The housing market has remained muted. This segment drives a significant share of consumption—not only through construction but also indirectly as people move and purchase furniture and appliances.

Relatively high interest rates and sluggish hiring are largely to blame. Thirty-year mortgage rates were near 3% just a few years ago but have hovered just below 7% in recent months. While a 7% mortgage is not historically high, it is substantially higher than what many homeowners locked in previously, discouraging moves. Housing prices have also not been immune to the historic inflation of recent years, compounding the impact of rising rates.

The job market is weakening, though not at a historic pace. Jobless claims have edged higher since January, and companies have slowed hiring. While the unemployment rate hasn’t moved significantly, the deterioration trend is well established.

Most economic headlines have centered on the collapse in consumer and business confidence indices. The University of Michigan’s Index of Consumer Sentiment fell from 74 in December to 60.7 in June, up slightly from May’s low of 52.2.

Sentiment indices don’t always track directly with activity, but when consumers and businesses feel uncertain, they tend to pull back, slowing the economy—and freight volumes—further.

It is nearly impossible to predict what will happen with policy or geopolitical developments. But a few things are certain. The most important factor for transportation service providers is that capacity continues to exit the market, and new barriers to entry are emerging.

While demand erosion has delayed a significant rebound in trucking, it hasn’t changed the fact that capacity is steadily shrinking. Intermodal will continue to keep overall rates in check as long as urgency remains low.

The transportation market has always needed a catalyst to flip, and these catalysts are often unpredictable. Still, the likelihood of a sharp shift continues to rise. While some dismiss this narrative as tired, the underlying math hasn’t changed.

If any economic clarity emerges or a stimulating event occurs in the second half of 2025, the shift could be sudden and significant. After more than three years of unwinding excess capacity, the market is increasingly vulnerable. Language requirement enforcement and increased vetting from government agencies will at bare minimum make it harder to get a CDL. Net revocations of trucking operating authorities are still averaging well above last year’s levels, signaling that conditions remain unfavorable but are inching closer to an inflection point.

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.

The FreightWaves data science and product teams are releasing new datasets each week and enhancing the client experience.

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