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