by Calculated Risk on 2/28/2025 07:03:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly.

Note: "Effective May 1, 2024, hospitals are no longer required to report COVID-19 hospital admissions, hospital capacity, or hospital occupancy data."  So I'm no longer tracking hospitalizations.

COVID Metrics
	Now	Week Ago	Goal
Deaths per Week	850	893	≤3501
1my goals to stop weekly posts. 🚩 Increasing number weekly for Deaths. ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported since Jan 2023.

Although weekly deaths met the original goal to stop posting in June 2023 (low of 314 deaths), I'm continuing to post now that deaths are above the goal again - and I'll continue to post until weekly deaths are once again below the goal.

Weekly deaths are now decreasing following the winter pickup.

And here is a graph I'm following concerning COVID in wastewater as of February 27th:

This appears to be a leading indicator for COVID hospitalizations and deaths.  This has moving down recently.

Nationally COVID in wastewater is "Moderate", down from "High" two weeks ago, according to the CDC.   

by Calculated Risk on 2/28/2025 11:49:00 AM

From BofA:

The second print of 4Q GDP came in at 2.3% q/q saar, unchanged from the advance print and a tenth higher than our tracking estimate. Meanwhile, our 1Q GDP tracking is unchanged at 2.3% q/q saar since our last weekly publication. [Feb 28th]
emphasis added

From Goldman:

We lowered our Q1 GDP tracking estimate by 0.4pp to +1.4% (quarter-over-quarter annualized). Our tracking estimate exaggerates the softness in Q1 to some extent because elevated gold imports ought to result in an offsetting increase in inventory accumulation, but the Q4 GDP data suggest this offset is unlikely to be captured in real time. [Feb 28th estimate]

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -1.5 percent on February 28, down from 2.3 percent on February 19. After recent releases from the US Bureau of Economic Analysis and the US Census Bureau, the nowcast of the contribution of net exports to first-quarter real GDP growth fell from -0.41 percentage points to -3.70 percentage points while the nowcast of first-quarter real personal consumption expenditures growth fell from 2.3 percent to 1.3 percent. [Feb 28th estimate]

by Calculated Risk on 2/28/2025 10:47:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Increased in January; Up 3.9% Year-over-year

A brief excerpt:

Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.41% month-over-month on a seasonally adjusted (SA) basis in January. On a year-over-year basis, the National FMHPI was up 3.9% in January, down from up 4.1% YoY in December. The YoY increase peaked at 19.0% in July 2021, and for this cycle, bottomed at up 0.9% YoY in May 2023. ...

For cities (Core-based Statistical Areas, CBSA), here are the 30 cities with the largest declines from the peak, seasonally adjusted. Austin continues to be the worst performing city. However, 4 of the 6 cities with the largest price declines are in Florida (and Florida has 6 of the top 10 cities with the largest price declines).

There is much more in the article!

by Calculated Risk on 2/28/2025 08:57:00 AM

Here is a graph of the year-over-year change in shelter from the CPI report and housing from the PCE report this morning, both through January 2025.

CPI Shelter was up 4.4% year-over-year in January, down from 4.6% in December, and down from the cycle peak of 8.2% in March 2023.

Housing (PCE) was up 4.5% YoY in January, down from 4.7% in December and down from the cycle peak of 8.3% in April 2023.

Since asking rents are mostly flat year-over-year, these measures will slowly continue to decline over the next year as rents for existing tenants continue to increase.

The second graph shows PCE prices, Core PCE prices and Core ex-housing over the last 3 months (annualized):

Key measures are slightly above the Fed's target on a 3-month basis. Note: There is possibly some residual seasonality distorting PCE prices in Q1, especially in January.

3-month annualized change:

PCE Price Index: 2.9%
Core PCE Prices: 2.4%
Core minus Housing: 2.1%

by Calculated Risk on 2/28/2025 08:30:00 AM

The BEA released the Personal Income and Outlays, January 2025 report for January:

Personal income increased $221.9 billion (0.9 percent at a monthly rate) in January, according to estimates released today by the U.S. Bureau of Economic Analysis. Disposable personal income (DPI)—personal income less personal current taxes—increased $194.3 billion (0.9 percent) and personal consumption expenditures (PCE) decreased $30.7 billion (0.2 percent).

Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—decreased $52.7 billion in January. Personal saving was $1.01 trillion in January and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.6 percent.
...
From the preceding month, the PCE price index for January increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.3 percent.
emphasis added

The January PCE price index increased 2.5 percent year-over-year (YoY), down from 2.6 percent YoY in December, and down from the recent peak of 7.0 percent in June 2022.

The PCE price index, excluding food and energy, increased 2.6 percent YoY, down from 2.9 percent in December, and down from the recent peak of 5.4 percent in February 2022.

The following graph shows real Personal Consumption Expenditures (PCE) through January 2025 (2017 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income was well above expectations, and PCE was below expectations.

Inflation was close to expectations.

by Calculated Risk on 2/27/2025 07:23:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Friday:
• At 8:30 AM ET, Personal Income and Outlays for January. The consensus is for a 0.3% increase in personal income, and for a 0.2% increase in personal spending. And for the Core PCE price index to increase 0.2%.  PCE prices are expected to be up 2.5% YoY, and core PCE prices up 2.6% YoY.

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

by Calculated Risk on 2/27/2025 04:01:00 PM

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For February, Realtor.com reported inventory was up 27.5% YoY, but still down 22.9% compared to the 2017 to 2019 same month levels. 

 Now - on a weekly basis - inventory is up 27.7% YoY.

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View—Data for Week Ending Feb. 22, 2025

• Active inventory increased, with for-sale homes 27.7% above year-ago levels

The number of homes for sale has now been higher than the previous year for 68 consecutive weeks. This continued rise in active inventory suggests that homes are not only being listed at a higher rate but are also lingering on the market longer. With more choices available, buyers can afford to be more selective, putting pressure on sellers to price competitively.

• New listings—a measure of sellers putting homes up for sale—increased 2.5%

Newly listed inventory grew for the seventh consecutive week, signaling that sellers are gaining confidence in listing their homes despite persistently high mortgage rates. While this week’s increase is slightly smaller than the previous week, the steady influx of fresh inventory offers buyers more options as the market heads into the spring season.

Here is a graph of the year-over-year change in inventory according to realtor.com. 

Inventory was up year-over-year for the 68th consecutive week.  

New listings have increased recently but remain below typical pre-pandemic levels.

by Calculated Risk on 2/27/2025 12:53:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Inflation Adjusted House Prices 1.0% Below 2022 Peak

Excerpt:

It has been over 18 years since the housing bubble peak. In the December Case-Shiller house price index released this week, the seasonally adjusted National Index (SA), was reported as being 77% above the bubble peak in 2006. However, in real terms, the National index (SA) is about 12% above the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is 3% above the bubble peak.

People usually graph nominal house prices, but it is also important to look at prices in real terms. As an example, if a house price was $300,000 in January 2010, the price would be $438,000 today adjusted for inflation (46% increase). That is why the second graph below is important - this shows "real" prices.

The third graph shows the price-to-rent ratio, and the fourth graph is the affordability index. The last graph shows the 5-year real return based on the Case-Shiller National Index.
...
The second graph shows the same two indexes in real terms (adjusted for inflation using CPI).

In real terms (using CPI), the National index is 1.0% below the recent peak, and the Composite 20 index is 1.2% below the recent peak in 2022. The real National index and the Composite 20 index increased slightly in real terms in December.

It has now been 31 months since the real peak in house prices. Typically, after a sharp increase in prices, it takes a number of years for real prices to reach new highs (see House Prices: 7 Years in Purgatory)

There is much more in the article!

by Calculated Risk on 2/27/2025 10:00:00 AM

From the NAR: Pending Home Sales Waned 4.6% in January

Pending home sales pulled back 4.6% in January according to the National Association of REALTORS®. The Midwest, South and West experienced month-over-month losses in transactions – with the most significant drop in the South – while the Northeast saw a modest gain. Year-over-year, contract signings lowered in all four U.S. regions, with the South seeing the greatest falloff.

The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – fell 4.6% to 70.6 in January, an all-time low. (Last year's cyclical low point in July 2024 was revised from 70.2 to 71.2.) Year-over-year, pending transactions declined 5.2%. An index of 100 is equal to the level of contract activity in 2001.

"It is unclear if the coldest January in 25 years contributed to fewer buyers in the market, and if so, expect greater sales activity in upcoming months," said NAR Chief Economist Lawrence Yun. "However, it's evident that elevated home prices and higher mortgage rates strained affordability."
...
The Northeast PHSI rose 0.3% from last month to 63.4, down 0.5% from January 2024. The Midwest index contracted 2.0% to 72.8 in January, down 2.7% from the previous year.

The South PHSI plunged 9.2% to 81.0 in January, down 8.8% from a year ago. The West in
emphasis added

Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in February and March.

by Calculated Risk on 2/27/2025 08:36:00 AM

From the BEA: Gross Domestic Product, 4th Quarter and Year 2024 (Second Estimate)

Real gross domestic product (GDP) increased at an annual rate of 2.3 percent in the fourth quarter of 2024 (October, November, and December), according to the second estimate released by the U.S. Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

The increase in real GDP in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased. ... Real GDP was revised up by less than 0.1 percentage point from the advance estimate released last month, primarily reflecting upward revisions to government spending and exports that were partly offset by downward revisions to consumer spending and investment.
emphasis added

Here is a Comparison of Second and Advance Estimates. PCE growth was unrevised at 4.2%. Residential investment was revised up from 5.3% to 5.4%.

by Calculated Risk on 2/27/2025 08:30:00 AM

The DOL reported:

In the week ending February 22, the advance figure for seasonally adjusted initial claims was 242,000, an increase of 22,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 219,000 to 220,000. The 4-week moving average was 224,000, an increase of 8,500 from the previous week's revised average. The previous week's average was revised up by 250 from 215,250 to 215,500.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 224,000.

The previous week was revised up.

Weekly claims were well above the consensus forecast.

by Calculated Risk on 2/26/2025 07:45:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for an increase to 225 thousand from 219 thousand last week.

• At 8:30 AM, Gross Domestic Product, 4th Quarter and Year 2024 (Second Estimate) The consensus is that real GDP increased 2.3% annualized in Q4, unchanged from the advance estimate of 2.3%.

• At 8:30 AM, Durable Goods Orders for January from the Census Bureau. The consensus is for a 1.8% increase in durable goods orders.

• At 10:00 AM, Pending Home Sales Index for January. The consensus is for a 1.2% decrease in the index.

• At 11:00 AM, the Kansas City Fed manufacturing survey for February.

by Calculated Risk on 2/26/2025 04:57:00 PM

From housing economist Tom Lawler: Treasury Secretary Wrongly Says Fed Has Been “Big Seller” of Treasuries

In an interview last week, Treasury Secretary Bessent said that any plans by the Treasury to extend the maturity were “a long ways off.” One of the reasons cited by Secretary Bessent was the Federal Reserve’s current balance sheet runoff policy. Here is a quote from Bessent.

“The Fed’s balance sheet runoff increases the supply of Treasuries. It’s easier for me to extend duration when I’m not competing with another big seller.”

This statement appears to reflect Bessent’s complete misunderstanding of how the Federal Reserve has implemented its balance sheet runoff. Rather than being a “big seller” of intermediate and long term Treasury securities, the Fed has actually been a pretty big buyer of intermediate and long term Treasury securities even as it has lowered the overall size of its balance sheet.

The Federal Reserve owns a sizable amount of Treasuries, including a significant amount that matures in a short period of time. What the Fed has been doing is essentially targeting a desired decline in its overall balance sheet, and reinvesting a portion of the sizable amount of Treasuries maturing (and MBS principal repayments) into Treasury bills (short maturities) and Treasury notes and bonds (long maturities), TIPS (long maturities), and a de minimus amount of Floating Rate Notes in order to hit a targeted total balance. The replacement of some of the maturing notes and bonds (which by definition have very short maturities) into new longer-maturity notes and bonds extends the maturity of Federal Reserve Treasury note and bond holdings.

Here is a table showing the Fed’s System Open Market Account’s (SOMA) purchases, sales, and maturities (from the Fed’s quarterly financial statement)

As this table shows, even during the period where the Fed has reduced its balance sheet (a period some call “quantitative tightening,” though that is something of a misnomer), the Fed has been a significant net buyer of Treasury notes and bonds – and overall sales have been very small.

At the end of 2024, SOMA held $184.8 BILLION of Treasury notes and bonds (ex TIPS) that were not on its balance sheet at the end of 2023, with a weighted average maturity at the end of 2014 of 8.11 years, as well as 3.49 BILLION of TIPS not on its balance sheet a year earlier with a weighted average maturity of 10.52 years.

The Treasury’s purchases of Treasury notes and bond has continued this year. Below is a table showing SOMA’s purchases of Treasury notes and bonds at this year’s Treasury note and bond auctions.

The 3, 10, and 30 year SOMA purchases were especially noticeable, in that (1) SOMA owns a sizable 21.55% of the latest issued 3, 10, and 30 Treasury year securities, and (2) the sizable Fed purchases at these auctions was only about a week before Bessent’s incorrect comment that the Fed has been a “big seller” of Treasuries.

On January 31, 2025 the weighted average maturity of marketable Treasury securities outstanding was 5.88 years, while the weighted average maturity of SOMA Treasury securities holdings on February 19, 2025 was a staggering 8.97 years.

In terms of why I think the term “quantitative tightening” [is a misnomer] to describe the last few years, it’s useful to remember what quantitative easing entailed: not just expanding the size of the Fed’s balance sheet, but also purchasing huge amounts of long-term Treasuries (and agency MBS) that were in large part designed to lower long-term interest rates (including term premiums). A quantitative tightening designed to offset part of the quantitative easing would have involved selling long-term Treasuries (and MBS) in order to allow for term premiums to return to a more normal level. That, of course, is NOT what the Fed has done. Indeed, Fed actions since the so-called “QT” period began has actually resulted in a slight decline in the weighted average maturity of marketable Treasuries held by the public.

As such, while the Federal Reserve has in fact significantly reduced the size of its balance sheet, its overall strategy still seems to be that of keeping longer-term interest rates lower than they would other be. That, of course, is why I would not characterize the latest period of Federal Reserve balance sheet shrinkage as quantitative tightening, and it is most certainly the case that this recent period has in any way reversed the previous quantitative easing.

Note The Fed currently only owns about 3% of Treasury Bills outstanding but owns about 30% of Treasury notes and bonds (ex TIPS) with a maturity greater than 10 years.

Next Up: When the Fed decides to stop reducing its balance sheet, will the Fed’s purchases of longer-term Treasuries decline? (Hint: Read the latest FOMC minutes).

by Calculated Risk on 2/26/2025 10:40:00 AM

Today, in the Calculated Risk Real Estate Newsletter: New Home Sales Decrease to 657,000 Annual Rate in January

Brief excerpt:

The Census Bureau reported New Home Sales in January were at a seasonally adjusted annual rate (SAAR) of 657 thousand. The previous three months were revised up.
...
The next graph shows new home sales for 2024 and 2025 by month (Seasonally Adjusted Annual Rate). Sales in January 2025 were down 1.1% from January 2024.

New home sales, seasonally adjusted, have increased year-over-year in 19 of the last 22 months. This is essentially the opposite of what happened with existing home sales that had been down year-over-year every month for 3+ years (existing home sales have been up year-over-year for the last 4 months).

There is much more in the article.

by Calculated Risk on 2/26/2025 10:00:00 AM

The Census Bureau reports New Home Sales in January were at a seasonally adjusted annual rate (SAAR) of 657 thousand.

The previous three months were revised up.

Sales of new single-family houses in January 2025 were at a seasonally adjusted annual rate of 657,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 10.5 percent below the revised December rate of 734,000 and is 1.1 percent below the January 2024 estimate of 664,000.
emphasis added

Click on graph for larger image.

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

New home sales were slightly below pre-pandemic levels.

The second graph shows New Home Months of Supply.

The months of supply increased in January to 9.0 months from 8.0 months in December.

The all-time record high was 12.2 months of supply in January 2009. The all-time record low was 3.3 months in August 2020.

This is well above the top of the normal range (about 4 to 6 months of supply is normal).

"The seasonally-adjusted estimate of new houses for sale at the end of January was 495,000. This represents a supply of 9.0 months at the current sales rate."

Sales were below expectations of 678 thousand SAAR, however sales for the three previous months were revised up. I'll have more later today.

by Calculated Risk on 2/26/2025 07:00:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 21, 2025.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week and was 45 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 0 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 3 percent higher than the same week one year ago.

“Treasury yields moved lower on softer consumer spending data as consumers are feeling somewhat less upbeat about the economy and job market. This pushed mortgage rates lower, with the 30-year fixed rate decreasing to 6.88 percent, the lowest rate since mid-December,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Applications were about one percent lower for the week, which included the President’s Day holiday, as purchase applications stayed flat from a week ago while refinance applications saw a small decline. Purchase applications were up 3 percent from the same week last year. Increasing for-sale inventory in some markets has provided prospective buyers more options as we approach the spring homebuying season.”

Added Kan, “Although overall refinance application activity remained fairly weak, FHA refinance applications saw an 8 percent increase over the week. Compared to last year, overall refinance applications were up 45 percent.
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.88 percent from 6.93 percent, with points decreasing to 0.61 from 0.66 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 3% year-over-year unadjusted. 

Red is a four-week average (blue is weekly).  

Purchase application activity is up about 15% from the lows in late October 2023 and is now 4% below the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index remains very low.

by Calculated Risk on 2/25/2025 07:41:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

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

• At 10:00 AM, New Home Sales for January from the Census Bureau. The consensus is that new home sales decreased to 678 thousand SAAR, down from 698 thousand in December.

by Calculated Risk on 2/25/2025 04:16:00 PM

A few key points:
1) There is a clear seasonal pattern for house prices.
2) The surge in distressed sales during the housing bust distorted the seasonal pattern.  This was because distressed sales (at lower price points) happened at a steady rate all year, while regular sales followed the normal seasonal pattern.  This made for larger swings in the seasonal factor during the housing bust.

3) The seasonal swings have increased recently without a surge in distressed sales.

Click on graph for larger image.

This graph shows the month-to-month change in the NSA Case-Shiller National index since 1987 (through December 2024). The seasonal pattern was smaller back in the '90s and early '00s and increased once the bubble burst.

The seasonal swings declined following the bust, however the pandemic price surge changed the month-over-month pattern.

The second graph shows the seasonal factors for the Case-Shiller National index since 1987. The factors started to change near the peak of the bubble, and really increased during the bust since normal sales followed the regular seasonal pattern - and distressed sales happened all year.   

The swings in the seasonal factors were decreasing following the bust but have increased again recently - this time without a surge in distressed sales.

by Calculated Risk on 2/25/2025 01:11:00 PM

The FDIC released the Quarterly Banking Profile for Q4 2024:

Full-Year ROA and Net Income Increased in 2024
The banking industry reported full-year net income of $268.2 billion, up $14.1 billion (5.6 percent) from 2023. The aggregate return-on-assets ratio (ROA) increased 3 basis points to 1.12 percent. The increase primarily occurred due to one-time events in 2023 and 2024 that led to lower noninterest expense (down $8.5 billion, or 1.4 percent), higher noninterest income (up $6.0 billion, or 2.0 percent), and lower realized securities losses (down $5.3 billion, or 46.3 percent) in 2024. The full-year net interest margin decreased to 3.22 percent, down 8 basis points from 2023.
...
Asset Quality Metrics Remained Generally Favorable, Though Weakness in Certain Portfolios Persisted
Past-due and nonaccrual (PDNA) loans, or loans 30 or more days past due or in nonaccrual status, increased 7 basis points from the prior quarter to 1.60 percent of total loans. The industry’s PDNA ratio remained below the pre-pandemic average of 1.94 percent. The PDNA ratio for non-owner occupied commercial real estate (CRE) loans declined 5 basis points to 2.02 percent but remained 129 basis points above the pre-pandemic average. Despite declining slightly in the fourth quarter, the PDNA rate for the non-owner occupied CRE portfolio remained elevated, largely driven by office loans at banks with more than $250 billion in assets. However, these banks tend to have lower concentrations of such loans in relation to total assets and capital than smaller institutions, mitigating the overall risk.

The industry’s net charge-off ratio increased 4 basis points from the prior quarter to 0.70 percent, 5 basis points higher than the year-earlier quarter and 22 basis points above the pre-pandemic average. The credit card net charge-off ratio was 4.57 percent in the fourth quarter, up 9 basis points quarter over quarter and 109 basis points above the pre-pandemic average.
emphasis added

Click on graph for larger image.

From the FDIC:

The Number of Problem Banks Decreased in the Fourth Quarter
The number of banks on the FDIC’s “Problem Bank List” decreased from 68 to 66 in the fourth quarter. Problem banks represented 1.5 percent of total banks at year-end, which is within the normal range of 1 to 2 percent of all banks during non-crisis periods.

This graph from the FDIC shows the number of problem banks.

by Calculated Risk on 2/25/2025 09:54:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Case-Shiller: National House Price Index Up 3.9% year-over-year in December

Excerpt:

S&P/Case-Shiller released the monthly Home Price Indices for December ("December" is a 3-month average of October, November and December closing prices). December closing prices include some contracts signed in August, 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).

The MoM increase in the seasonally adjusted (SA) Case-Shiller National Index was at 0.46% (a 5.7% annual rate), This was the 23rd consecutive MoM increase in the seasonally adjusted index.

On a seasonally adjusted basis, prices increased month-to-month in 18 of the 20 Case-Shiller cities (prices declined in Washington, D.C. and Tampa seasonally adjusted). San Francisco has fallen 5.7% from the recent peak, Phoenix is down 1.2% from the peak, and Tampa down 1.2%.

There is much more in the article.

by Calculated Risk on 2/25/2025 09:00:00 AM

S&P/Case-Shiller released the monthly Home Price Indices for December ("December" is a 3-month average of October, November and December closing 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 Records 3.9% Annual Gain in December 2024

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 3.9% annual return for December, up from a 3.7% annual gain in the previous month. The 10-City Composite saw an annual increase of 5.1%, up from a 5% annual increase in the previous month. The 20-City Composite posted a year-over-year increase of 4.5%, up from a 4.3% increase in the previous month. New York again reported the highest annual gain among the 20 cities with a 7.2% increase in December, followed by Chicago and Boston with annual increases of 6.6% and 6.3%, respectively. Tampa posted the lowest return, falling 1.1%.
...
The pre-seasonally adjusted U.S. National and 20-City Composite Indices’ upward trends continued to reverse in December, with both posting a -0.1% drop. The 10-City Composite’s monthly return dropped 0.04%.

After seasonal adjustment, the U.S. National, 20-City, and 10-City Composite Indices all posted a month-over-month increase of 0.5%.

“It has been five years since the Covid-19 outbreak took hold of the global economy, sparking unprecedented volatility, massive fiscal and monetary stimulus, and a housing market that responded to national migratory changes in how we work and where we live,” says Brian D. Luke, CFA, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. “National home prices have risen by 8.8% annually since 2020, led by markets in Florida, North Carolina, Southern California, and Arizona. While our National Index continues to trend above inflation, we are a few years removed from peak home price appreciation of 18.9% observed in 2021 and are seeing below-trend growth over the history of the index.

“Home prices stalled during the second half of the year with markets in the West dropping the fastest. San Francisco, the worst performing market since 2020, dropped 4.5% during the last six months of the year, followed by Seattle with a 3.0% decline. San Francisco is now 11.0% lower than its post-pandemic peak reached in May 2022. Previous strongholds like San Diego and Tampa experienced declines of 2.9% and 2.7%, respectively, during the second half of the year. After accounting for seasonal adjustments, our National Index pushed forward to achieve a 19th consecutive all-time high,” Luke continued. “The longest such streak occurred for over 12-years, notching 153 consecutive all-time highs from July 1993 to March 2006.

“The Northeast continues to lead all regions with above-trend growth, led by New York for the eighth consecutive time. Boston reached an all-time high, the only market to do so for the period ended December 2024."
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 was up 0.5% in December (SA).  The Composite 20 index was up 0.5% (SA) in December.

The National index was up 0.5% (SA) in December.

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

The Composite 10 NSA was up 5.1% year-over-year.  The Composite 20 NSA was up 4.5% year-over-year.

The National index NSA was up 3.9% year-over-year.

Annual price changes were close to expectations.  I'll have more later.

by Calculated Risk on 2/24/2025 07:06:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Start New Week at 2 Month Lows

Mortgage rates were already in line with the lowest levels since December 18th by last Thursday. They dropped to the best levels since December 12th a day later. end of last week.
...
The bond market (which underlies and dictates interest rate movement) was very calm today after early gains. Investors are waiting to see Friday's PCE inflation data before making any big moves in either direction ... [30 year fixed 6.87%]
emphasis added

Tuesday:
• At 9:00 AM ET, FHFA House Price Index for December 2024. This was originally a GSE only repeat sales, however there is also an expanded index.

• At 9:00 AM, S&P/Case-Shiller House Price Index for December. The consensus is for a 4.5% year-over-year increase in the Comp 20 index for December, up from 4.3% in November.

• At 10:00 AM, Richmond Fed Survey of Manufacturing Activity for February.

by Calculated Risk on 2/24/2025 12:56:00 PM

From WardsAuto: February U.S. Light-Vehicle Sales Maintain Growth; Inventory Resumes Gains (pay content).  Brief excerpt:

Sales are recording solid gains, but production slowdowns capping dealer stock in a growth market – a market that ostensibly still is climbing out of the trough caused by the pandemic and supply-chain issues - suggest the industry overall wants to maintain profit margins but also has a high level of uncertainty about 2025 and does not want to be in a position of having to make sudden, bigger cuts if the market weakens at some point this year.
emphasis added

Click on graph for larger image.

This graph shows actual sales from the BEA (Blue), and Wards forecast for February (Red).

On a seasonally adjusted annual rate basis, the Wards forecast of 15.9 million SAAR, would be up 1.9% from last month, and up 1.5% from a year ago.

by Calculated Risk on 2/24/2025 10:51:00 AM

Earlier, in the CalculatedRisk Real Estate Newsletter on January existing home sales, NAR: Existing-Home Sales Decreased to 4.08 million SAAR in January, I mentioned that the median price typically bottoms seasonally in January (contracts signed mostly in November and December) and peaks in June (April and May contracts).

Below is a table of the seasonal changes from January to June (all median prices Not Seasonally Adjusted, NSA).

Note: In 2020, prices increased late into the year and peaked in October, but prices peaked in June for all the other years.

Change in Median House Price from January to June
	2018	2019	2020	2021	2022	2023
January to June	13.7%	14.4%	10.6%	20.8%	16.8%	12.8%

The NAR reported the median price was $396,900 in January 2025, down 7.0% from $426,900 in June 2024.  

We should expect the median price to increase seasonally over the next 5 months, but only slightly in February.

by Calculated Risk on 2/24/2025 08:11:00 AM

Altos reports that active single-family inventory was up 0.3% week-over-week.

Inventory always declines seasonally in the Winter and usually bottoms in January or February. Inventory is now up 2.5% from the bottom six weeks ago in January.

The first graph shows the seasonal pattern for active single-family inventory since 2015.

Click on graph for larger image.

The red line is for 2025.  The black line is for 2019.  

Inventory was up 28.7% compared to the same week in 2024 (last week it was up 29.2%), and down 21.9% compared to the same week in 2019 (last week it was down 22.1%). 

Back in June 2023, inventory was down almost 54% compared to 2019, so the gap to more normal inventory levels has closed significantly!

This second inventory graph is courtesy of Altos Research.

As of Feb 21st, inventory was at 640 thousand (7-day average), compared to 638 thousand the prior week. 

Mike Simonsen discusses this data regularly on Youtube

by Calculated Risk on 2/23/2025 06:17:00 PM

Weekend:
• Schedule for Week of February 23, 2025

• Housing Starts and Recessions

Monday:
• At 8:30 AM ET, Chicago Fed National Activity Index for January. This is a composite index of other data.

• At 10:30 AM, Dallas Fed Survey of Manufacturing Activity for February.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 13 and DOW futures are up 67 (fair value).

Oil prices were down over the last week with WTI futures at $70.40 per barrel and Brent at $74.43 per barrel. A year ago, WTI was at $78, and Brent was at $84 - so WTI oil prices are down about 10% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.11 per gallon. A year ago, prices were at $3.26 per gallon, so gasoline prices are down $0.15 year-over-year.

by Calculated Risk on 2/23/2025 11:04:00 AM

This morning, Carl Quintanilla posted a graph on Bluesky from BESPOKE suggesting the US is heading towards a recession.

Quintanilla quoted BESPOKE:

“On a 12-month average basis, .. Housing Starts have completely rolled over from their peak ..

“.. Recessions have always followed a rollover in Housing Starts, and the only question is timing.”

Housing is the basis of one of my favorite models for business cycle forecasting.  And policy changes will clearly have a negative impact on homebuilders.  Early in February, I expressed my "increasing concern" about the negative economic impact of "executive / fiscal policy errors", however, I concluded that post by noting that I was not currently on recession watch.

Here is an update to a graph that uses new home sales, single family housing starts and residential investment.  (I prefer single family starts to total starts).   The purpose of this graph is to show that these three indicators generally reach peaks and troughs together. Note that Residential Investment is quarterly and single-family starts and new home sales are monthly.

The arrows point to some of the earlier peaks and troughs for these three measures - and the most recent peak.

New home sales peaked in 2020 as pandemic buying soared.  Then new home sales and single-family starts turned down in 2021, but that was partly due to the huge surge in sales during the pandemic.   In 2022, both new home sales and single-family starts turned down in response to higher mortgage rates.   

This decline in residential investment would typically have suggested that a recession was coming, however I looked past the pandemic distortions and correctly predicted no recession!  The low level of existing home inventory led me to predict that new home sales would pick up - and that happened.  We can't be a slave to any model.

This second graph shows the YoY change in New Home Sales from the Census Bureau.  Currently new home sales (based on 3-month average) are down 1% year-over-year!

Usually when the YoY change in New Home Sales falls about 20%, a recession will follow.  An exception for this data series was the mid '60s when the Vietnam buildup kept the economy out of recession.   Another exception was in late 2021 - we saw a significant YoY decline in new home sales related to the pandemic and the surge in new home sales in the second half of 2020.  I ignored that downturn as a pandemic distortion.  Also note that the sharp decline in 2010 was related to the housing tax credit policy in 2009 - and was just a continuation of the housing bust.

The YoY change in new home sales in late 2022 and early 2023 suggested a possible recession.  But as I noted earlier, I was able to look past the pandemic distortion and was able to predict a pickup in new home sales due to the low level of existing home inventory and because homebuilders could offer mortgage incentives that would somewhat offset the sharp increase in mortgage rates.

Another indicator I like to use is heavy truck sales.  This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the January 2025 seasonally adjusted annual sales rate (SAAR). Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Heavy truck sales were at 534 thousand SAAR in January, up from 454 thousand in December, and up 4.6% from 510 thousand SAAR in January 2025.

Usually, heavy truck sales decline sharply prior to a recession, however sales were strong in January.

I share BESPOKE's concern about the potential negative impact of policy on housing starts, but I think it is way too early to start predicting a recession.

by Calculated Risk on 2/22/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• NAR: Existing-Home Sales Decreased to 4.08 million SAAR in January

• Housing Starts Decreased to 1.366 million Annual Rate in January

• The "Neutral" Rate and Implications for 30-year Mortgage Rates

• California Home Sales Down 1.9% YoY in January; 4th Look at Local Housing Markets

• Lawler: Early Read on Existing Home Sales in January

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

by Calculated Risk on 2/22/2025 08:11:00 AM

The key reports this week are January New Home sales, the second estimate of Q4 GDP, Personal Income and Outlays for January, and Case-Shiller house prices.

For manufacturing, the February Dallas, Kansas City, and Richmond Fed manufacturing surveys will be released.

----- Monday, February 24th -----
8:30 AM ET: Chicago Fed National Activity Index for January. This is a composite index of other data.

10:30 AM: Dallas Fed Survey of Manufacturing Activity for February.

----- Tuesday, February 25th -----
9:00 AM: FHFA House Price Index for December 2024. This was originally a GSE only repeat sales, however there is also an expanded index.

9:00 AM: S&P/Case-Shiller House Price Index for December.

This graph shows the year-over-year change for the Case-Shiller National, Composite 10 and Composite 20 indexes, through the most recent report (the Composite 20 was started in January 2000).

The consensus is for a 4.5% year-over-year increase in the Comp 20 index for December, up from 4.3% in November.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for February.

----- Wednesday, February 26th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index.

10:00 AM: New Home Sales for January 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 that new home sales decreased to 678 thousand SAAR, down from 698 thousand in December.

----- Thursday, February 27th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for an increase to 225 thousand from 219 thousand last week.

8:30 AM: Gross Domestic Product, 4th Quarter and Year 2024 (Second Estimate) The consensus is that real GDP increased 2.3% annualized in Q4, unchanged from the advance estimate of 2.3%.

8:30 AM: Durable Goods Orders for January from the Census Bureau. The consensus is for a 1.8% increase in durable goods orders.

10:00 AM: Pending Home Sales Index for January. The consensus is for a 1.2% decrease in the index.

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

----- Friday, February 28th -----
8:30 AM ET: Personal Income and Outlays for January. The consensus is for a 0.3% increase in personal income, and for a 0.2% increase in personal spending. And for the Core PCE price index to increase 0.2%.  PCE prices are expected to be up 2.5% YoY, and core PCE prices up 2.6% YoY.

9:45 AM: Chicago Purchasing Managers Index for February.

by Calculated Risk on 2/21/2025 07:03:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly.

Note: "Effective May 1, 2024, hospitals are no longer required to report COVID-19 hospital admissions, hospital capacity, or hospital occupancy data."  So I'm no longer tracking hospitalizations.

COVID Metrics
	Now	Week Ago	Goal
Deaths per Week	859	953	≤3501
1my goals to stop weekly posts. 🚩 Increasing number weekly for Deaths. ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported since Jan 2023.

Although weekly deaths met the original goal to stop posting in June 2023 (low of 314 deaths), I'm continuing to post now that deaths are above the goal again - and I'll continue to post until weekly deaths are once again below the goal.

Weekly deaths are now decreasing following the winter pickup.

And here is a graph I'm following concerning COVID in wastewater as of February 20th:

This appears to be a leading indicator for COVID hospitalizations and deaths.  This has moving down recently.

Nationally COVID in wastewater is "Moderate", down from "High" last week, according to the CDC.   

by Calculated Risk on 2/21/2025 02:06:00 PM

From BofA:

We initiated our 1Q US GDP tracker with the January retail sales print on February 14. Since then, our 1Q GDP tracker is down two-tenths to 2.3% q/q saar from our official forecast of 2.5% q/q saar. Meanwhile, our 4Q GDP tracking is down two-tenths to 2.2% q/q saar since our last weekly publication. [Feb 21st]
emphasis added

From Goldman:

[W]e lowered our Q1 GDP tracking estimate by 0.1pp to +1.9% (quarter-over-quarter annualized) and our Q1 domestic final sales estimate by 0.1pp to +2.1%. We left our Q4 past quarter tracking estimate unchanged at +2.1%. [Feb 19th estimate]

And from the Atlanta Fed: GDPNow

[T]he GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is 2.3 percent on February 19, unchanged from February 14 after rounding. [Feb 19th estimate]

by Calculated Risk on 2/21/2025 11:05:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: NAR: Existing-Home Sales Decreased to 4.08 million SAAR in January

Excerpt:

Sales in January (4.08 million SAAR) were down 4.9% from the previous month and were 2.0% above the January 2024 sales rate. This was the fourth consecutive year-over-year increase after declining YoY every month for over 3 years.
...
Sales Year-over-Year and Not Seasonally Adjusted (NSA)

The fourth graph shows existing home sales by month for 2024 and 2025.

Sales increased 2.0% year-over-year compared to January 2024.

There is much more in the article.

by Calculated Risk on 2/21/2025 10:00:00 AM

From the NAR: Existing-Home Sales Decreased 4.9% in January, But Increased Year-Over-Year for Fourth Consecutive Month

Existing-home sales retreated in January, according to the National Association of REALTORS®. Sales slipped in three major U.S. regions and held steady in the Midwest. Year-over-year, sales rose in three regions and were unchanged in the South.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – descended 4.9% from December to a seasonally adjusted annual rate of 4.08 million in January. Year-over-year, sales improved 2.0% (up from 4 million in January 2024).
...
Total housing inventory registered at the end of January was 1.18 million units, up 3.5% from December and 16.8% from one year ago (1.01 million). Unsold inventory sits at a 3.5-month supply at the current sales pace, up from 3.2 months in December and 3.0 months in January 2024.
emphasis added

Click on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1994.

Sales in January (4.08 million SAAR) were down 4.9% from the previous month and were 2.0% above the January 2024 sales rate.  This was the fourth consecutive year-over-year increase after declining YoY every month for over 3 years.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 1.18 million in January from 1.14 million the previous month.

Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory was up 16.8% year-over-year (blue) in January compared to January 2024.

Months of supply (red) increased to 3.5 months in January from 3.2 months the previous month.

The sales rate was below the consensus forecast.  I'll have more later. 

by Calculated Risk on 2/21/2025 08:07:00 AM

From ICE: ICE First Look at Mortgage Performance: Foreclosure Starts Jump as VA Moratorium Ends; Wildfire Delinquencies Emerge

• Delinquencies fell 24 basis points (bps) to 3.47% in January; that’s 10 bps higher than last year, but 33 bps below pre-pandemic levels

• Foreclosure starts jumped by 30% and sales rose by 25% in January – driven by an expiration in the VA foreclosure moratorium – with active inventory rising by 7% in the month

• While the number of borrowers past due as a result of last year’s hurricanes has fallen from 58K to 41K in recent months, the financial impact from the recent Los Angeles wildfires is emerging

• An estimated 680 homeowners in the path of the Los Angeles wildfires missed their January mortgage payment, and ICE’s daily mortgage performance data suggests the number of past-due borrowers could surpass 2,800 by the end of February.

• Prepayment activity (SMM) fell to 0.48% in January, its lowest level in nearly a year, driven by the combination of modestly higher rates and the typical seasonal slowdown in home sale activity
emphasis added

Click on graph for larger image.

Here is a table from ICE.

by Calculated Risk on 2/20/2025 07:01:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Friday:
• At 10:00 AM ET, Existing Home Sales for January from the National Association of Realtors (NAR). The consensus is for 4.17 million SAAR, down from 4.24 million.

• Also at 10:00 AM, University of Michigan's Consumer sentiment index (Final for February).

by Calculated Risk on 2/20/2025 03:25:00 PM

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For January, Realtor.com reported inventory was up 24.6% YoY, but still down 24.8% compared to the 2017 to 2019 same month levels. 

 Now - on a weekly basis - inventory is up 27.6% YoY.

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View—Data for Week Ending Feb. 15, 2025

• Active inventory increased, with for-sale homes 27.6% above year-ago levels

For the 67th consecutive week, the number of homes for sale has increased compared with the same time last year. This week also marked the sixth straight week where the growth rate has increased, fueled by the entrance of many new listings on the market.

• New listings—a measure of sellers putting homes up for sale—increased 5%

Newly listed inventory increased year over year for the sixth week in a row, as sellers go online for the spring buying season. Despite mortgage rates remaining stubbornly high and many prospective sellers feeling the lock-in effect due to their lower previous rates, new homes are hitting the market at a faster pace than in 2024 at this time.

Here is a graph of the year-over-year change in inventory according to realtor.com. 

Inventory was up year-over-year for the 67th consecutive week.  

New listings have jumped recently but remain below typical pre-pandemic levels.

by Calculated Risk on 2/20/2025 12:36:00 PM

Today, in the Calculated Risk Real Estate Newsletter: California Home Sales Down 1.9% YoY in January; 4th Look at Local Housing Markets

A brief excerpt:

Here a few more local markets prior to the NAR release tomorrow.

The NAR is scheduled to release January Existing Home sales on Friday, February 21st at 10:00 AM. The consensus is for 4.10 million SAAR, down from 4.24 million in December. Last year, the NAR reported sales in January 2024 at 4.00 million SAAR.

Housing economist Tom Lawler expects the NAR to report sales of 4.09 million SAAR for January.
...
From the California Association of Realtors® (C.A.R.): Elevated mortgage rates drag down January home sales, C.A.R. reports

January’s sales pace fell from the 282,490 homes sold in December and was down 1.9 percent from a year ago, when a revised 259,160 homes were sold on an annualized basis. The January sales level was the lowest in 13 months, and the double-digit month-to-month sales decline was the biggest decrease in 30 months. The year-over-year decline was the first in eight months.

...
Several local markets - like Illinois, Miami, New Jersey and New York - will report after the NAR release.

There is much more in the article.