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Saturday, September 18, 2021

Schedule for Week of September 19, 2021

by Calculated Risk on 9/18/2021 08:11:00 AM

The key reports this week are August Housing Starts, and New and Existing Home sales.

The FOMC meets this week, and no change to policy is expected.

----- Monday, September 20th -----

10:00 AM: The September NAHB homebuilder survey. The consensus is for a reading of  74, down from 75 in August. Any number above 50 indicates that more builders view sales conditions as good than poor.
----- Tuesday, September 21st -----

Total Housing Starts and Single Family Housing Starts8:30 AM: Housing Starts for August.

This graph shows single and total housing starts since 1968.

The consensus is for 1.560 million SAAR, up from 1.534 million SAAR.

----- Wednesday, September 22nd -----

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

During the day: The AIA's Architecture Billings Index for August (a leading indicator for commercial real estate).

Existing Home Sales10:00 AM: Existing Home Sales for August from the National Association of Realtors (NAR). The consensus is for 5.81 million SAAR, down from 5.99 million in July.

The graph shows existing home sales from 1994 through the report last month.

Housing economist Tom Lawler expects the NAR to report 5.88 million SAAR.

2:00 PM: FOMC Meeting Announcement. No change to policy is expected 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 23rd -----

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 320 thousand initial claims, down from 332 thousand last week.

8:30 AM ET: Chicago Fed National Activity Index for August. This is a composite index of other data.

11:00 AM: the Kansas City Fed manufacturing survey for September.

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

----- Friday, September 24th -----

New Home Sales10:00 AM: New Home Sales for August from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the sales rate for last month.

The consensus is for 714 thousand SAAR, essentially up from 708 thousand in July.

10:00 AM: Opening Remarks, Fed Chair Jerome Powell, At Fed Listens: Perspectives on the Pandemic Recovery

Friday, September 17, 2021

Urban Institute: Median 95% LTV for New Mortgage Originations (Only 5% Downpayment)

by Calculated Risk on 9/17/2021 04:54:00 PM

NYU Stern professor Arpit Gupta tweeted today:

A common intuition is that borrowers put 20% down on a home.

The median down payment is actually closer to 5%, and has been for 12 years.
He included a chart from the Urban Institute showing the median LTV for new mortgage loan originations is 95% - and has been at that level for the last 12 years.

Gupta linked to the Housing Finance Policy Center's Monthly Chartbook

Here is the chart that also includes FICO and Debt-to-income (DTI).   The median DTI is at 37.5%.

Note that this is combined LTV, and probably includes 2nd loans.   Legend at top.

September 17th COVID-19: Over 180 Million Fully Vaccinated

by Calculated Risk on 9/17/2021 04:09:00 PM

Note: There will be no weekend updates.

The CDC is the source for all data.

The 7-day average deaths is the highest since March 1st.

According to the CDC, on Vaccinations.  Total doses administered: 383,994,877, as of a week ago 378,569,717. Average doses last week: 0.78 million per day.

COVID Metrics
 TodayWeek
Ago
Goal
Percent fully Vaccinated54.4%53.6%≥70.0%1
Fully Vaccinated (millions)180.6177.9≥2321
New Cases per Day3🚩142,736139,221≤5,0002
Hospitalized388,50693,097≤3,0002
Deaths per Day3🚩1,4641,253≤502
1 Minimum to achieve "herd immunity" (estimated between 70% and 85%).
2my goals to stop daily posts,
37 day average for Cases, Currently Hospitalized, and Deaths
🚩 Increasing 7 day average week-over-week for Cases, Hospitalized, and Deaths
✅ Goal met.

IMPORTANT: For "herd immunity" most experts believe we need 70% to 85% of the total population fully vaccinated (or already had COVID).  

This is all from the CDC - state data may differ!

KUDOS to the residents of the 11 states that have achieved 60% of total population fully vaccinated: Vermont at 68.8%, Massachusetts, Maine, Connecticut, Rhode Island, Maryland, New Jersey, Washington, New York, New Mexico, New Hampshire at 60.9%.

The following 18 states and D.C. have between 50% and 59.9% fully vaccinated: Oregon at 59.6%, District of Columbia, Virginia, Colorado, Minnesota, California, Hawaii, Delaware, Pennsylvania, Wisconsin, Florida, Nebraska, Iowa, Illinois, Michigan, South Dakota, Kentucky, Arizona and Kansas at 50.0%.

Next up (total population, fully vaccinated according to CDC) are Texas at 49.8%,  Nevada at 49.6%, Ohio at 49.4%, Utah at 49.2%, Alaska at 48.8% and North Carolina at 48.4%.

COVID-19 Positive Tests per DayClick on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

Lawler: Early Read on Existing Home Sales in August

by Calculated Risk on 9/17/2021 01:43:00 PM

From housing economist Tom Lawler (see important comments on inventory):

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 5.90 million in August, down 1.5% from July’s preliminary pace and down 1.2% from last August’s seasonally adjusted pace. Unadjusted sales should show a very small YOY gain, with the SA/NSA difference reflecting this August’s higher business day count relative to last August’s.

Local realtor reports, as well as reports from national inventory trackers, suggest that while the inventory of existing homes for sale remained low last month, the YOY decline in August was significantly less than in July. What this means for the NAR’s inventory estimate for August, however, is unclear.  As I’ve noted before, the inventory measure in most publicly-released local realtor/MLS reports excludes listings with pending contracts, but that is not the case for most of the reports sent to the NAR (referred to as the “NAR Report!”), Since the middle of last Spring inventory measures excluding pending listings have fallen much more sharply than inventory measures including such listings, and this latter inventory measure understates the decline in the effective inventory of homes for sale over the last several months. Having said that, however, it is clear that seasonally adjusted inventories have been trending higher over the past several months.

Finally, local realtor/MLS reports suggest the median existing single-family home sales price last month was up by about 14.7% from last August.

CR Note: The National Association of Realtors (NAR) is scheduled to release August existing home sales on Wednesday, September 22, 2021 at 10:00 AM ET. The consensus is for 5.88 million SAAR.

5 More Local Housing Markets in August

by Calculated Risk on 9/17/2021 12:55:00 PM

In the Newsletter: 5 More Local Housing Markets in August

This brings the total to 25 local markets for August. This includes active inventory, new listings and sales added for Alabama, Austin, Maryland, Phoenix, Rhode Island

So far active inventory is down 1.1% compared to July for these markets

Q3 GDP Forecasts: Around 4.5%

by Calculated Risk on 9/17/2021 10:46:00 AM

GDP forecasts had been downgraded sharply for Q3 due to COVID, but now seem to have stabilized. 


Here is a table of some of the forecasts over the last two months.

 MerrillGoldmanGDPNow
7/30/217.0%9.0%6.1%
8/20/214.5%5.5%6.1%
9/10/214.5%3.5%3.7%
9/17/214.5%4.5%3.6%

From BofA Merrill Lynch:
We continue to track 4.5% qoq saar for 3Q GDP following the retail sales data as our forecast was far above consensus. [Sept 17 estimate]
emphasis added
From Goldman Sachs:
Following the stronger-than-expected retail sales report, we boosted our Q3 GDP tracking estimate by 1pp at +4.5% (qoq ar). We are also lowering our 2021Q4 and 2022Q2 GDP forecasts by 0.5pp to reflect a smaller rebound from 2021Q3. [Sept 16 estimate]
And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2021 is 3.6 percent on September 16, down from 3.7 percent on September 10 after rounding. [Sept 16 estimate]

Black Knight: Number of Homeowners in COVID-19-Related Forbearance Plans Decreased

by Calculated Risk on 9/17/2021 08:34:00 AM

Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.

This data is as of September 14th.

From Andy Walden at Black Knight: Forbearances Below 1.6M For First Time Since Start of Pandemic

The number of active forbearance plans fell by 22K (-1.4%) this week, bringing the total number of U.S. homeowners in COVID-19 forbearance below 1.6M for the first time since the start of the pandemic.

Matching 15,000 declines in plans among both GSE and FHA/VA loans were partially offset by an 8,000 rise in PLS/portfolio plans. Overall, forbearances are now down 156K (-8.9%) from the same time last month.

As of September 14, nearly 1.6 million mortgage holders remain in COVID-19 related forbearance plans, representing 3% of all active mortgages, including 1.7% of GSE, 5.2% of FHA/VA and 3.8% of portfolio held and privately securitized loans.

Both new forbearance plans and plan restarts rose this week, with new plan starts trending higher since mid-August.

The rise in new plan starts is almost solely limited to FHA/VA loans, coinciding with the deadline for entry into forbearance for such loans expiring at the end of September. That said, unemployment benefits lapsed over the Labor Day weekend and COVID caseloads continue to rise, so it’s difficult to pinpoint the exact cause.

With two weeks left in the month, we have already seen 218,000 plan exits over just the first half of September. Meanwhile, plan extensions are at their lowest since the onset of the pandemic, with only 45,000 plans extended this week.

With more than 462,000 plans scheduled for review for extension/removal in September, exit volumes could be poised to rise sharply at the start of October. As many as 330,000 are set to reach their final plan expirations based on current allowable forbearance term lengths.
emphasis added

Thursday, September 16, 2021

September 16th COVID-19: Over 180 Million Fully Vaccinated

by Calculated Risk on 9/16/2021 04:59:00 PM

The CDC is the source for all data.

The 7-day average deaths is the highest since March 1st.

According to the CDC, on Vaccinations.  Total doses administered: 383,038,403, as of a week ago 377,622,065. Average doses last week: 0.90 million per day.

COVID Metrics
 TodayWeek
Ago
Goal
Percent fully Vaccinated54.2%53.4%≥70.0%1
Fully Vaccinated (millions)180.1177.4≥2321
New Cases per Day3🚩146,182137,783≤5,0002
Hospitalized389,13293,255≤3,0002
Deaths per Day3🚩1,2331,447≤502
1 Minimum to achieve "herd immunity" (estimated between 70% and 85%).
2my goals to stop daily posts,
37 day average for Cases, Currently Hospitalized, and Deaths
🚩 Increasing 7 day average week-over-week for Cases, Hospitalized, and Deaths
✅ Goal met.

IMPORTANT: For "herd immunity" most experts believe we need 70% to 85% of the total population fully vaccinated (or already had COVID).  

This is all from the CDC - state data may differ!

KUDOS to the residents of the 11 states that have achieved 60% of total population fully vaccinated: Vermont at 68.8%, Massachusetts, Maine, Connecticut, Rhode Island, Maryland. New Jersey, Washington, New York, New Mexico, New Hampshire at 60.8%.

The following 16 states and D.C. have between 50% and 59.9% fully vaccinated: Oregon at 59.5%, District of Columbia, Virginia, Colorado, Minnesota, California, Hawaii, Delaware, Pennsylvania, Wisconsin, Florida, Nebraska, Iowa, Illinois, Michigan, South Dakota, Kentucky and Arizona at 50.0%.

Next up (total population, fully vaccinated according to CDC) are Kansas at 49.9%, Nevada at 49.5%, Texas at 49.5%,  Ohio at 49.3%, Utah at 49.1% and Alaska at 48.6%.

COVID-19 Positive Tests per DayClick on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

Household Formation Drives Housing Demand

by Calculated Risk on 9/16/2021 01:32:00 PM

In the Newsletter: Household Formation Drives Housing Demand

If all the missing households from 2020 were formed in 2021, we’d expect about 2.3 million additional households formed this year!

Hotels: Occupancy Rate Down 13.6% Compared to Same Week in 2019

by Calculated Risk on 9/16/2021 11:12:00 AM

Note: The year-over-year occupancy comparisons are easy, since occupancy declined sharply at the onset of the pandemic.


The comparison to 2019 was difficult this week due to the timing of Labor Day.  Last week the occupancy rate was unchanged year-over-year.  If we average the last two weeks, occupancy is down about 7% compared to the same two weeks in 2019.

U.S. hotel performance fell slightly from the previous week, according to STR‘s latest data through September 11.

September 5-11, 2021 (percentage change from comparable week in 2019*):

Occupancy: 60.0% (-13.6%)
• Average daily rate (ADR): $130.82 (-1.4%)
• Revenue per available room (RevPAR): $78.46 (-14.8%)

Despite the week-over-week dip, performance levels were solid on an absolute basis considering it was the week of Labor Day as well as Rosh Hashanah from Monday through Wednesday. Neither of those holidays were a factor in the corresponding week two years ago, thus creating steeper declines in comparison with 2019.
emphasis added
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Hotel Occupancy RateClick on graph for larger image.

The red line is for 2021, black is 2020, blue is the median, dashed purple is 2019, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020).

Note: Y-axis doesn't start at zero to better show the seasonal change.

With solid leisure travel, the Summer months had decent occupancy - but it is uncertain what will happen in the Fall with business travel - usually weekly occupancy increases to around 70% in the weeks following Labor Day due to renewed business travel.