by Calculated Risk on 8/11/2020 06:05:00 PM

Note: There are some states having reporting problems.

The US is now mostly reporting over 700,000 tests per day. 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 (or take actions to push down the number of new infections).

There were 739,083 test results reported over the last 24 hours.

There were 55,594 positive tests.

See the graph on US Daily Deaths here.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 7.5% (red line).

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

And check out COVID Exit Strategy to see how each state is doing.

by Calculated Risk on 8/11/2020 12:16:00 PM

In July, the BLS reported "A July job gain in federal government (+27,000) reflected the hiring of temporary workers for the 2020 Census."

The Census Bureau released an update today on 2020 Census Paid Temporary Workers

As of the July reference week, there were 50,404 decennial Census temporary workers. As of last week, there were 155,239 temp workers.

This is an increase of almost 105,000. This week is the BLS reference week, and it seems likely the number of temporary workers will increase further.

This means the August employment report will show a sharp increase in Federal employment. Since these are temporary, and only happen every ten years with the decennial Census, it makes sense to adjust the headline monthly Current Employment Statistics (CES) by Census hiring to determine the underlying employment trend.

The correct adjustment method is to take the headline number and subtract the change in the number of Census 2020 temporary and intermittent workers. For more, see: How to Report the Monthly Employment Number excluding Temporary Census Hiring

by Calculated Risk on 8/11/2020 08:57:00 AM

From CoreLogic: Clouds on The Horizon for Many U.S. Homeowners: Overall Delinquency Rates Beginning to Climb, According to CoreLogic Loan Performance Insights Report

On a national level, 7.3% of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure). This represents a 3.7-percentage point increase in the overall delinquency rate compared to 3.6% in May 2019.

To gain an accurate view of the mortgage market and loan performance health, CoreLogic examines all stages of delinquency, including the share that transition from current to 30 days past due. In May 2020, the U.S. delinquency and transition rates, and their year-over-year changes, were as follows:

• Early-Stage Delinquencies (30 to 59 days past due): 3%, up from 1.7% in May 2019.

• Adverse Delinquency (60 to 89 days past due): 2.8%, up from 0.6% in May 2019.

• Serious Delinquency (90 days or more past due, including loans in foreclosure): 1.5%, up from 1.3% in May 2019. This is the first year-over-year increase in the serious delinquency rate since November 2010.

• Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.3%, down from 0.4% in May 2019. This is the second consecutive month the U.S. foreclosure rate was at its lowest level for any month since at least January 1999.

• Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 2.2%, up from 0.8% in May 2019. By comparison, in January 2007 — just before the start of the financial crisis — the current- to 30-day transition rate was 1.2%, while it peaked in November 2008 at 2%.

In the months leading up to the pandemic, U.S. mortgage performance was showing signs of sustained improvement. The national unemployment rate matched a 50-year low in February, and overall delinquency had been on an impressive 27 consecutive-month decline. However, by May 2020 — just two months after the coronavirus (COVID-19) was declared a global pandemic — U.S. unemployment surged past 13%, leaving over 4 million homeowners (accounting for more than 8% of all mortgages) little choice but to enter a COVID-19 mortgage forbearance program.

“The national unemployment rate soared from a 50-year low in February 2020, to an 80-year high in April,” said Dr. Frank Nothaft, chief economist at CoreLogic. “With the sudden loss of income, many homeowners are struggling to stay on top of their mortgage loans, resulting in a jump in non-payment.”

Absent further government programs and support, CoreLogic forecasts the U.S. serious delinquency rate to quadruple by the end of 2021, pushing 3 million homeowners into serious delinquency.

CR Note: Many of the delinquent borrowers are in forbearance plans, and, once they are employed, they will probably be able to pay their mortgages again.

by Calculated Risk on 8/10/2020 08:28:00 PM

Tuesday:
• At 6:00 AM ET, NFIB Small Business Optimism Index for July.

• At 8:30 AM, The Producer Price Index for July from the BLS. The consensus is for a 0.3% increase in PPI, and a 0.1% increase in core PPI.

• At 12:00 PM, MBA Q2 National Delinquency Survey

by Calculated Risk on 8/10/2020 06:56:00 PM

Note: There are some states having reporting problems.

The US is now mostly reporting over 700,000 tests per day. 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 (or take actions to push down the number of new infections).

There were 716,229 test results reported over the last 24 hours.

There were 41,807 positive tests.

See the graph on US Daily Deaths here.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 5.8% (red line). This the lowest percent positive since late June.

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

And check out COVID Exit Strategy to see how each state is doing.

by Calculated Risk on 8/10/2020 04:00:00 PM

Note: This is as of August 2nd.   The share of mortgage loans in forbearance decreased, but there was a slight uptick in forbearance requests last week.

From the MBA: Share of Mortgage Loans in Forbearance Decreases for the Eighth Straight Week to 7.44%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 23 basis points from 7.67% of servicers’ portfolio volume in the prior week to 7.44% as of August 2, 2020. According to MBA’s estimate, 3.7 million homeowners are in forbearance plans. ...
“The share of loans in forbearance declined at a more rapid pace last week, with many borrowers who had been making payments while in forbearance deciding to exit. New forbearance requests increased, but are still well below the level of exits,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Some of the decline in the share of Ginnie Mae loans in forbearance was due to additional buyouts of delinquent loans from Ginnie Mae pools, which result in these FHA and VA loans being reported in the portfolio category.”

Added Fratantoni, “The job market data in July came in better than expected. However, the unemployment rate is still quite high, and the elevated level of layoffs and slowing pace of hiring will make it more difficult for borrowers to get back on track – particularly if there is not an extension of relief.”
By stage, 40.87% of total loans in forbearance are in the initial forbearance plan stage, while 58.43% are in a forbearance extension. The remaining 0.70% are forbearance re-entries.
emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.  Most of the increase was in late March and early April, and has been trending down for the last eight weeks.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week from 0.10% to 0.12%"

by Calculated Risk on 8/10/2020 01:29:00 PM

Note, from Fannie: "The decline in single-family REO properties in the first half of 2020 compared with the first half of 2019 was primarily due to the suspension of foreclosures and a reduction in REO acquisitions from serious delinquencies aged greater than 180 days. With instruction from FHFA, we have prohibited our servicers from completing foreclosures on our single-family loans through at least August 31, 2020, except in the case of vacant or abandoned properties. In addition, some states and local governments have enacted additional foreclosure constraints that extend beyond that timeframe."

As a result of COVID-19, Fannie and Freddie kept disposing of REO in Q2, but there were very few acquisitions.

Fannie and Freddie earlier reported results earlier for Q2 2020. Here is some information on Real Estate Owned (REOs).

Freddie Mac reported the number of REO declined to 2,812 at the end of Q2 2020, compared to 5,869 at the end of Q2 2019.

For Freddie, this is down 96% from the 74,897 peak number of REOs in Q3 2010.

Fannie Mae reported the number of REO declined to 12,675 at the end of Q2 2020 compared to 17,913 at the end of Q2 2019.

For Fannie, this is down 92% from the 166,787 peak number of REOs in Q3 2010.

Click on graph for larger image.

Here is a graph of Fannie and Freddie Real Estate Owned (REO).

REO inventory decreased in Q2 2020, and combined inventory is down 35% year-over-year.

This is probably lower than a normal level of REO.

It takes a long time to go from delinquency to foreclosure to REO.  And homeowners who are struggling are probably in forbearance.

So any increase in REOs from COVID-19 won't happen for a long time. Since underwriting has been fairly solid over the last decade, I don't expect a huge increase in COVID-19 related REOs unless the health crisis goes on for an extended period.

by Calculated Risk on 8/10/2020 12:44:00 PM

The Northwest Multiple Listing Service reported Opportunities abound for home buyers and sellers, but brokers say "don't delay"

Brokers added the largest monthly number of new listings during July since May 2019, but pent-up demand from homebuyers meant inventory remained tight, according to Northwest Multiple Listing Service (NWMLS) representatives who commented on the latest housing activity report.
…
MLS member-brokers reported 9,840 closed sales during July, up slightly more than 3% from a year ago and the highest volume since June 2018 when they notched 10,072 completed transactions.
emphasis added

There were 9,840 sales in July 2020, up 3% from 9,540 sales in July 2019.

The press release is for the Northwest. In King County, sales were up 4.3% year-over-year, and active inventory was down 32% year-over-year.

In Seattle, sales were up 10.4% year-over-year, and inventory was down 15.3% year-over-year..  This puts the months-of-supply in Seattle at just 1.5 months.

The closed sales are for contracts mostly signed in May and June, and as expected, there was a rebound in the July report.

by Calculated Risk on 8/10/2020 10:09:00 AM

From the BLS: Job Openings and Labor Turnover Summary

The number of job openings increased to 5.9 million on the last business day of June, the U.S. Bureau of Labor Statistics reported today. Hires decreased to 6.7 million in June, but was still the second highest level in the series history. The largest monthly increase in hires occurred in May 2020. Total separations increased to 4.8 million. Within separations, the quits rate rose to 1.9 percent while the layoffs and discharges rate was unchanged at 1.4 percent. These changes in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it.
emphasis added

The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for June, the most recent employment report was for July.

Click on graph for larger image.


Note that hires (dark blue) and total separations (red and light blue columns stacked) are usually pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

Jobs openings increased in June to 5.889 million from 5.371 million in May.

The number of job openings (yellow) were down 18% year-over-year.

Quits were down 25% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits").

Job openings increased in June, but were still down sharply YoY.

by Calculated Risk on 8/10/2020 09:07:00 AM

From the NMHC: NMHC Rent Payment Tracker Finds 79.3 Percent of Apartment Households Paid Rent as of August 6

The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 79.3 percent of apartment households made a full or partial rent payment by August 6 in its survey of 11.4 million units of professionally managed apartment units across the country.

This is a 1.9-percentage point, or 223,000-household decrease from the share who paid rent through August 6, 2019 and compares to 77.4 percent that had paid by July 6, 2020. These data encompass a wide variety of market-rate rental properties across the United States, which can vary by size, type and average rental price.

“While President Trump announced executive orders relating to rental assistance and continued unemployment benefits, it is unclear when and if those resources will be available to families. NMHC continues to urge the Trump administration and Congressional leaders to restart negotiations and reach a comprehensive agreement on the next COVID relief package. It is critical lawmakers take urgent action to support and protect apartment residents and property owners through an extension of the benefits as well as targeted rental assistance. That support, not a broad-based eviction moratorium, will keep families safely and securely housed as the nation continues to recover from the pandemic.”
emphasis added

CR Note: This is for larger, professionally managed properties.  It appears fewer people are paying their rent this year compared to last year (down 1.9 percentage points from a year ago).   But this hasn't fallen off a cliff - yet - with the expiration of the extra unemployment benefits.