Weekend:
• Schedule for Week of September 14, 2025

• FOMC Preview: 25bps Rate Cut Expected

Monday:
• At 8:30 AM ET, The New York Fed Empire State manufacturing survey for September. The consensus is for a reading of 4.0, down from 11.9.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 9 and DOW futures are up 82 (fair value).

Oil prices were up over the last week with WTI futures at $62.93 per barrel and Brent at $67.21 per barrel. A year ago, WTI was at $70, and Brent was at $74 - so WTI oil prices are down about 10% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.12 per gallon. A year ago, prices were at $3.15 per gallon, so gasoline prices are down $0.03 year-over-year.

Most analysts expect the FOMC the reduce the Fed Funds rate by 25bps at the meeting this week, to a target range of 4 to 4 1/4 percent.    Market participants currently expect the FOMC to also cut rates an additional 25bps at both the October and December meetings.
From BofA:

We expect the Fed to cut rates by 25bp to 4.0-4.25% at its September meeting. We look for two changes in the description of current conditions in the first paragraph of the FOMC statement. The reference to swings in net exports should be removed, though some version of the text saying “growth of economic activity moderated in the first half of the year” will probably stay. More importantly, the description of labor market conditions is likely to be downgraded. The FOMC might opt for language similar to last September: “Job gains have slowed, and the unemployment rate has moved up but remains low.”
...
The economic forecasts from the June SEP have aged remarkably well. Growth could get marked up by a tenth for this year, but the out years should stay roughly unchanged. We don’t see any need to tinker with the path of the unemployment rate, since it is on track to reach the Fed’s 4Q projection of 4.5%.
emphasis added

Projections will be released at this meeting. For review, here are the June projections.  
Since the last projections were released, economic growth, the unemployment rate and inflation all have been close to expectations.
The BEA's estimate for first half 2025 GDP showed real growth at 1.4% annualized. Most estimates for Q3 GDP are around 1.7%.  That would put the real growth for the first three quarters at 1.5% annualized - at the top of end of the June projections.  It is possible the FOMC will revise up Q4 2025 GDP growth slightly.
GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1 Projection Date202520262027 Jun 20251.2 to 1.51.5 to 1.81.7 to 2.0Mar 20251.5 to 1.91.6 to 1.91.6 to 2.0 1 Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.

The unemployment rate was at 4.3% in August.  The unemployment rate will likely increase further this year, and it is possible the FOMC will revise up the Q4 2025 unemployment rate slightly.
Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2 Projection Date202520262027 Jun 20254.4 to 4.54.3 to 4.64.2 to 4.6Mar 20254.3 to 4.44.2 to 4.54.1 to 4.4 2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of July 2025, PCE inflation increased 2.6% year-over-year (YoY), unchanged from 2.6% YoY in June. There will likely be some further increases in the 2nd half of 2025, but the forecast range is probably reasonable.
Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1 Projection Date202520262027 Jun 20252.8 to 3.22.3 to 2.62.0 to 2.2Mar 20252.6 to 2.92.1 to 2.32.0 to 2.1
PCE core inflation increased 2.9% YoY in July, up from 2.8% YoY in June.  There will likely be further increase in core PCE inflation, but the projections will likely remain mostly the same.
Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1 Projection Date202520262027 Jun 20252.9 to 3.42.3 to 2.72.0 to 2.2Mar 20252.7 to 3.02.1 to 2.42.0 to 2.1

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Part 1: Current State of the Housing Market; Overview for mid-September 2025

• Part 2: Current State of the Housing Market; Overview for mid-September 2025

• The "Home ATM" Mostly Closed in Q2

• 1st Look at Local Housing Markets in August

• September ICE Mortgage Monitor: House Prices Up Slightly Year-over-year

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

The key reports this week are August Retail Sales and Housing Starts.

For manufacturing, August Industrial Production, and the September New York and Philly Fed surveys will be released this week.

The FOMC meets this week and is expected to cut rates.

----- Monday, September 15th -----
8:30 AM ET: The New York Fed Empire State manufacturing survey for September. The consensus is for a reading of 4.0, down from 11.9.

----- Tuesday, September 16th -----
8:30 AM ET: Retail sales for August will be released.  The consensus is for a 0.3% increase in retail sales.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for August.

This graph shows industrial production since 1967.

The consensus is for no change in Industrial Production, and for Capacity Utilization to decrease to 77.4%.

10:00 AM: The September NAHB homebuilder survey. The consensus is for a reading of 33, up from 32 in August. Any number below 50 indicates that more builders view sales conditions as poor than good.

----- Wednesday, September 17th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: Housing Starts for August.

This graph shows single and total housing starts since 1968.

The consensus is for 1.375 million SAAR, down from 1.428 million SAAR.

2:00 PM: FOMC Meeting Announcement. The Fed is expected to cut rates 25bp at this meeting.

2:00 PM: FOMC Forecasts This will include the Federal Open Market Committee (FOMC) participants' projections of the appropriate target federal funds rate along with the quarterly economic projections.

2:30 PM: Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.

----- Thursday, September 18th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims to decrease to 240 thousand from 263 thousand last week.

8:30 AM: the Philly Fed manufacturing survey for September. The consensus is for a reading of 2.5, up from 0.0.

----- Friday, September 19th -----
10:00 AM: State Employment and Unemployment (Monthly) for August 2025

Hotel occupancy was weak over the summer months, likely due to less international tourism.  The fall months are mostly domestic travel.

From STR: U.S. hotel results for week ending 6 September

The U.S. hotel industry reported negative year-over-year comparisons, according to CoStar’s latest data through 6 September. ...

31 August through 6 September 2025 (percentage change from comparable week in 2024):

• Occupancy: 57.7% (-0.5%)
• Average daily rate (ADR): US$149.52 (-0.2%)
• Revenue per available room (RevPAR): US$86.20 (-0.7%)
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 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 during the Fall travel period.
On a year-to-date basis, the only worse years for occupancy over the last 25 years were pandemic or recession years.

Today, in the Calculated Risk Real Estate Newsletter: Part 2: Current State of the Housing Market; Overview for mid-September 2025

A brief excerpt:

On Wednesday, in Part 1: Current State of the Housing Market; Overview for mid-September 2025 I reviewed home inventory, housing starts and sales. I noted that the key stories this year for existing homes are that inventory increased sharply, and sales are down slightly year-to-date compared to last year (and sales in 2024 were the lowest since 1995). That means prices are under pressure.

In Part 2, I will look at house prices, mortgage rates, rents and more.

As I noted last week, the house price trend suggests house prices will be down year-over-year by the end of 2025. However, there are two new powerful forces pushing in opposite directions - mortgage rates have declined, and unemployment is increasing. Both could impact sales and house prices.

Earlier this week, Cotality’s Chief Economist Dr. Selma Hepp (formerly CoreLogic) wrote: “July’s decline in home prices is atypical — the last two periods where we saw monthly declines in July was in 2022 and during 2006-2008 period …” In 2022, house prices fell briefly as mortgage rates surged higher, and inventory increased sharply. And the 2006-2008 period was the start of the housing bust.
...
The Case-Shiller National Index increased 1.9% year-over-year (YoY) in June and will likely be lower year-over-year in the July report compared to June (based on other data).
...
In the January report, the Case-Shiller National index was up 4.2%, in February up 3.9%, in March up 3.4%, in April report up 2.7%, in May up 2.3% and in June up 1.9%.

And the June Case-Shiller index was a 3-month average of closing prices in April, May and June. April closing prices include some contracts signed in February.

So, not only is this trending down, but there is a significant lag to this data.

There is much more in the article.

From BofA:

Since our last weekly publication, 3Q GDP tracking is up a tenth to 1.7% q/q saar and 2Q GDP tracking is unchanged at 3.2%. Here are the details to our tracking changes. [September 12th comment]
emphasis added

From Goldman:

Our Q3 GDP forecast stands at +1.6% (quarter-over-quarter annualized). [September 10th estimate]

And from the Atlanta Fed:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2025 is 3.1 percent on September 10, up from 3.0 percent on September 4. After recent releases from the US Bureau of Labor Statistics and the US Census Bureau, increases in the nowcasts of real personal consumption expenditures growth and real gross private domestic investment growth from 2.1 percent and 6.0 percent, respectively, to 2.3 percent and 6.2 percent, were partly offset by a decline in the nowcast of the contribution of net exports to GDP growth from 0.28 percentage points to 0.23 percentage points. [September 10th estimate]

The BLS reported yesterday:

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.8 percent over the last 12 months to an index level of 317.306 (1982-84=100). For the month, the index increased 0.3 percent prior to seasonal adjustment.

CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). The calculation dates have changed over time (see Cost-of-Living Adjustments), but the current calculation uses the average CPI-W for the three months in Q3 (July, August, September) and compares to the average for the highest previous average of Q3 months. Note: this is not the headline CPI-U and is not seasonally adjusted (NSA).

• In 2024, the Q3 average of CPI-W was 308.729.

The 2024 Q3 average was the highest Q3 average, so we only have to compare Q3 this year to last year.

Click on graph for larger image.

This graph shows CPI-W since January 2000. The red lines are the Q3 average of CPI-W for each year.

Note: The year labeled is for the calculation, and the adjustment is effective for December of that year (received by beneficiaries in January of the following year).

CPI-W was up 2.8% year-over-year in August (up from 2.5% YoY in July), and although this is early - we need the data for July, August and September - my guess is COLA will probably be around 2.8% this year, up from 2.5% in 2025.
Contribution and Benefit Base

The contribution base will be adjusted using the National Average Wage Index. This is based on a one-year lag. The National Average Wage Index is not available for 2024 yet, although we know wages increased solidly in 2024. If wages increased 5% in 2024, then the contribution base next year will increase to around $185,000 in 2026, from the current $176,100.

Remember - this is an early look. What matters is average CPI-W, NSA, for all three months in Q3 (July, August and September).

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

Friday:
• At 10:00 AM, University of Michigan's Consumer sentiment index (Preliminary for September).

Today, in the Calculated Risk Real Estate Newsletter: The "Home ATM" Mostly Closed in Q2

A brief excerpt:

During the housing bubble, many homeowners borrowed heavily against their perceived home equity - jokingly calling it the “Home ATM” - and this contributed to the subsequent housing bust, since so many homeowners had negative equity in their homes when house prices declined.
...
Here is the quarterly increase in mortgage debt from the Federal Reserve’s Financial Accounts of the United States - Z.1 (sometimes called the Flow of Funds report) released today. In the mid ‘00s, there was a large increase in mortgage debt associated with the housing bubble.

In Q2 2025, mortgage debt increased $108 billion, up from $44 billion in Q1. Note the almost 7 years of declining mortgage debt as distressed sales (foreclosures and short sales) wiped out a significant amount of debt.

However, some of this debt is being used to increase the housing stock (purchase new homes), so this isn’t all Mortgage Equity Withdrawal (MEW).

The Federal Reserve released the Q2 2025 Flow of Funds report today: Financial Accounts of the United States.

The net worth of households and nonprofits rose to $176.3 trillion during the second quarter of 2025. The value of directly and indirectly held corporate equities increased $5.5 trillion and the value of real estate increased $1.2 trillion.
...
Household debt increased 3.8 percent at an annual rate in the second quarter of 2025. Consumer credit grew at an annual rate of 2.8 percent, while mortgage debt (excluding charge-offs) grew at an annual rate of 3.3 percent.

Click on graph for larger image.

The first graph shows Households and Nonprofit net worth as a percent of GDP.  
Net worth increased $7.1 trillion in Q2.  As a percent of GDP, net worth increased in Q2 but is still below the peak in 2021.
This includes real estate and financial assets (stocks, bonds, pension reserves, deposits, etc.) net of liabilities (mostly mortgages). Note that this does NOT include public debt obligations.

The second graph shows homeowner percent equity since 1952.

Household percent equity (as measured by the Fed) collapsed when house prices fell sharply in 2007 and 2008.

In Q2 2025, household percent equity (of household real estate) was at 72.6% - up from 72.0% in Q1, 2025

Note: This includes households with no mortgage debt.

The third graph shows household real estate assets and mortgage debt as a percent of GDP.  

Mortgage debt increased by $108 billion in Q2.

Mortgage debt is up $2.88 trillion from the peak during the housing bubble, but, as a percent of GDP is at 44.6% - down from Q1 - and down from a peak of 73.1% of GDP during the housing bust.

The value of real estate, as a percent of GDP, increased in Q2 and is below the recent peak in Q2 2022, but is well above the median of the last 30 years.

The Cleveland Fed released the median CPI and the trimmed-mean CPI.

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% in August. The 16% trimmed-mean Consumer Price Index increased 0.3%. "The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report".

Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. 
On a year-over-year basis, the median CPI rose 3.6% (unchanged from 3.6% YoY in July), the trimmed-mean CPI rose 3.3% (up from 3.2%), and the CPI less food and energy rose 3.1% (unchanged from 3.1%). 
Core PCE is for July was up 2.9% YoY, up from 2.8% in June.  

Here are a few measures of inflation:

The first graph is the one Fed Chair Powell had mentioned two years ago as something to watch.  

Click on graph for larger image.

This graph shows the YoY price change for Services and Services less rent of shelter through August 2025.
Services were up 4.0% YoY as of August 2025, unchanged from 4.0% YoY in July.

Services less rent of shelter was up 3.8% YoY in August, unchanged from 3.8% YoY the previous month.
The second graph shows that goods prices started to increase year-over-year (YoY) in 2020 and accelerated in 2021 due to both strong demand and supply chain disruptions.
Now the YoY change in prices is increasing due to tariffs.

Durables were up 1.9% YoY as of August 2025, up from 1.2% YoY the previous month.

Commodities less food and energy commodities were at 1.5% YoY in August, up from 1.1% YoY the previous month.
Here is a graph of the year-over-year change in shelter from the CPI report (through August) and housing from the PCE report (through July)

Shelter was up 3.6% year-over-year in August, down from 3.7% in July. Housing (PCE) was up 4.0% YoY in July, down from 4.1% in June.
This is still catching up with private new lease data (this includes renewals whereas private data is mostly for new leases).
Core CPI ex-shelter was up 2.7% YoY in August, up from 2.5% YoY in July.

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent on a seasonally adjusted basis in August, after rising 0.2 percent in July, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment.

The index for shelter rose 0.4 percent in August and was the largest factor in the all items monthly increase. The food index increased 0.5 percent over the month as the food at home index rose 0.6 percent and the food away from home index increased 0.3 percent. The index for energy rose 0.7 percent in August as the index for gasoline increased 1.9 percent over the month.

The index for all items less food and energy rose 0.3 percent in August, as it did in July. Indexes that increased over the month include airline fares, used cars and trucks, apparel, and new vehicles. The indexes for medical care, recreation, and communication were among the few major indexes that decreased in August.

The all items index rose 2.9 percent for the 12 months ending August, after rising 2.7 percent over the 12 months ending July. The all items less food and energy index rose 3.1 percent over the last 12 months. The energy index increased 0.2 percent for the 12 months ending August. The food index increased 3.2 percent over the last year.
emphasis added

The change in CPI was above expectations. I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.

The DOL reported:

In the week ending September 6, the advance figure for seasonally adjusted initial claims was 263,000, an increase of 27,000 from the previous week's revised level. This is the highest level for initial claims since October 23, 2021 when it was 268,000. The previous week's level was revised down by 1,000 from 237,000 to 236,000. The 4-week moving average was 240,500, an increase of 9,750 from the previous week's revised average. The previous week's average was revised down by 250 from 231,000 to 230,750.
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 increased to 240,500.

The previous week was revised down.

Weekly claims were well above the consensus forecast.

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

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for initial claims to increase to 240 thousand from 237 thousand last week.

• Also at 8:30 AM, The Consumer Price Index for August from the BLS. The consensus is for a 0.3% increase in CPI, and a 0.3% increase in core CPI.  The consensus is for CPI to be up 2.9% year-over-year (up from 2.7% in July) and core CPI to be up 3.1% YoY (unchanged from 3.1% in July).

• At 12:00 PM, Q2 Flow of Funds Accounts of the United States from the Federal Reserve.

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

The 2025 spring homebuyers season ended softly, with slower price growth dominating the narrative and potentially opening the door to more buyers.

• Year-over-year price growth dipped to 1.4% in July 2025. This is almost half the rate of inflation recorded in the Consumer Price Index that month.

• Monthly price increases have been nominal this year and were in negative territory (down 0.2%) between June and July 2025.

• South Dakota saw prices rise 6.2% year-over-year, entering the top 5 states with the highest home price growth. The full list includes New Jersey, South Dakota, Connecticut, Rhode Island, and West Virginia , all of which continue to record more than triple the national rate of price growth.

• Florida, Texas, Montana, and Washington D.C. reported negative home price growth.
...
“July’s decline in home prices is atypical — the last two periods where we saw monthly declines in July was in 2022 and during 2006-2008 period — but this year’s decline follows a year of relatively flat home prices and persistent weakness in homebuying demand,” Cotality’s Chief Economist Dr. Selma Hepp explained. “And even though price weakness has spread across more markets, 50% continue to see prices increase. The markets where prices are increasing tend to be more affordable markets in Midwest, such as the Chicago metro; Indianapolis; Cleveland; Tulsa OK; and Louisville, KY; as well as Philadelphia and the New York metro. At the same time, Florida markets and those in the West continue to see persistent price declines.”
emphasis added

This graph from Cotality shows the Top 10 coolest markets.
The list is dominated by Florida and Texas.  According to Cotality, the highest risk markets are all in Florida.
House prices are under pressure with more inventory and sluggish sales.

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-September 2025

A brief excerpt:

This 2-part overview for mid-September provides a snapshot of the current housing market.

The key stories this year for existing homes are that inventory increased sharply, and sales are down slightly compared to last year (and sales in 2024 were the lowest since 1995). That means prices are under pressure (although there will not be a huge wave of distressed sales). It now appears existing home prices will be down nationally year-over-year by the end of 2025. ...

Realtor.com reports in the August 2025 Monthly Housing Market Trends Report that new listings were up 4.9% year-over-year in July. And active listings were up 20.9% year-over-year.

Homebuyers found more options in August, as the number of actively listed homes rose 20.9% compared to the same time last year. While this marks the 22nd consecutive month of year-on-year inventory gains, active listing growth has slowed in each of the past three months (down from 24.8% in July, 28.9% in June, and 31.5% in May. The number of homes for sale topped 1 million for the fourth consecutive month, but declined slightly since July. Still, nationwide, August inventory remains 14.3% below typical 2017–19 levels, a gap that has widened from as low as 12.9% in June, an indication that the nationwide inventory recovery is moving in the wrong direction.

There is much more in the article.

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

Mortgage applications increased 9.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 5, 2025. This week’s results include an adjustment for the Labor Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 9.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index increased 12 percent from the previous week and was 34 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 7 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 23 percent higher than the same week one year ago.

“Mortgage rates declined for the second consecutive week as Treasury yields moved lower on data indicating that the labor market is weakening. The 30-year fixed rate decreased to 6.49 percent, down 20 basis points over the past two weeks to the lowest since October 2024,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The downward rate movement spurred the strongest week of borrower demand since 2022, with both purchase and refinance applications moving higher. Purchase applications increased to the highest level since July and continued to run more than 20 percent ahead of last year’s pace. There was also a pickup in ARM applications, both in terms of level and share, as ARM rates were considerably lower than fixed rate loans, which typically benefits homebuyers.”

Added Kan, “The holiday-adjusted refinance index had its strongest week in a year and the average loan size for refinances also increased significantly, since borrowers with large loans are more sensitive to bigger rate moves. Refinance applications accounted for almost 49 percent of all applications last week.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.49 percent from 6.64 percent, with points decreasing to 0.56 from 0.59 (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 23% 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 slightly above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index has increased from the bottom but remains 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 8:30 AM, The Producer Price Index for August from the BLS. The consensus is for a 0.3% increase in PPI, and a 0.3% increase in core PPI.