by Calculated Risk on 6/18/2020 08:39:00 AM

The DOL reported:

In the week ending June 13, the advance figure for seasonally adjusted initial claims was 1,508,000, a decrease of 58,000 from the previous week's revised level. The previous week's level was revised up by 24,000 from 1,542,000 to 1,566,000. The 4-week moving average was 1,773,500, a decrease of 234,500 from the previous week's revised average. The previous week's average was revised up by 6,000 from 2,002,000 to 2,008,000.
emphasis added

The previous week was revised up.

This does not include the 760,526 initial claims for Pandemic Unemployment Assistance (PUA) - this was an increase from the previous week.

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 1,773,500.

This was higher than the consensus forecast of 1.4 million initial claims and the previous week was revised up.

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

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

Continued claims decreased slightly to 20,544,000 (SA) from 20,606,000 (SA) last week and will likely stay at a high level until the crisis abates.

Note: There are an additional 9,280,644 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 6/17/2020 08:33:00 PM

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for a 1.450 million initial claims, down from 1.542 million the previous week.

• Also at 8:30 AM, the Philly Fed manufacturing survey for June. The consensus is for a reading of -25.0, up from -43.1.

by Calculated Risk on 6/17/2020 06:07:00 PM

Note: I started posting this graph when the US was doing a few thousand tests per day. Clearly the US was way under testing early in the pandemic. I'll continue posting this graph daily at least until the percent positive is continuously under 3% and the daily positive is significantly lower than today.

The US is now conducting over 400,000 tests per day, and that might be enough to allow test-and-trace in some areas. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections, so the US still needs to increase the number of tests per day significantly.

According to Dr. Jha of Harvard's Global Health Institute, the US might need more than 900,000 tests per day .

There were 488,570 test results reported over the last 24 hours. There were 23,498 positive tests.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 4.9% (red line).

For the status of contact tracing by state, check out testandtrace.com.

by Calculated Risk on 6/17/2020 03:10:00 PM

Along with the monthly housing starts for May today, the Census Bureau released Quarterly Starts by Purpose and Design through Q1 2020.

This graph shows the NSA quarterly intent for four start categories since 1975: single family built for sale, owner built (includes contractor built for owner), starts built for rent, and condos built for sale.

Click on graph for larger image.

Single family starts built for sale (red) were up 13.1% in Q1 2020 compared to Q1 2019.

Owner built starts (orange) were up 10.3% year-over-year.

Condos built for sale increased, but are still pretty low.

The 'units built for rent' (blue) and were up 48.1% in Q1 2020 compared to Q1 2019.

by Calculated Risk on 6/17/2020 12:59:00 PM

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

1) Overall sales were at 6,860 in May, down from 6,925 in April, and down from 10,341 in May 2019. Sales were down 0.9% from April 2020 (last month), and down 33.7% from May 2019.

2) Active inventory was at 11,418, down from 16,260 in May 2019. That is down 29.8% year-over-year.

3) Months of supply decreased to 2.46 in May from 2.59 in April. This remains low.

Sales are reported at the close of escrow, so these sales were mostly signed in March and April.  Sales for May were negatively impacted by COVID since few contracts were likely signed in April, although it seems likely sales will rebound in June and/or July.

by Calculated Risk on 6/17/2020 10:13:00 AM

Although housing starts declined significantly in April - and remained fairly low in May - residential construction is considered essential, and starts did not decline as sharply as some other sectors.

Based on builder reports, and recent housing activity, I expect a significant increase in single family starts over the next couple of months.

Earlier: Housing Starts increased to 974 Thousand Annual Rate in May

Total housing starts in May were well below expectations, and revisions to prior months were negative (combined).

The housing starts report showed starts were up 4.3% in May compared to April, and starts were down 23.2% year-over-year compared to May 2019.

Single family starts were down 17.8% year-over-year, and multi-family starts were down 33.1% YoY.

This first graph shows the month to month comparison for total starts between 2019 (blue) and 2020 (red).

Click on graph for larger image.

Starts were down 23.2% in May compared to May 2019.

Last year, in 2019, starts picked up in the 2nd half of the year, so the comparisons are easy early in the year.

Starts, year-to-date, are only down 2.4% compared to the same period in 2019.

Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).

These graphs use a 12 month rolling total for NSA starts and completions.

The blue line is for multifamily starts and the red line is for multifamily completions.

The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession - then mostly moved sideways.  Completions (red line) had lagged behind - then completions caught up with starts- although starts picked up a little again lately.

The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions.

Note the relatively low level of single family starts and completions.  The "wide bottom" was what I was forecasting following the recession, and now I expect some further increases in single family starts and completions once the crisis abates.

by Calculated Risk on 6/17/2020 08:38:00 AM

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately-owned housing starts in May were at a seasonally adjusted annual rate of 974,000. This is 4.3 percent above the revised April estimate of 934,000, but is 23.2 percent below the May 2019 rate of 1,268,000. Single-family housing starts in May were at a rate of 675,000; this is 0.1 percent above the revised April figure of 674,000. The May rate for units in buildings with five units or more was 291,000.

Building Permits:
Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,220,000. This is 14.4 percent above the revised April rate of 1,066,000, but is 8.8 percent below the May 2019 rate of 1,338,000. Single-family authorizations in May were at a rate of 745,000; this is 11.9 percent above the revised April figure of 666,000. Authorizations of units in buildings with five units or more were at a rate of 434,000 in May.
emphasis added

Click on graph for larger image.

The first graph shows single and multi-family housing starts for the last several years.

Multi-family starts (red, 2+ units) were up in May compared to April.   Multi-family starts were down 33.1% year-over-year in May.

Single-family starts (blue) increased slightly in May, and were down 17.8% year-over-year.

The second graph shows total and single unit starts since 1968.

The second graph shows the huge collapse following the housing bubble, and then eventual recovery (but still historically low).

Total housing starts in May were well below expectations, and starts in April were revised down.

Residential construction is considered an essential business, and held up better than some other sectors of the economy, but was still negatively impacted by COVID-19.

I'll have more later …

by Calculated Risk on 6/17/2020 07:00:00 AM

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

Mortgage applications increased 8.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 12, 2020.

... The Refinance Index increased 10 percent from the previous week and was 106 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 21 percent higher than the same week one year ago.
...
“Purchase applications increased to the highest level in over 11 years and for the ninth consecutive week. The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Mortgage rates dropped to another record low in MBA’s survey, leading to a 10 percent surge in refinance applications. Refinancing continues to support households’ finances, as homeowners who refinance are able to gain savings on their monthly mortgage payments in a still-uncertain period of the economic recovery.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.30 percent from 3.38 percent, the lowest level in survey history, with points decreasing to 0.29 from 0.30 (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 refinance index since 1990.

The refinance index has been very volatile recently depending on rates and liquidity.

But the index is up signficantly from last year.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is up 21% year-over-year.  This index is at the highest level in over 11 years.

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

by Calculated Risk on 6/16/2020 09:10:00 PM

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

• At 8:30 AM, Housing Starts for May. The consensus is for 1.100 million SAAR, up from 0.891 million SAAR in April.

• At 12:00 PM, Testimony, Fed Chair Jerome Powell, Monetary Policy Report submitted to the Congress on June 12, 2020, pursuant to section 2B of the Federal Reserve Act, Before the Committee on Financial Services, U.S. House of Representatives

by Calculated Risk on 6/16/2020 06:03:00 PM

I wish we had more data. For example, it would be nice to know the reason for the tests - for example, was the testing because of symptoms?  Or close contact with an infected person?  Or a regular test for a healthcare worker?  Or precautionary for elective surgery? Etc.  It would be great to know the number of people tested as opposed to the number of tests.  But we are lucky to have this data (thanks to the hard work of the volunteers at the COVID Tracking Project

Note: I started posting this graph when the US was doing a few thousand tests per day. Clearly the US was way under testing early in the pandemic. I'll continue posting this graph daily at least until the percent positive is continuously under 3% and the daily positive is significantly lower than today.

The US is now conducting over 400,000 tests per day, and that might be enough to allow test-and-trace in some areas. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections, so the US still needs to increase the number of tests per day significantly.

According to Dr. Jha of Harvard's Global Health Institute, the US might need more than 900,000 tests per day .

There were 464,715 test results reported over the last 24 hours. There were 23,498 positive tests.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 5.1% (red line).

For the status of contact tracing by state, check out testandtrace.com.