At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• FHFA’s National Mortgage Database: Outstanding Mortgage Rates, LTV and Credit Scores

• Freddie Mac House Price Index Declined in May; Up 2.2% Year-over-year

• Fannie and Freddie: Single Family Serious Delinquency Rates Decreased in May

• Asking Rents Mostly Unchanged Year-over-year

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

This will be a very light week for economic data.

----- Monday, July 7th -----
No major economic releases scheduled.

----- Tuesday, July 8th -----
6:00 AM ET: NFIB Small Business Optimism Index for June.

----- Wednesday, July 9th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

2:00 PM: FOMC Minutes, Meeting of June 17-18

----- Thursday, July 10th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims to increase to 235 thousand from 233 thousand last week.

----- Friday, July 11th -----
No major economic releases scheduled.

From STR: U.S. hotel results for week ending 28 June

The U.S. hotel industry reported mostly negative year-over-year comparisons, according to CoStar’s latest data through 28 June. ...

22-28 June 2025 (percentage change from comparable week in 2024):

• Occupancy: 71.9% (-0.1%)
• Average daily rate (ADR): US$163.30 (0.0%)
• Revenue per available room (RevPAR): US$117.45 (-0.1%)
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.
Click on graph for larger image.

The red line is for 2025, blue is the median, and dashed light blue is for 2024.  Dashed purple is for 2018, the record year for hotel occupancy. 
The 4-week average of the occupancy rate is tracking slightly behind both last year and the median rate for the period 2000 through 2024 (Blue).
Note: Y-axis doesn't start at zero to better show the seasonal change.
The 4-week average will increase further during the summer travel season; however, we will likely see some hit to occupancy during the summer months due to less international tourism.

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

There will be additional trade related distortions in Q2 boosting GDP.

From Goldman:

Following this morning’s data, we have lowered our Q2 GDP tracking estimate by 0.6pp to +3.0% (quarter-over-quarter annualized). Our Q2 domestic final sales estimate stands at +0.7%. [July 3rd estimate]
emphasis added

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 2.6 percent on July 3, up from 2.5 percent on July 1. After recent releases from the US Census Bureau, the US Bureau of Economic Analysis, the US Bureau of Labor Statistics, and the Institute for Supply Management, the nowcasts of second-quarter real personal consumption expenditures growth and real gross private domestic investment growth increased from 1.5 percent and -11.9 percent, respectively, to 1.6 percent and -11.7 percent, while the nowcast of second-quarter real government expenditures growth increased from 2.0 percent to 2.3 percent. [July 3rd estimate]

From the Association of American Railroads (AAR) AAR Data Center. Graph and excerpts reprinted with permission.

In recent months the U.S. economy has defied easy characterization, caught between signals of underlying strength and uncertainty regarding the road ahead. Rail freight volumes have followed that lead, reflecting a mix of cautious optimism and lingering hesitation across key sectors. The uncertainty characterizing both the economy and freight markets is likely to continue because key drivers of economic momentum— including the labor market, consumer spending, inflation levels, interest rates, and economic policies across the globe—remain fluid.
emphasis added

On intermodal:

U.S. rail intermodal originations fell 2.9% (31,000 containers and trailers) in June 2025 from June 2024, their first year-over-year decline in 22 months. June’s decline comes amid broader uncertainties impacting global supply chains that have tempered international shipments. In June 2025, U.S. rail intermodal volume averaged 260,834 units per week, below the 2016-2005 average for June of 263,991.

Meanwhile, total U.S. rail carloads (excluding intermodal) rose 2.1% (nearly 19,000 carloads) in June 2025 over June 2024, their fourth straight year-over-year increase— the first time that’s happened since late 2021. In June, 10 of the 20 carload categories tracked by the AAR had year over-year gains. Total U.S. rail carloads averaged 226,259 per week in June 2025, the most for June since 2021. In the 66 months since January 2020, only 14 months had a higher weekly average than June 2025 did.

(Posted with permission). The ISM® Services index was at 50.8%, up from 49.9% last month. The employment index decreased to 47.2%, from 50.7%. Note: Above 50 indicates expansion, below 50 in contraction.

From the Institute for Supply Management: Services PMI® at 50.8% June 2025 Services ISM® Report On Business®

Economic activity in the services sector grew in June after just one month of contraction, say the nation's purchasing and supply executives in the latest Services ISM® Report On Business®. The Services PMI® indicated expansion at 50.8 percent, above the 50-percent breakeven point for 11th time in the last 12 months.

The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “In June, the Services PMI® registered 50.8 percent, 0.9 percentage point higher than the May figure of 49.9 percent. The Business Activity Index returned to expansion territory in June, registering 54.2 percent, 4.2 percentage points higher than the ‘unchanged’ reading of 50 percent recorded in May. This index has not been in contraction territory since May 2020. The New Orders Index returned to expansion territory in June, recording a reading of 51.3 percent, an increase of 4.9 percentage points from the May figure of 46.4 percent. The Employment Index returned to contraction territory for the third time in the last four months; the reading of 47.2 percent is 3.5 percentage points lower than the 50.7 percent recorded in May.

“The Supplier Deliveries Index registered 50.3 percent, 2.2 percentage points lower than the 52.5 percent recorded in May. This is the seventh consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)

“The Prices Index registered 67.5 percent in June, a 1.2-percentage point decrease from May’s reading of 68.7 percent. The index has exceeded 60 percent for seven straight months, with the May and June readings the highest since November 2022 (69.4 percent).
emphasis added

This was at consensus expectations, but employment was weak and prices paid very high.

The Census Bureau and the Bureau of Economic Analysis reported:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $71.5 billion in May, up $11.3 billion from $60.3 billion in April, revised.

May exports were $279.0 billion, $11.6 billion less than April exports. May imports were $350.5 billion, $0.3 billion less than April imports.
emphasis added

Click on graph for larger image.

Exports and imports decreased in May.

Exports were up 5.3% year-over-year; imports were up 3.3% year-over-year.
Imports increased sharply earlier this year as importers rushed to beat tariffs.  

The second graph shows the U.S. trade deficit, with and without petroleum.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Note that net, exports of petroleum products are positive and have been increasing.

The trade deficit with China decreased to $13.9 billion from $23.7 billion a year ago.

The DOL reported:

In the week ending June 28, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 4,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 236,000 to 237,000. The 4-week moving average was 241,500, a decrease of 3,750 from the previous week's revised average. The previous week's average was revised up by 250 from 245,000 to 245,250.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 241,500.

The previous week was revised up.

Weekly claims were lower than the consensus forecast.

The headline jobs number in the June employment report was above expectations and April and May payrolls were revised up by 16,000 combined.     The participation rate decreased, the employment population ratio was unchanged, and the unemployment rate was decreased to 4.1%.
NOTE: State and local government hiring was reported at 63.5 thousand in June (seasonally adjusted).  On a Not Seasonally Adjusted (NSA) basis, 542.4 thousand education jobs lost.  This happens every June.   However, this year fewer jobs were lost than expected resulting in the large SA gain.  It is possible this is just a timing issue and more than expected educators will be let go in July.

Earlier: June Employment Report: 147 thousand Jobs, 4.1% Unemployment Rate
Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 years old participation rate increased in June to 83.5% from 83.4% in May.
The 25 to 54 employment population ratio increased to 80.7% from 80.5% the previous month.
Both are down slightly from the recent peaks, but still near the highest level this millennium.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  
There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 3.7% YoY in June.   
Part Time for Economic Reasons

From the BLS report:

"The number of people employed part time for economic reasons, at 4.5 million, changed little in June. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons decreased in June to 4.47 million from 4.62 million in May.  This is above the pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 7.7% from 7.8% in the previous month. This is down from the record high in April 2020 of 22.9% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.6%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.65 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.46 million the previous month.
This is down from post-pandemic high of 4.171 million, and up from the recent low of 1.056 million.

This is above pre-pandemic levels.

Job Streak

Through June 2025, the employment report indicated positive job growth for 54 consecutive months, putting the current streak in 2nd place of the longest job streaks in US history (since 1939).  
Headline Jobs, Top 10 Streaks Year EndedStreak, Months 12020113 2Current, N/A541 3199048 4200746 5197945 6 tie194333 6 tie198633 6 tie200033 9196729 10199525 1Currrent Streak
Summary:

The headline jobs number in the May employment report was above expectations and April and May payrolls were revised up by 16,000 combined.   The participation rate decreased, the employment population ratio was unchanged, and the unemployment rate was decreased to 4.1%.
This was a solid employment report; however, a surprising number of state and local education employees were hired in June (63.5 thousand).  

From the BLS: Employment Situation

Total nonfarm payroll employment increased by 147,000 in June, and the unemployment rate changed little at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in state government and health care. Federal government continued to lose jobs.
...
The change in total nonfarm payroll employment for April was revised up by 11,000, from +147,000 to +158,000, and the change for May was revised up by 5,000, from +139,000 to +144,000. With these revisions, employment in April and May combined is 16,000 higher than previously reported.
emphasis added

Click on graph for larger image.

The first graph shows the jobs added per month since January 2021.

Total payrolls increased by 147 thousand in June.  Private payrolls increased by 74 thousand, and public payrolls increased 73 thousand (Federal payrolls decreased 7 thousand).

Payrolls for April and May were revised up by 16 thousand, combined.
The second graph shows the year-over-year change in total non-farm employment since 1968.

In June, the year-over-year change was 1.81 million jobs.  Employment was up solidly year-over-year.

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate decreased to 62.3% in June, from 62.4% in May. This is the percentage of the working age population in the labor force.

The Employment-Population ratio was unchanged at 59.7% from 59.7% in May (blue line).
I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate.

The unemployment rate was decreased to 4.1% in June from 4.2% in May.

This was above consensus expectations and April and May payrolls were revised up by 16,000 combined.  
I'll have more later ...

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Thursday:
• At 8:30 AM ET, Employment Report for June.   The consensus is for 129,000 jobs added, and for the unemployment rate to be unchanged at 4.2%.

• Also at 8:30 AM, The initial weekly unemployment claims report will be released. The consensus is for initial claims to increase to 239 thousand from 236 thousand last week.

• Also at 8:30 AM, Trade Balance report for May from the Census Bureau. The consensus is the trade deficit to be $69.8 billion.  The U.S. trade deficit was at $61.6 billion the previous month.

• At 10:00 AM, the ISM Services Index for June.   The consensus is for a reading of 50.8, up from 49.9.

• All US markets will close early at 1:00 PM ET in observance of Independence Day

On Thursday at 8:30 AM ET, the BLS will release the employment report for June. The consensus is for 129,000 jobs added, and for the unemployment rate to be unchanged at 4.2%. There were 139,000 jobs added in May, and the unemployment rate was at 4.2%.

From Goldman Sachs:

We do not place much weight on the ADP miss because of ADP’s limited correlation with BLS private payrolls over the last few years. We left our forecast for June nonfarm payroll growth unchanged at +85k ahead of tomorrow’s release. ... We expect payroll growth to slow from its 135k 3-month average because big data indicators were soft ... We forecast that the unemployment rate edged up to 4.3%—a low bar from an unrounded 4.24%—reflecting sequential increases in other measures of labor market slack.
emphasis added

From BofA:

June NFP are likely to rise by 95k. Although the initial claims increase in recent weeks can be attributed to seasonal volatility, continuing claims were also high during the survey week. We also see headwinds from weak college graduates hiring and summer job cuts for education & health workers. Additionally, leisure & hospitality job growth tends to slow in June when Memorial Day falls relatively earlier in the month in May (like this year). We expect the u-rate to rise a tenth to 4.3%.

• ADP Report: The ADP employment report showed 33,000 private sector jobs were lost in June.  This was well below consensus forecasts and suggests job gains below consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report.

• ISM Surveys: Note that the ISM indexes are diffusion indexes based on the number of firms hiring (not the number of hires).  The ISM® manufacturing employment index was at 45.0%, down from 46.8% the previous month.   This would suggest jobs lost in manufacturing. The ADP report indicated 15,000 manufacturing jobs added in June.

The ISM® services employment index for June will be released tomorrow.

• Unemployment Claims: The weekly claims report showed more initial unemployment claims during the reference week at 246,000 in June compared to 226,000 in May.  This suggests layoffs in June were higher than in May.

• Strikes: The CES strike report shows 5,600 employees returned from strikes during the reference period in June. This will boost the headline jobs number a little.

• Conclusion: Over the last year, employment gains averaged 144 thousand per month - and that was probably the trend prior to policy changes.  However, my guess is we will start to see the impact of policy uncertainty - a little more hiring hesitancy - and I'll take the under for June.

Today, in the Real Estate Newsletter: Asking Rents Mostly Unchanged Year-over-year

Brief excerpt:

Another monthly update on rents.

Tracking rents is important for understanding the dynamics of the housing market. Slower household formation and increased supply (more multi-family completions) has kept asking rents under pressure.

More recently, immigration policy has become a negative for rentals.

Apartment List: Asking Rent Growth -0.7% Year-over-year ...

The national multifamily vacancy rate currently stands at 7%, the highest reading we've recorded in our index. We're past the peak of a multifamily construction surge, but the market is still absorbing all of the new units, and vacancies are still trending up.

Realtor.com: 22nd Consecutive Month with Year-over-year Decline in Rents

In May 2025, U.S. median rent posted its 22nd consecutive year-over-year decline, dropping 1.7% for 0-2 bedroom properties across the 50 largest metropolitan areas.

This is much more in the article.

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the June 2025 seasonally adjusted annual sales rate (SAAR) of 435 thousand.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Click on graph for larger image.

Heavy truck sales were at 435 thousand SAAR in June, down from 450 thousand in May, and down 1.4% from 442 thousand SAAR in June 2024.
This is the lowest sales rate since January 2022.  
Year-to-date (NSA) sales are down 6.2%.
Usually, heavy truck sales decline sharply prior to a recession and sales were a little soft recently.  

The BEA reported this morning that light vehicle sales were at 15.34 million in June on a seasonally adjusted annual rate basis (SAAR).

This was down 1.7% from the sales rate in May, and up 2.3% from June 2024.

Note that sales in June 2024 were depressed by a cyberattack impacting dealers’ online systems. This makes the YoY comparison look better.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) through June (red).
Vehicle sales were over 17 million SAAR in March and April as consumers rushed to "beat the tariffs".

Since then, sales have declined for two consecutive months.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Sales in June were below the consensus forecast of 15.5 million SAAR.

From ADP: ADP National Employment Report: Private Sector Employment Shed 33,000 Jobs in June; Annual Pay was Up 4.4%

“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” said Dr. Nela Richardson, chief economist, ADP. “Still, the slowdown in hiring has yet to disrupt pay growth.”
emphasis added

This was well below the consensus forecast of 110,000 jobs added. The BLS report will be released Thursday, and the consensus is for 129,000 non-farm payroll jobs added in June.

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 27, 2025. Last week’s results included an adjustment for the Juneteenth holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 13 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week and was 40 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 0.1 percent from one week earlier. The unadjusted Purchase Index increased 10 percent compared with the previous week and was 16 percent higher than the same week one year ago.

“Mortgage rates were lower across all loan types last week, with the 30-year fixed rate declining to its lowest level since April at 6.79 percent. This decline prompted an increase in refinance applications, driven by a 10 percent increase in conventional applications and a 22 percent increase in VA refinance applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “As borrowers with larger loans tend to be more sensitive to rate changes, the average loan size for a refinance application increased to $313,700 after averaging less than $300,000 for the past six weeks. Purchase activity was essentially flat over the week, as overall uncertainty continues to hold homebuyers out of the market. However, purchase activity still remains 16 percent higher than last year’s pace.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.79 percent from 6.88 percent, with points decreasing to 0.62 from 0.63 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 16% year-over-year unadjusted. 
Red is a four-week average (blue is weekly).  
Purchase application activity is still depressed, but above the lows of October 2023 and is 10% above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index increased but remained very low.

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Wednesday:
• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 8:15 AM, The ADP Employment Report for June. This report is for private payrolls only (no government). The consensus is for 110,000 payroll jobs added in June, up from 37,000 in May.

From Cotality (formerly CoreLogic): US home price insights — July 2025

Spring homebuying season continues to be defined by slower price growth and tepid home buying activity.

• Year-over-year price growth dipped to 1.8% in May 2025, down from 5% price growth last May and slowest since the winter of 2012.

• Seasonal increase in home prices continues to be weak, up 0.3% compared to the month before, and less than half of 0.8% increase typically seen between April and May

• In more affordable Midwestern markets, such as Indianapolis, Kansas City, and Knoxville, as well as markets surrounding New York metro, seasonal gains in May continued to outperform pre-pandemic trends

• Illinois, up 6.4% year-over-year entered the top 5 states with the highest home price growth, following Rhode Island, New Jersey, Wyoming and Connecticut which all continue to record more than triple the national rate of price growth

• Florida, Texas, Hawaii, and Washington D.C. reported negative home price growth.
emphasis added

House prices are under pressure with more inventory and sluggish sales.

From the Census Bureau reported that overall construction spending decreased:

Construction spending during May 2025 was estimated at a seasonally adjusted annual rate of $2,138.2 billion, 0.3 percent below the revised April estimate of $2,145.5 billion. The May figure is 3.5 percent below the May 2024 estimate of $2,215.4 billion.
emphasis added

Private spending decreased and public spending increased slightly:

Spending on private construction was at a seasonally adjusted annual rate of $1,626.6 billion, 0.5 percent below the revised April estimate of $1,634.2 billion. ...

In May, the estimated seasonally adjusted annual rate of public construction spending was $511.6 billion, 0.1 percent above the revised April estimate of $511.3 billion.

Click on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Private residential (red) spending is 9.2% below the peak in 2022.

Private non-residential (blue) spending is 6.8% below the peak in December 2023.

Public construction spending (orange) is slightly below the peak of October 2024.

The second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is down 6.7%. Private non-residential spending is down 3.9% year-over-year. Public spending is up 3.3% year-over-year.

This was below consensus expectations and spending for the previous two months were revised down.