by Calculated Risk on 11/26/2019 09:15:00 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.

Note: Case-Shiller reports Not Seasonally Adjusted (NSA), I use the SA data for the graphs.

From S&P: Cities in Sun Belt Region Lead In Annual Gains According To S&P CoreLogic Case-Shiller Index

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 3.2% annual gain in September, up from 3.1% in the previous month. The 10-City Composite annual increase came in at 1.5%, no change from the previous month. The 20-City Composite posted a 2.1% year-over-year gain, up from 2.0% in the previous month.

Phoenix, Charlotte and Tampa reported the highest year-over-year gains among the 20 cities. In September, Phoenix led the way with a 6.0% year-over-year price increase, followed by Charlotte with a 4.6% increase and Tampa with a 4.5% increase. Ten of the 20 cities reported greater price increases in the year ending September 2019 versus the year ending August 2019.
...
Before seasonal adjustment, the National Index posted a month-over-month increase of 0.1% in September. The 10-City Composite did not post any gains and the 20-City Composite posted a 0.1% increase for the month. After seasonal adjustment, the National Index recorded a 0.4% month-over-month increase in September. The 10-City Composite posted a 0.2% increase and the 20-City Composite posted a 0.4% increase. In September, 12 of 20 cities reported increases before seasonal adjustment while 17 of 20 cities reported increases after seasonal adjustment.

"September’s report for the U.S. housing market is reassuring,” says Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices. “The national composite index rose 3.2% relative to year-ago levels, with smaller increases in our 10- and 20-city composites. Of the 20 cities in the composite, only one (San Francisco) saw a year-over-year price decline in September.

“After a long period of decelerating price increases, it’s notable that in September both the national and 20-city composite indices rose at a higher rate than in August, while the 10-city index’s September rise matched its August performance. It is, of course, too soon to say whether this month marks an end to the deceleration or is merely a pause in the longer-term trend."
emphasis added

I'll have more later.

by Calculated Risk on 11/25/2019 09:21:00 PM

Tuesday:
• At 9:00 AM ET, S&P/Case-Shiller House Price Index for September. The consensus is for a 3.2% year-over-year increase in the National index for September.

• At 9:00 AM, FHFA House Price Index for September 2018. This was originally a GSE only repeat sales, however there is also an expanded index.

• At 10:00 AM, New Home Sales for October from the Census Bureau. The consensus is for 707 thousand SAAR, up from 701 thousand in September.

• Also at 10:00 AM, Richmond Fed Survey of Manufacturing Activity for November. This is the last of the regional Fed manufacturing surveys for November.

by Calculated Risk on 11/25/2019 07:14:00 PM

From Fed Chair Jerome Powell: Building on the Gains from the Long Expansion Excerpt on inflation:

For many years as the economy recovered from the Great Recession, inflation averaged around 1.5 percent—below our 2 percent objective. We had long expected that inflation would gradually rise as the expansion continued, and, as I noted, both overall and core inflation ran at rates consistent with our goal for much of 2018. But this year, inflation is again running below 2 percent.

It is reasonable to ask why inflation running somewhat below 2 percent is a big deal. We have heard a lot about inflation at our Fed Listens events. People are concerned about the rising cost of medical care, of housing, and of college, but nobody seems to be complaining about overall inflation running below 2 percent. Even central bankers are not concerned about any particular minor fluctuation in inflation.

Around the world, however, we have seen that inflation running persistently below target can lead to an unhealthy dynamic in which inflation expectations drift down, pulling actual inflation further down. Lower inflation can, in turn, pull interest rates to ever-lower levels. The experience of Japan, and now the euro area, suggests that this dynamic is very difficult to reverse, and once under way, it can make it harder for a central bank to support its economy by further lowering interest rates. That is why it is essential that we at the Fed use our tools to make sure that we do not permit an unhealthy downward drift in inflation expectations and inflation. We are strongly committed to symmetrically and sustainably achieving our 2 percent inflation objective so that in making long-term plans, households and businesses can reasonably expect 2 percent inflation over time.

by Calculated Risk on 11/25/2019 05:04:00 PM

From Matthew Graham at MortgageNewsDaily: Mortgage Rates Higher to Start Holiday Week

Mortgage rates finally moved a bit higher today after avoiding such things for nearly 2 full weeks. The losses were mild today, but nonetheless take the average lender back in line with rates from November 15th. This is more of a commentary on the narrowness of the recent range than the scope of today's weakness. [Today's Most Prevalent Rates For Top Tier Scenarios 30YR FIXED - 3.75%]

Click on graph for larger image.

This graph from Mortgage News Daily shows mortgage rates since 2000.

This graph is interactive, and you could view mortgage rates back to the mid-1980s - click here for graph.

by Calculated Risk on 11/25/2019 10:47:00 AM

From the Dallas Fed: Texas Manufacturing Activity Weakens Slightly

Texas factory activity contracted slightly in November, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, dipped into negative territory for the first time since mid-2016, falling seven points to -2.4.

Other measures of manufacturing activity were also negative in November, suggesting declines. The new orders index remained negative for a second month in a row, coming in at -3.0. The growth rate of orders index pushed further into negative territory, falling from -5.9 to -9.3. The capacity utilization and shipments indexes turned negative after three years in positive territory, falling to -5.3 and -4.5, respectively.

Perceptions of broader business conditions worsened slightly in November. The general business activity index remained negative but moved up from -5.1 to -1.3.
…
Labor market measures suggested stable employment levels and shorter workweeks this month. The employment index retreated from 11.0 to 0.9, with the near-zero reading suggesting little to no job growth on balance. Eighteen percent of firms noted net hiring, while 17 percent noted net layoffs. The hours worked index dipped from 4.7 to -4.3.
emphasis added

Another weak regional manufacturing survey. The last regional survey for November (Richmond) will be released tomorrow.

by Calculated Risk on 11/25/2019 08:49:00 AM

From Black Knight: Black Knight’s First Look: Strong Decline in October Mortgage Delinquencies; Refi Wave Pushes Prepayments to Highest Level in More than Six Years

• The national delinquency rate fell to 3.39% in October, a nearly 7% decline from last year, and within 0.03% of the record low set in May 2019

• Serious delinquencies fell by 10,000 from September, while the number of loans in active foreclosure edged up slightly (+3,000)

• Prepayment activity climbed another 16% in October to the highest level since May 2013

• Prepays are now up 134% year-over-year as refinancing homeowners continue to take advantage of low interest rates

• However, modest rises in 30-year rates in recent weeks – coupled with seasonal slowing in home sales – may dampen prepayment rates in coming months

According to Black Knight's First Look report for October, the percent of loans delinquent decreased in October compared to September, and decreased 6.9% year-over-year.

The percent of loans in the foreclosure process increased 1.0% in October and were down 6.2% over the last year.

Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 3.39% in October, down from 3.53% in September.

The percent of loans in the foreclosure process increased slightly in to 0.48% from 0.48% in September.

Black Knight: Percent Loans Delinquent and in Foreclosure Process
	Oct 2019	Sep 2019	Oct 2018	Oct 2017
Delinquent	3.39%	3.53%	3.64%	4.44%
In Foreclosure	0.48%	0.48%	0.52%	0.68%
Number of properties:
Number of properties that are delinquent, but not in foreclosure:	1,786,000	1,854,000	1,884,000	2,262,000
Number of properties in foreclosure pre-sale inventory:	255,000	252,000	267,000	348,000
Total Properties Delinquent or in foreclosure	2,041,000	2,106,000	2,152,000	2,610,000

by Calculated Risk on 11/25/2019 08:37:00 AM

From the Chicago Fed: Chicago Fed National Activity Index Suggests Economic Growth Slowed Further in October

Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.71 in October from –0.45 in September. Two of the four broad categories of indicators that make up the index decreased from September, and all four categories made negative contributions to the index in October. The index’s three-month moving average, CFNAI-MA3, moved down to –0.31 in October from –0.21 in September.
emphasis added

This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967.

Click on graph for larger image.

This suggests economic activity was below the historical trend in October (using the three-month average).

According to the Chicago Fed:

The index is a weighted average of 85 indicators of growth in national economic activity drawn from four broad categories of data: 1) production and income; 2) employment, unemployment, and hours; 3) personal consumption and housing; and 4) sales, orders, and inventories.
...
A zero value for the monthly index has been associated with the national economy expanding at its historical trend (average) rate of growth; negative values with below-average growth (in standard deviation units); and positive values with above-average growth.

by Calculated Risk on 11/24/2019 06:59:00 PM

Weekend:
• Schedule for Week of November 24, 2019

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

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

• At 7:00 PM, Speech, Fed Chair Jerome Powell, Building on the Gains from the Long Expansion, At the Greater Providence Chamber of Commerce 2019 Annual Meeting, Providence, Rhode Island

From CNBC: Pre-Market Data and Bloomberg futures: S&P 500 are up 8, and DOW futures are up 67 (fair value).

Oil prices were up slightly over the last week with WTI futures at $57.98 per barrel and Brent at $63.58 barrel.  A year ago, WTI was at $52, and Brent was at $60 - so oil prices are mixed year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.58 per gallon. A year ago prices were at $2.55 per gallon, so gasoline prices are mostly unchanged year-over-year.

by Calculated Risk on 11/24/2019 10:07:00 AM

From HotelNewsNow.com: STR: US hotel results for week ending 16 November

The U.S. hotel industry reported negative year-over-year results in the three key performance metrics during the week of 10-16 November 2019, according to data from STR.

In comparison with the week of 11-17 November 2018, the industry recorded the following:

• Occupancy: -3.6% to 64.2%
• Average daily rate (ADR): -0.6% to US$129.96
• Revenue per available room (RevPAR): -4.2% to US$81.49
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Click on graph for larger image.

The red line is for 2019, dash light blue is 2018 (record year), blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).

Occupancy has been solid in 2019, and close to-date compared to the previous 4 years.

However occupancy will be lower this year than in 2018 (the record year).

Seasonally, the 4-week average of the occupancy rate will decline into the winter.

Data Source: STR, Courtesy of HotelNewsNow.com

by Calculated Risk on 11/23/2019 08:11:00 AM

The key reports this week are October New Home sales, and the second estimate of Q3 GDP.

Other key indicators include Personal Income and Outlays for October and Case-Shiller house prices for September.

For manufacturing, the Dallas and Richmond Fed manufacturing surveys will be released this week.

----- Monday, Nov 25th -----
8:30 AM ET: Chicago Fed National Activity Index for October. This is a composite index of other data.

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

7:00 PM: Speech, Fed Chair Jerome Powell, Building on the Gains from the Long Expansion, At the Greater Providence Chamber of Commerce 2019 Annual Meeting, Providence, Rhode Island

----- Tuesday, Nov 26th -----
9:00 AM ET: S&P/Case-Shiller House Price Index for September.

This graph shows graph shows the Year over year change in the seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the most recent report (the Composite 20 was started in January 2000).

The consensus is for a 3.2% year-over-year increase in the National index for September.

9:00 AM: FHFA House Price Index for September 2018. This was originally a GSE only repeat sales, however there is also an expanded index.

10:00 AM: New Home Sales for October 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 707 thousand SAAR, up from 701 thousand in September.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for November. This is the last of the regional Fed manufacturing surveys for November.

----- Wednesday, Nov 27th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 219,000 initial claims, down from 227,000 last week.

8:30 AM: Gross Domestic Product, 3nd quarter 2018 (Second estimate). The consensus is that real GDP increased 1.9% annualized in Q3, unchanged from the advance estimate of GDP.

8:30 AM: Durable Goods Orders for October from the Census Bureau. The consensus is for a 0.7% decrease in durable goods orders.

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

10:00 AM: Personal Income and Outlays for October. The consensus is for a 0.3% increase in personal income, and for a 0.3% increase in personal spending. And for the Core PCE price index to increase 0.2%.

10:00 AM: Pending Home Sales Index for October. The consensus is for a 0.2% increase in the index.

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

----- Thursday, Nov 28th -----
All US markets will be closed in observance of the Thanksgiving Day Holiday.

----- Friday, Nov 29th -----
The NYSE and the NASDAQ will close early at 1:00 PM ET.