by Calculated Risk on 11/30/2021 09:01:00 PM

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

• At 8:15 AM, The ADP Employment Report for November. This report is for private payrolls only (no government).  The consensus is for 525,000 jobs added, down from 571,000 in October.

• At 10:00 AM, ISM Manufacturing Index for November.  The consensus is for 61.0%, up from 60.8%.

• Also at 10:00 AM, Construction Spending for October.  The consensus is for 0.4% increase in spending.

• At 2:00 PM, the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

• All day, Light vehicle sales for November. The consensus is for 13.2 million SAAR in November, up from the BEA estimate of 13.0 million SAAR in October (Seasonally Adjusted Annual Rate).

by Calculated Risk on 11/30/2021 07:43:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 460,773,508.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	59.4%	---	≥70.0%1
Fully Vaccinated (millions)	197.1	---	≥2321
New Cases per Day3	80,178	93,674	≤5,0002
Hospitalized3	41,442	42,596	≤3,0002
Deaths per Day3	804	977	≤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).  Note: COVID will probably stay endemic (at least for some time).

KUDOS to the residents of the 5 states that have achieved 70% of total population fully vaccinated: Vermont at 72.9%, Rhode Island, Connecticut, Maine, and Massachusetts at 71.2%.

KUDOS also to the residents of the 16 states and D.C. that have achieved 60% of total population fully vaccinated: New York at 68.5%, New Jersey, Maryland, Washington, Virginia, New Hampshire, Oregon, District of Columbia, New Mexico, Colorado, California, Minnesota, Pennsylvania, Illinois, Delaware, Florida, and Hawaii at 61.0%.

The following 19 states have between 50% and 59.9% fully vaccinated: Wisconsin at 59.5%, Nebraska, Iowa, Utah, Michigan, Texas, Kansas, Arizona, Nevada, South Dakota, North Carolina, Alaska, Ohio, Kentucky, Montana, Oklahoma, South Carolina, Missouri and Indiana at 50.6%.

Next up (total population, fully vaccinated according to CDC) are Georgia at 49.6%, Tennessee at 49.5%, Arkansas at 49.3%, Louisiana at 48.9% and North Dakota at 48.8%.

Click on graph for larger image.

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

by Calculated Risk on 11/30/2021 04:11:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency decreased to 1.46% in October, from 1.62% in September. The serious delinquency rate is down from 3.05% in October 2020.

These are mortgage loans that are "three monthly payments or more past due or in foreclosure".

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble, and peaked at 3.32% in August 2020 during the pandemic.

Click on graph for larger image

By vintage, for loans made in 2004 or earlier (1% of portfolio), 4.02% are seriously delinquent (down from 4.25% in September). For loans made in 2005 through 2008 (2% of portfolio), 6.90% are seriously delinquent (down from 7.21%), For recent loans, originated in 2009 through 2021 (97% of portfolio), 1.17% are seriously delinquent (down from 1.31%). So, Fannie is still working through a few poor performing loans from the bubble years.

Mortgages in forbearance are counted as delinquent in this monthly report, but they will not be reported to the credit bureaus.

This is very different from the increase in delinquencies following the housing bubble.   Lending standards have been fairly solid over the last decade, and most of these homeowners have equity in their homes - and they will be able to restructure their loans once they are employed.

Freddie Mac reported earlier.

by Calculated Risk on 11/30/2021 02:31:00 PM

From the Las Vegas Visitor Authority: October 2021 Las Vegas Visitor Statistics

With significant events and an improving convention segment, October saw the strongest visitation of the pandemic era both on weekends and midweek as the destination welcomed nearly 3.4M visitors (up 15.5% MoM and down ‐7.6% from Oct 2019).

Hotel occupancy reached 81.6% for the month (up 8.6 pts MoM, down ‐8.4 pts vs. Oct 2019), as Weekend occupancy reached 90.4% (up 1.3 pts MoM) while Midweek occupancy improved from the prior month to 77.5% (up 11.4 pts MoM).

October room rates approached $174, significantly ahead of last month and Oct 2019 (up 11.5% MoM and up 28.3% vs. Oct 2019) while RevPAR neared $142, up 24.6% MoM and 16.4% ahead of Oct 2019.

Click on graph for larger image.

Thist graph shows visitor traffic for 2019 (blue), 2020 (orange) and 2021 (red).

Visitor traffic was down 7.6% compared to the same month in 2019.

There was no convention traffic from March 2020 until June 2021 (data still N/A).

I'll add a graph of convention traffic once convention data is available.

by Calculated Risk on 11/30/2021 12:41:00 PM

The FDIC released the Quarterly Banking Profile for Q3 2021 this morning:

Quarterly net income rose $18.4 billion (35.9 percent) to $69.5 billion from the same period one year ago.
...
Total assets increased $462.6 billion (2 percent) from second quarter 2021 to $23.3 trillion. Securities rose $225 billion (3.9 percent), while cash and balances due from depository institutions rose $126.8 billion (3.6 percent). Growth in mortgage-backed securities (up $101.9 billion, or 3 percent) and U.S. Treasury securities (up $99.3 billion, or 8.5 percent) continued to drive quarterly increases in total securities. Loans and securities with maturities longer than 5 years now make up almost a third (31.3 percent) of total assets, up from 28 percent in fourth quarter 2019.

Loans that were 90 days or more past due or in nonaccrual status (i.e., noncurrent loans) continued to decline (down $13.2 billion, or 10.8 percent) from first quarter 2021. The noncurrent rate for total loans declined 12 basis points from the previous quarter to 1.01 percent. Net charge-offs also continued to decline (down $8.3 billion, or 53.2 percent) from a year ago. The total net charge-off rate dropped 30 basis points to 0.27 percent—the lowest level on record.
emphasis added

Click on graph for larger image.

The FDIC reported the number of problem banks declined to 46.

The number of FDIC-insured institutions declined from 4,951 in second quarter 2021 to 4,914. During third quarter 2021, three new banks opened, 39 institutions merged with other FDIC-insured institutions, one bank ceased operations, and no banks failed. The number of banks on the FDIC’s “Problem Bank List” declined by ten from second quarter to 46, the lowest level since QBP data collection began in 1984. Total assets of problem banks increased $4.8 billion (10.5 percent) from second quarter to $50.6 billion.

This graph from the FDIC shows the number of problem banks and assets at 51 institutions.

Note: The number of assets for problem banks increased significantly back in 2018 when Deutsche Bank Trust Company Americas was added to the list (it must still be on the list given the assets of problem banks).

The dollar value of 1-4 family residential Real Estate Owned (REOs, foreclosure houses) declined from $1.37 billion in Q3 2020 to $0.79 billion in Q3 2021. This is the lowest level of REOs in many years.  (Probably declined sharply due to foreclosure moratoriums, forbearance programs and house price increases).

This graph shows the nominal dollar value of Residential REO for FDIC insured institutions. Note: The FDIC reports the dollar value and not the total number of REOs.

by Calculated Risk on 11/30/2021 11:08:00 AM

Today, in the Newsletter: Case-Shiller National Index up 19.5% Year-over-year in September

Excerpt:

Both the Case-Shiller House Price Index (HPI) and the Federal Housing Finance Agency (FHFA) HPI for September were released today. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).

The MoM increase in Case-Shiller was at 1.18%; still historically high, but lower than the previous 13 months. House prices started increasing sharply in the Case-Shiller index in August 2020, so the last 14 months have all been historically very strong, but the peak MoM growth is behind us - and the year-over-price growth is starting to decelerate.
...

As I discussed in How Much will the Fannie & Freddie Conforming Loan Limit Increase for 2022?, the FHFA HPI is used to determine the increase in the Conforming Loan Limit. The relevant quarterly index, the Expanded-Data Indexes (Estimated using Enterprise, FHA, and Real Property County Recorder Data Licensed from DataQuick for sales below the annual loan limit ceiling), was released this morning, and it was up 18.04% YoY. The actual 2022 CLL will be released later.
emphasis added

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by Calculated Risk on 11/30/2021 09:14:00 AM

S&P/Case-Shiller released the monthly Home Price Indices for September ("September" is a 3-month average of July, August and September prices).

This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.

From S&P: S&P Corelogic Case-Shiller Index Reports 19.5% Annual Home Price Gain in September

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 19.5% annual gain in September, down from 19.8% in the previous month. The 10-City Composite annual increase came in at 17.8%, down from 18.6% in the previous month. The 20- City Composite posted a 19.1% year-over-year gain, down from 19.6% in the previous month.

Phoenix, Tampa, and Miami reported the highest year-over-year gains among the 20 cities in September. Phoenix led the way with a 33.1% year-over-year price increase, followed by Tampa with a 27.7% increase and Miami with a 25.2% increase. Six of the 20 cities reported higher price increases in the year ending September 2021 versus the year ending August 2021.
...
Before seasonal adjustment, the U.S. National Index posted a 1.0% month-over-month increase in September, while the 10-City and 20-City Composites both posted increases of 0.7% and 0.8%, respectively.

After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.2%, and the 10-City and 20-City Composites both posted increases of 0.8% and 1.0%, respectively. In September, 19 of the 20 cities reported increases before seasonal adjustments while all 20 cities reported increases after seasonal adjustments.

“If I had to choose only one word to describe September 2021’s housing price data, the word would be ‘deceleration,’ says Craig J. Lazzara, Managing Director at S&P DJI. “Housing prices continued to show remarkable strength in September, though the pace of price increases declined slightly.The National Composite Index rose 19.5% from year-ago levels, with the 10- and 20-City Composites up 17.8% and 19.1%, respectively. This month, however, the rate of price growth began to decline, as each of our three composites rose less in September than in August.
...
“We have previously suggested that the strength in the U.S. housing market is being driven by households’ reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. More data will be required to understand whether this demand surge represents simply an acceleration of purchases that would have occurred over the next several years, or reflects a secular change in locational preferences. September’s report is consistent with either explanation.”
emphasis added

Click on graph for larger image.

The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

The Composite 10 index is up 0.8% in September (SA).

The Composite 20 index is up 1.0% (SA) in September.

The National index is 46% above the bubble peak (SA), and up 1.2% (SA) in September.  The National index is up 98% from the post-bubble low set in February 2012 (SA).

The second graph shows the year-over-year change in all three indices.

The Composite 10 SA is up 17.8% year-over-year.  The Composite 20 SA is up 19.1% year-over-year.

The National index SA is up 19.5% year-over-year.

Price increases were slightly below expectations.  I'll have more later.

by Calculated Risk on 11/29/2021 09:02:00 PM

From Matthew Graham at Mortgage News Daily: MBS RECAP: Bonds Find Footing After Shaky Start

This morning we found ourselves in the uncomfortable position of watching the bond market backtrack on massive gains at the end of the previous week. This is always a risk when the market goes on a big run--especially on a Friday. But rather than continue to erase Friday's gains, bonds found their footing in the 10am hour as a part of a broader "risk-off" move. [30 year fixed 3.21%]
emphasis added

Tuesday:
• At 9:00 AM ET, FHFA House Price Index for September. This was originally a GSE only repeat sales, however there is also an expanded index. The 2022 Conforming loan limits will also be announced.

• At 9:00 AM, S&P/Case-Shiller House Price Index for September. The consensus is for a 19.3% year-over-year increase in the Composite 20 index for September.

• At 9:45 AM, Chicago Purchasing Managers Index for November.

• At 10:00 AM, Testimony, Fed Chair Jerome Powell, Coronavirus and CARES Act, Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs

• At 10:30 AM, FDIC Quarterly Banking Profile, Third quarter.

by Calculated Risk on 11/29/2021 08:41:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 459,234,791.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	59.3%	---	≥70.0%1
Fully Vaccinated (millions)	196.8	---	≥2321
New Cases per Day3	72,008	91,497	≤5,0002
Hospitalized3	41,442	42,596	≤3,0002
Deaths per Day3	719	962	≤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).  Note: COVID will probably stay endemic (at least for some time).

KUDOS to the residents of the 5 states that have achieved 70% of total population fully vaccinated: Vermont at 72.9%, Rhode Island, Connecticut, Maine, and Massachusetts at 71.1%.

KUDOS also to the residents of the 16 states and D.C. that have achieved 60% of total population fully vaccinated: New York at 68.4%, New Jersey, Maryland, Washington, Virginia, New Hampshire, Oregon, District of Columbia, New Mexico, Colorado, California, Minnesota, Pennsylvania, Illinois, Delaware, Florida, and Hawaii at 60.9%.

The following 19 states have between 50% and 59.9% fully vaccinated: Wisconsin at 59.5%, Nebraska, Iowa, Utah, Michigan, Texas, Kansas, Arizona, Nevada, South Dakota, North Carolina, Alaska, Ohio, Kentucky, Montana, Oklahoma, South Carolina, Missouri and Indiana at 50.6%.

Next up (total population, fully vaccinated according to CDC) are Tennessee at 49.5%, Georgia at 49.4%, Arkansas at 49.3%, Louisiana at 48.9% and North Dakota at 48.7%.

Click on graph for larger image.

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

by Calculated Risk on 11/29/2021 06:33:00 PM

Today, in the Newsletter: 2022 Housing Forecasts: Second Look

Excerpt:

The key in 2022 will be inventory. If inventory stays extremely low, there will be more housing starts and a larger increase in prices. However, if inventory increases significantly, there will be fewer starts and less price appreciation. Towards the end of each year, I collect some housing forecasts for the following year.
...

For house prices, there is a very wide spread. As of August, Case-Shiller house prices were up 19.8% year-over-year.
emphasis added

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