by Calculated Risk on 5/22/2020 07:30:00 AM

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

From Black Knight: Black Knight: 4.75 Million Homeowners Now in COVID-19-Related Forbearance Plans; Nearly Half Made April Mortgage Payments

“Of the 4.25 million homeowners who were in active forbearance as of the end of April, nearly half – 46% – still made their April mortgage payment,” said Jabbour. “The fact that only 54% of borrowers in forbearance actually missed their payments helps explain the disparity between April’s delinquency and forbearance rates. However, just 21% of borrowers in forbearance have made their May payments, which could lead to another sharp increase in the national delinquency rate for May if those payments are not received before the end of the month.”

The McDash Flash Forbearance tracker shows that the 4.75 million loans in forbearance represent 9% of all active mortgages and account for a little over $1 trillion in unpaid principal. An estimated 7.1% of all GSE-backed loans and 12.6% of FHA/VA mortgages are now in forbearance. Over the past week, active forbearance volumes have increased by just 93,000, a more than 70% decline from the 325,000 in the first week of May.

CR Note: The delinquency rate in April increased sharply to 6.45%, but it would have been much higher if so many borrowers in forbearance hadn't made their mortgage payments (loans in forbearance are counted as delinquent in the survey).

by Calculated Risk on 5/21/2020 05:05:00 PM

In addition to having enough tests for test-and-trace, we also need people to conduct contact tracing.

There is a great new website that tracks the progress of each towards test-and-trace. The website also has resources on how to implement test-and-trace. This includes software, training resources, a calculator for how many people to hire and more. Every state should review this site!

Check it out.

In late April, Dr. Fauci said the US might be able to test 400,000 to 600,000 people per day sometime in May, and  testing is now close to that range. This might be enough to allow test-and-trace in some areas.  However, the US might need more than 900,000 tests per day according to Dr. Jha of Harvard's Global Health Institute.

There were 408,415 test results reported over the last 24 hours.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 6.2% (red line). The US probably needs enough tests to keep  the percentage positive well below 5%. (probably much lower based on testing in New Zealand).

NOTE: A few states - reportedly Virginia, Texas, Georgia, and Vermont - have apparently been including antibody tests with virus tests. The COVID tracking project is working to straighten that out.

by Calculated Risk on 5/21/2020 01:46:00 PM

Earlier: NAR: Existing-Home Sales Decreased to 4.33 million in April

A few key points:

1) Existing home sales are counted at the close of escrow, so this report is mostly for contracts signed in February and March. Some analysts think the April report will be the bottom for existing home sales - since purchase applications have increased recently - but my guess is that few contracts were signed in April, so reported sales in May (and maybe even June) will probably be lower.

2) Inventory is very low, and was down 19.7% year-over-year (YoY) in April. Inventory will probably stay fairly low as people wait to list their homes - and do not want strangers in their house.   This is the lowest level of inventory for April since at least the early 1990s.

Click on graph for larger image.

This graph shows existing home sales by month for 2019 and 2020.

Note that existing home sales picked up somewhat in the second half of 2019 as interest rates declined.

Even with weak sales in April, sales to date are only down about 0.8% compared to the same period in 2019.

The second graph shows existing home sales Not Seasonally Adjusted (NSA) by month (Red dashes are 2020), and the minimum and maximum for 2005 through 2019.

Sales NSA in April (373,000) were well below sales last year in April (456,000).

Sales NSA were just above the minimum for April in 2009 (349,000).

It seems likely reported sales in May will be below the post bubble low of 376,000 in May 2009.

by Calculated Risk on 5/21/2020 11:51:00 AM

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

STR data ending with 16 May showed continued modest gains in U.S. hotel performance compared with previous weeks. Year-over-year declines remain significant although not as severe as the levels recorded in April.

10-16 May 2020 (percentage change from comparable week in 2019):

• Occupancy: 32.4% (-54.1%)
• Average daily rate (ADR): US$77.55 (-42.4%)
• evenue per available room (RevPAR): US$25.12 (-73.6%)

“The trend of ‘less bad’ data continued with occupancy and ADR on a slow climb driven by a fifth consecutive week-to-week increase in demand,” said Jan Freitag, STR’s senior VP of lodging insights. “Last week’s data showed demand of more than 10 million room nights sold for the first time since the end of March, and this past week, the industry inched close to 11 million. All 50 states have at least partially reopened, so slow weekly demand growth should continue with more leisure activity around the country. Weekend occupancies continue to increase at a healthy clip, especially in drive-to destinations with beach access like Florida, or national park access, such as Gatlinburg, Tennessee. The industry will remain largely dependent on the leisure segment as uncertainty remains over when hotels will be ready to accommodate large events and group business.”
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 2020, dash light blue is 2019, blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).

During 2009 (black line), many hotels were struggling. At this point in the year, the 4-week average in 2009 was 57%. Now it is half that level at just 29%! (The median is 65%).

COVID-19 has crushed hotel occupancy.

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

by Calculated Risk on 5/21/2020 10:12:00 AM

From the NAR: Existing-Home Sales Wane 17.8% in April

Existing-home sales dropped in April, continuing what is now a two-month skid in sales brought on by the coronavirus pandemic, according to the National Association of Realtors®. Each of the four major regions experienced a decline in month-over-month and year-over-year sales, with the West seeing the greatest dip in both categories.

Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 17.8% from March to a seasonally-adjusted annual rate of 4.33 million in April. Overall, sales decreased year-over-year, down 17.2% from a year ago (5.23 million in April 2019).
...
Total housing inventory at the end of April totaled 1.47 million units, down 1.3% from March, and down 19.7% from one year ago (1.83 million). Unsold inventory sits at a 4.1-month supply at the current sales pace, up from 3.4-months in March and down from the 4.2-month figure recorded in April 2019.
emphasis added

Click on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in April (4.33 million SAAR) were down 17.8% from last month, and were 17.2% below the April 2019 sales rate.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory decreased to 1.47 million in April from 1.49 million in March.   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 down 19.7% year-over-year in April compared to April 2019.

Months of supply increased to 4.1 months in April.

This was close to the consensus forecast.  I'll have more later …

by Calculated Risk on 5/21/2020 08:57:00 AM

From the Philly Fed: May 2020 Manufacturing Business Outlook Survey

Manufacturing firms reported continued weakness in regional manufacturing activity this month, according to results from the Manufacturing Business Outlook Survey. Despite remaining well below zero, the survey’s current indicators for general activity, new orders, shipments, and employment rose this month after reaching long-term low readings in April. The firms expect the current slump in manufacturing activity to last less than six months, as the broadest indicator of future activity strengthened further from last month’s reading; furthermore, the firms continue to expect overall growth in new orders, shipments, and employment over the next six months.

After reaching a 40-year low in April, the diffusion index for current general activity rose 13 points to -43.1, its third consecutive negative reading. The percentage of firms reporting decreases this month (58 percent) far exceeded the percentage reporting increases (15 percent). … The firms continued to report overall decreases in manufacturing employment this month, but the current employment index increased 31 points to -15.3.
emphasis added

This was well close to the consensus forecast. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (yellow, through May), and five Fed surveys are averaged (blue, through April) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through April (right axis).

These early reports suggest the ISM manufacturing index will show significant contraction in May.

by Calculated Risk on 5/21/2020 08:37:00 AM

Update Another error this week: "In Massachusetts, PUA initial claims for the week ending May 16 were 115,952." With MA correction, total PUA claims is 1,158,081.

The DOL reported:

In the week ending May 16, the advance figure for seasonally adjusted initial claims was 2,438,000, a decrease of 249,000 from the previous week's revised level. The previous week's level was revised down by 294,000 from 2,981,000 to 2,687,000. The 4-week moving average was 3,042,000, a decrease of 501,000 from the previous week's revised average. The previous week's average was revised down by 73,500 from 3,616,500 to 3,543,000.
emphasis added

The previous week was revised down.

This does not include the 2,226,921 initial claims for Pandemic Unemployment Assistance (PUA).

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 decreased to 3,042,000.

This was close to the consensus forecast of 2.5 million.

The second graph shows seasonally adjust continued claims since 1967 (lags initial by one week while increasing sharply).

At the worst of the Great Recession, continued claims peaked at 6.635 million, but then steadily declined.

Continued claims have already increased to a new record high of 25,073,000 (SA) and will increase further over the next couple of weeks - and likely stay at a high level until the crisis abates.

Note: There are an additional 6,121,221 receiving Pandemic Unemployment Assistance (PUA). This is a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance.

by Calculated Risk on 5/21/2020 07:00:00 AM

Note: Loans in forbearance are counted as delinquent in this survey, so the delinquency rate jumped in April.

From Black Knight: Black Knight’s First Look: Past-Due Mortgages Increase by 1.6 Million in April, Largest Single-Month Increase Ever Recorded; Delinquency Rate Nearly Doubles

• 3.6 million homeowners were past due on their mortgages as of the end of April, the largest number since January 2015

• The number includes both homeowners past due on mortgage payments who are not in forbearance, as well as those in forbearance plans who did not make an April mortgage payment

• At 6.45%, the national delinquency rate nearly doubled (+3.06%) from March, the largest single-month increase ever recorded, and nearly three times the previous single-month record set back in late 2008

• There were declines in cure activity among later-stage delinquencies as well, with the number of seriously delinquent mortgages (90+ days) increasing by 56,000 (+14%) from March

• Both foreclosure starts and foreclosure sales hit record lows in April as moratoriums halted foreclosure activity across the country
emphasis added

According to Black Knight's First Look report for March, the percent of loans delinquent increased 90.2% in April compared to March, and increased 85.8% year-over-year.

The percent of loans in the foreclosure process decreased 3.8% in April and were down 19.3% 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 6.45% in April, up from 3.39% in March.

The percent of loans in the foreclosure process decreased in April to 0.40% from 0.42% in March.

The number of delinquent properties, but not in foreclosure, is up 1,558,000 properties year-over-year, and the number of properties in the foreclosure process is down 48,000 properties year-over-year.

Black Knight: Percent Loans Delinquent and in Foreclosure Process
	Apr 2020	Mar 2020	Apr 2019	Apr 2018
Delinquent	6.45%	3.39%	3.47%	3.67%
In Foreclosure	0.40%	0.42%	0.50%	0.61%
Number of properties:
Number of properties that are delinquent, but not in foreclosure:	3,400,000	1,792,000	1,812,000	1,885,000
Number of properties in foreclosure pre-sale inventory:	211,000	220,000	259,000	314,000
Total Properties	3,611,000	2,013,000	2,072,000	2,199,000

by Calculated Risk on 5/20/2020 09:36:00 PM

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for a 2.500 million initial claims, down from 2.981 million the previous week.

• At 8:30 AM, the Philly Fed manufacturing survey for May. The consensus is for a reading of -45.0, up from -56.6.

• At 10:00 AM, Existing Home Sales for April from the National Association of Realtors (NAR). The consensus is for 4.30 million SAAR, down from 5.27 million.

• At 2:30 PM, Speech, Fed Chair Jerome Powell, Opening Remarks, At Fed Listens: How is COVID-19 Affecting Your Community?

by Calculated Risk on 5/20/2020 06:33:00 PM

The Arizona Regional Multiple Listing Service (ARMLS) reports ("Stats Report"):

1) Overall sales were at 6,925 in April, down from 8,626 in March, and down from 9,493 in April 2019. Sales were down 19.7% from March 2020 (last month), and down 27.1% from April 2019.

2) Active inventory was at 13,889, down from 17,804 in April 2019. That is down 22% year-over-year.

3) Months of supply increased to 2.59 in April from 2.11 in March. This remains low.

Sales are reported at the close of escrow, so these sales were mostly signed in February and March.  Sales for May will be negatively impacted by COVID since few contracts were likely signed in April.