How long before I lose weight instead of build muscle?

You won't start building muscle until you start eating a surplus and progressive lifting.

Agreed. You aren't building muscle, you are retaining water.

From my personal experience, I don't agree. I have been lifting heavy for only 6 weeks and I can see a marked difference in my shoulders, chest, and especially my legs. There is definitely muscle there where there wasn't before. I have only lost 2 lbs in that time but have gone done a pants size. This at eating 1500-1800 calories a day.

Your body appears to be burning fat and turning it into muscle at a pretty equal rate, which is why you are losing inches, because 1 lb of muscle is way smaller than 1 lb of fat. So you should be proud, because you are getting healthier!! And the bigger percentage of muscles you have, the higher your basal metabolic rate is, because muscle eats more calories than fat. So that is good.

People who are losing "all this weight" probably aren't doing as "intense" of workouts as you. They either are burning fat AND muscle pretty quickly or just not building muscle as quickly as you are. Don't worry about comparing yourself to others! The more overweight you are the easier it is to lose the extra lbs. And rememeber, the goal should be to lose FAT, not just pounds, so you are already acheiving it. If you really want to lose weight, not caring if it is muscle or not, don't eat as much protein and don't work out, and stay under your caloric limit. Then your body will start eating your muscles and your fat at the same time. But I doubt you want to do that!

Indeed, be careful about "eating back" your calories burned, because as madameduffay said, MFP is a little generous with the amount of calories burned. It is good that you have a hrm.

Depending on how much your bmr is to start with, 1,200 may or may not be too much of calories for you to eat each day. I know MFP freaks out if you eat less than that, but for some people (say, under 5'), 1,200 may be too much. You should shoot for eating 80% of your BMR for weight loss, not just 1,200. So if your CURRENT bmr (as in, to stay at the same exact weight you are at the moment) is 1,700 you should be eating 1,360 to lose wieght healthily. If you are eating too few calories for all the working out you are doing you may be putting yourself into starvation mode, this is why it is important to judge your bmr accurately. And remember, Body Mass Index doesn't work for people who are super in shape, because it will think their extra muscle poundage is all fat. But I'm assuming you aren't at that point.

I suggest not to focus on the scale so much (I know it is super hard, I want to be at 130lbs too!) and just keep doing everything properly. Your body will right itself. My goal right now is to only work out as much to lose weight as I plan on continuing after I am at my goal weight. Because I don't want to go to all the hard work of putting on muscle if that isn't sustainable for me. My most important focus is to keep portion control and teaching myself to eat right, because that I need to continue after I reach my goal weight. It will come with time, don't get discouraged!!

So, in summation, JUST KEEP IT UP!!