Bill McBride
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Articles by Bill McBride
How Much will the Fannie & Freddie Conforming Loan Limit Change for 2027?
With house prices up low-single digits over the last year through mid-year, an interesting question is: How much will the Fannie & Freddie conforming loan limits (CLL) change for 2027? And how much will the FHA insured loan limits change? First, there are different loan limits for various geographical areas. There are also different loan limits depending on the number of units (from 1 to 4 units). For example, currently the CLL is $832,750 for one-unit properties in most areas.
Asking Rents Decline Year-over-year
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 for the last few years. More recently, immigration policy is a negative for rentals.
Fannie Mae Multi-Family Delinquency Rate Almost to Housing Bust High
Freddie Mac reported that the Single-Family serious delinquency rate in November was 0.58%, up from 0.56% October. Freddie's rate is up year-over-year from 0.56% in November 2024, however, this is below the pre-pandemic level of 0.60%. Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble and peaked at 3.17% in August 2020 during the pandemic.
Mortgage Rates: The New Normal
In June 2023, I wrote: Could 6% to 7% 30-Year Mortgage Rates be the "New Normal"? At that time, the Fed Funds rate was set at 5 to 5-1/4 percent and the Ten Year Treasury was yielding 3-3/4%. I noted in 2023: “the 10-year yield would likely increase even as the Fed lowers the Fed Funds rate.” And that is what happened. The 10-year is yielding 4-1/4% this morning. This is a key point. Just because the FOMC is cutting rates, doesn’t necessarily mean long rates will follow.
Asking Rents Soft Year-over-year
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 for the last few years. More recently, immigration policy has become a negative for rentals.
Inflation Adjusted House Prices 3.0% Below 2022 Peak
It has been 19 years since the housing bubble peak, ancient history for many readers! In the September Case-Shiller house price index released last Tuesday, the seasonally adjusted National Index (SA), was reported as being 78% above the bubble peak. However, in real terms, the National index (SA) is about 9.4% above the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is 0.9% above the bubble peak.
House Prices to Income
One of the metrics we'd like to follow is a ratio of house prices to incomes. Unfortunately most income data is released with a significantly lag, and there are always questions about which income data to use (the average total income is skewed by the income of a few people). And for key measures of house prices - like Case-Shiller - we have indexes, not actually prices. But we can construct a ratio of the house price indexes to some measure of income.
Freddie Mac House Price Index Up 1.0% Year-over-Year in September
Note: The Freddie Mac index is a repeat sales index using only loans purchased by Fannie and Freddie and includes appraisals. See FAQs here. Freddie has data for all states and many cities. For house prices, I’m currently following Case-Shiller, FHFA, CoreLogic, ICE, the NAR median prices, and this Freddie Mac index. Freddie Mac reported that its “National” Home Price Index (FMHPI) decreased 0.04% month-over-month (MoM) on a seasonally adjusted (SA) basis in September.
Asking Rents Mostly Unchanged Year-over-year
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 for the last few years. More recently, immigration policy has become a negative for rentals.
Freddie Mac House Price Index Up 1.6% Year-over-Year
Note: The Freddie Mac index is a repeat sales index using only loans purchased by Fannie and Freddie and includes appraisals. See FAQs here. Freddie has data for all states and many cities. For house prices, I’m currently following Case-Shiller, FHFA, CoreLogic, ICE, the NAR median prices, and this Freddie Mac index. Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.10% month-over-month (MoM) on a seasonally adjusted (SA) basis in August.
Q2 Update: Delinquencies, Foreclosures and REO
Even with the recent weakness in house prices, it is important to note that there will NOT be a surge in foreclosures that could lead to cascading house price declines (as happened following the housing bubble) for two key reasons: 1) mortgage lending has been solid, and 2) most homeowners have substantial equity in their homes. With substantial equity, and low mortgage rates (mostly at a fixed rates), few homeowners will have financial difficulties.
New Home Sales at 652,000 Annual Rate in July
The Census Bureau reports New Home Sales in July were at a seasonally adjusted annual rate (SAAR) of 652 thousand. The previous three months were revised up. Sales of new single-family houses in July 2025 were at a seasonally-adjusted annual rate of 652,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.6 percent below the June 2025 rate of 656,000, and is 8.2 percent below the July 2024 rate of 710,000.
Asking Rents Mostly Unchanged Year-over-year
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 for the last few years. More recently, immigration policy has become a negative for rentals.
Freddie Mac House Price Index Declined in May; Up 2.2% Year-over-year
Note: The Freddie Mac index is a repeat sales index using only loans purchased by Fannie and Freddie and includes appraisals. See FAQs here. Freddie has data for all states and many cities. For house prices, I’m currently following Case-Shiller, FHFA, CoreLogic, ICE, the NAR median prices, and this Freddie Mac index. Freddie Mac reported that its “National” Home Price Index (FMHPI) decreased -0.23% month-over-month (MoM) on a seasonally adjusted (SA) basis in May.
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In Q1 2025, 19% of Units Started Built-for-Rent were Single Family
Along with the monthly housing starts report for April released last week, the Census Bureau also released Housing Units Started and Completed by Purpose and Design through Q1 2025. The first graph shows the number of single family and multi-family units started with the intent to rent. This data is quarterly and Not Seasonally Adjusted (NSA).
3rd Look at Local Housing Markets in April
This data suggests sales will be down year-over-year for the 3rd consecutive month in April, and that sales-to-date in 2025 are trailing sales in 2024 - and 2024 was the lowest sales year since 1995! Also, it seems sales in April might have a 3 handle (be under 4 million). This is the third look at several early reporting local markets in April. I’m tracking over 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas.
ICE Mortgage Monitor: Home Prices Continue to Cool
Here is the ICE April Mortgage Monitor report (pdf). Press Release: ICE Mortgage Monitor: First-Time Homebuyers Comprise Record Share of Agency Purchase Lending in Q1 2025 Intercontinental Exchange, Inc. … today released its May 2025 Mortgage Monitor Report, which delves into the rising share of first-time and Gen Z homebuyer participation in the mortgage market.
Housing and Demographics
One of the keys for housing demand is demographics. This month the Census Bureau released their estimates of the U.S. population by age for July 2024. The following graph is based on the release for 2024. Note that the largest age group is in their early-to-mid 30s. There are still a number of younger Boomers in their early-to-mid 60s. I’ll return to the above graph and discuss some of the implications for the next decade, but first, here is a similar graph for July 2010.
Housing Starts Increased to 1.501 million Annual Rate in February
From the Census Bureau: Permits, Starts and Completions Housing Starts: Privately-owned housing starts in February were at a seasonally adjusted annual rate of 1,501,000. This is 11.2 percent above the revised January estimate of 1,350,000, but is 2.9 percent below the February 2024 rate of 1,546,000. Single-family housing starts in February were at a rate of 1,108,000; this is 11.4 percent above the revised January figure of 995,000.
ICE Mortgage Monitor: Property Insurance Costs Rose at a Record Rate in 2024
Here is the ICE March Mortgage Monitor report (pdf).
New Home Sales Increase to 698,000 Annual Rate in December
The Census Bureau reports New Home Sales in December were at a seasonally adjusted annual rate (SAAR) of 698 thousand. The previous three months were revised down slightly, combined. Sales of new single-family houses in December 2024 were at a seasonally adjusted annual rate of 698,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
1.73 million Total Housing Completions in 2024 including Manufactured Homes; Most Since 2006
Although total housing starts decreased 3.9% in 2024 compared to 2023, completions increased sharply year-over-year. There were 1.731 million total completions and placements in 2024, up 12.5% compared to 2023, and the most since 2006. Not counting Manufactured homes, there are 1.628 million completions in 2024, up 12.4% from 1.449 million in 2023, and also the most since 2006. This graph shows total housing completions and placements since 1968 through2024.
FHFA Announces Baseline Conforming Loan Limit Will Increase to $806,500
After the release of the FHFA house price index for September last week, the FHFA released the conforming loan limits for 2025. From the FHFA: FHFA Announces Conforming Loan Limit Values for 2025 The Federal Housing Finance Agency (FHFA) today announced the conforming loan limit values (CLLs) for mortgages acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2025.
In Q2, almost 20% of Units Started Built-for-Rent were Single Family
Along with the monthly housing starts report for September released last month, the Census Bureau also released Housing Units Started by Purpose and Design through Q2 2024. The first graph shows the number of single family and multi-family units started with the intent to rent. This data is quarterly and Not Seasonally Adjusted (NSA). Although the majority of units built-for-rent’ are still multi-family (blue), there has been a significant pickup in single family units started built-for-rent (red).
Fannie and Freddie: Single Family and Multi-Family Serious Delinquency Rates Increased in September
Single-family serious delinquencies increased slightly in September, and multi-family serious delinquencies increased. Freddie Mac reported that the Single-Family serious delinquency rate in September was 0.54%, up from 0.52% August. Freddie's rate is down slightly year-over-year from 0.55% in September 2023. This is below the pre-pandemic lows. Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble and peaked at 3.17% in August 2020 during the pandemic.
Case-Shiller: National House Price Index Up 4.2% year-over-year in August
S&P/Case-Shiller released the monthly Home Price Indices for August ("August" is a 3-month average of June, July and August closing prices). August closing prices include some contracts signed in April, so there is a significant lag to this data. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).
A Proposal to Address the Housing Crisis
Economist Adam Ozimek and John Lettieri (CEO, Economic Innovation Group) have a new proposal to address the housing crisis in the United States: How the next president can solve America’s housing crisis U.S. housing costs are out of control. The median home for sale was rarely more than four times the median household income throughout the 1980s and 1990s. But by 2022, it had risen to nearly six times. Renters have not fared better.
New Home Sales Increase to 738,000 Annual Rate in September
The Census Bureau reported New Home Sales in September were at a seasonally adjusted annual rate (SAAR) of 738 thousand. The previous three months were revised down. Sales of new single-family houses in September 2024 were at a seasonally adjusted annual rate of 738,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
NAR: Existing-Home Sales Decreased to 3.84 million SAAR in September, New Cycle Low
From the NAR: Existing-Home Sales Slid 1.0% in September Existing-home sales drew back in September, according to the National Association of REALTORS®. Three out of four major U.S. regions registered sales declines while the West experienced a sales bounce. Year-over-year, sales fell in three regions but grew in the West.
Lawler: Update on the “Neutral” Rate and Early Read on September Existing Home Sales
From housing economist Tom Lawler: Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 3.83 million in September, down 0.8% from August’s preliminary pace and down 3.8% from last September’s seasonally adjusted pace.
Housing Starts Decreased to 1.354 million Annual Rate in September
From the Census Bureau: Permits, Starts and Completions Housing Starts: Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,354,000. This is 0.5 percent below the revised August estimate of 1,361,000 and is 0.7 percent below the September 2023 rate of 1,363,000. Single-family housing starts in September were at a rate of 1,027,000; this is 2.7 percent above the revised August figure of 1,000,000.
3rd Look at Local Housing Markets in September
NOTE: The tables for active listings, new listings and closed sales all include a comparison to September 2019 for each local market (some 2019 data is not available). This is the third look at several early reporting local markets in September. I’m tracking over 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.
Lawler: Changes in Various Interest Rates Since the FOMC Cut Its Target Fed Funds Rate by 50 Basis Points
From housing economist Tom Lawler: Below is a table showing changes in various interest rates from the day before the FOMC’s 50 basis point cut in its Fed Funds rate target and last Friday. CR Notes: After the Fed rate cut, the longer-term rates increased (including mortgage rates). The yield curve has reverted as this graph from FRED shows (10 year minus 2 year).
2nd Look at Local Housing Markets in September
- by Bill McBride Calculated Risk NOTE: The tables for active listings, new listings and closed sales all include a comparison to September 2019 for each local market (some 2019 data is not available). This is the second look at several early reporting local markets in September. I'm tracking over 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I'll update these tables throughout the month as additional data is released.
2nd Look at Local Housing Markets in September
NOTE: The tables for active listings, new listings and closed sales all include a comparison to September 2019 for each local market (some 2019 data is not available). This is the second look at several early reporting local markets in September. I’m tracking over 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.
Part 1: Current State of the Housing Market; Overview for mid-October 2024
This 2-part overview for mid-October provides a snapshot of the current housing market. I always focus first on inventory, sinceinventory usually tells the tale! And currently inventory is increasing year-over-year but is still well below pre-pandemic levels. Here is a graph of new listing from Realtor.com’s September 2024 Monthly Housing Market Trends Report showing new listings were up 11.6% year-over-year in September.
House Prices to Income
One of the metrics we'd like to follow is a ratio of house prices to incomes. Unfortunately, most income data is released with a significantly lag, and there are always questions about which income data to use (the average total income is skewed by the income of a few people). And for key measures of house prices - like Case-Shiller - we have indexes, not actually prices. But we can construct a ratio of the house price indexes to some measures of income.
1st Look at Local Housing Markets in September
NOTE: The tables for active listings, new listings and closed sales all include a comparison to September 2019 for each local market (some 2019 data is not available). This is the first look at several early reporting local markets in September. I’m tracking over 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.
ICE Mortgage Monitor: Insurance Costs "Spike", Especially in Florida
Former Bear Bill McBride at Calculated Risk is sharing another of his excellent commentaries. This time his focus is on rising homeowner insurance costs. Timely for sure. Helene has gone through the southern states and another hurricane is coming. Insurance costs were up then and will more-than-likely increase again for states bordering the Atlantic. I have noticed our HO Insurance taking a jump also.
Asking Rents Mostly Unchanged Year-over-year
Another monthly update on rents. Tracking rents is important for understanding the dynamics of the housing market. For example, the sharp increase in rents helped me deduce that there was a surge in household formation in 2021 (See from September 2021: Household Formation Drives Housing Demand). Slower household formation and increased supply (more multi-family completions) has kept asking rents under pressure.
FHFA’s National Mortgage Database: Outstanding Mortgage Rates, LTV and Credit Scores
Here are some graphs on outstanding mortgages by interest rate, the average mortgage interest rate, borrowers’ credit scores and current loan-to-value (LTV) from the FHFA’s National Mortgage Database through Q2 2024 (just released). Here is some data showing the distribution of interest rates on closed-end, fixed-rate 1-4 family mortgages outstanding at the end of each quarter since Q1 2013 through Q2 2024.
Freddie Mac House Price Index Increased Slightly in August; Up 3.7% Year-over-year
Over the last 6 months, the seasonal adjusted index has increased at a 1.5% annual rate. by Bill McBride Note: The Freddie Mac index is a repeat sales index using only loans purchased by Fannie and Freddie and includes appraisals. See FAQs here. Freddie has data for all states and many cities. For house prices, I'm currently following Case-Shiller, FHFA, CoreLogic, ICE, the NAR median prices, and this Freddie Mac index.
Freddie Mac House Price Index Increased Slightly in August; Up 3.7% Year-over-year
Note: The Freddie Mac index is a repeat sales index using only loans purchased by Fannie and Freddie and includes appraisals. See FAQs here. Freddie has data for all states and many cities. For house prices, I’m currently following Case-Shiller, FHFA, CoreLogic, ICE, the NAR median prices, and this Freddie Mac index. Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.11% month-over-month on a seasonally adjusted (SA) basis in August.
New Home Sales Decrease to 716,000 Annual Rate in August
The Census Bureau reported New Home Sales in August were at a seasonally adjusted annual rate (SAAR) of 716 thousand. The previous three months were revised up. Sales of new single-family houses in August 2024 were at a seasonally adjusted annual rate of 716,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
Case-Shiller: National House Price Index Up 5.0% year-over-year in July
S&P/Case-Shiller released the monthly Home Price Indices for July ("July" is a 3-month average of May, June and July closing prices). July closing prices include some contracts signed in March, so there is a significant lag to this data. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).
Watch Months-of-Supply!
Both inventory and sales are well below pre-pandemic levels, and I think we need to keep an eye on months-of-supply to forecast price changes. Historically nominal prices declined when months-of-supply approached 6 months - and that is unlikely any time soon - however, as expected, months-of-supply is back to 2019 levels. Months-of-supply was at 4.2 months in August compared to 4.0 months in August 2019.
NAR: Existing-Home Sales Decreased to 3.86 million SAAR in August
From the NAR: Existing-Home Sales Dipped 2.5% in August Existing-home sales fell in August, according to the National Association of REALTORS®. Three out of four major U.S. regions posted sales declines while the Midwest registered no change. Year-over-year, sales slipped in three regions but remained stable in the Northeast.
Lawler: Early Read on Existing Home Sales in August
From housing economist Tom Lawler: Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 3.88 million in August, down 1.8% from July’s preliminary pace and down 3.7% from last August’s seasonally adjusted pace.
Part 2: Current State of the Housing Market; Overview for mid-September 2024
On Friday, in Part 1: Current State of the Housing Market; Overview for mid-September 2024 I reviewed home inventory, housing starts and sales. In Part 2, I will look at house prices, mortgage rates, rents and more. The Case-Shiller National Index increased 5.4% year-over-year in June and will likely slow further in the July report (based on other data). The MoM increase in the seasonally adjusted (SA) Case-Shiller National Index was at 0.16%.
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