RSS Feed by Calculated Risk on 8/17/2020 12:43:00 PM
Monday, August 17, 2020
NMHC: Rent Payment Tracker Finds Decline in People Paying Rent in August
From the NMHC: NMHC Rent Payment Tracker Finds 86.9 Percent of Apartment Households Paid Rent as of August 13
The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 86.9 percent of apartment households made a full or partial rent payment by August 13 in its survey of 11.4 million units of professionally managed apartment units across the country.CR Note: This is mostly for large, professionally managed properties. It appears fewer people are paying their rent this year compared to last year (down 2.0 percentage points from a year ago). But this hasn't fallen off a cliff - yet.
This is a 2.0-percentage point, or 222,543 -household decrease from the share who paid rent through August 13, 2019 and compares to 87.6 percent that had paid by July 13, 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.
“At a time when the country is continuing to face a pandemic and suffering from a recession, lawmakers in Congress and the Trump administration must come back to the table and work together on passing comprehensive legislation in the next COVID-19 relief package,” said Doug Bibby, NMHC President.
“While NMHC’s Rent Payment Tracker continues to show that many residents have continued to meet their monthly housing obligations, that is due in large part to the relief enacted under the CARES Act. With that support now having expired more than two weeks ago, households across the country are grappling with even greater financial distress. We strongly urge Congressional leaders and administration officials to extend critical unemployment benefits and create a rental assistance fund so that America’s tens of millions of apartment residents can remain safely and securely housed.”
emphasis added
People were still receiving the extra unemployment benefits for most of July, and were able to make their August rent payment. Without more disaster relief, I expect more people will miss their September rent payment.
MBA: "Mortgage Delinquencies Spike in the Second Quarter of 2020"
by Calculated Risk on 8/17/2020 10:52:00 AM
From the MBA: Mortgage Delinquencies Spike in the Second Quarter of 2020
The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 8.22 percent of all loans outstanding at the end of the second quarter of 2020, according to the Mortgage Bankers Association's (MBA) National Delinquency Survey.
The delinquency rate increased 386 basis points from the first quarter of 2020 and was up 369 basis points from one year ago. For the purposes of the survey, MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage.
"The COVID-19 pandemic's effects on some homeowners' ability to make their mortgage payments could not be more apparent. The nearly 4 percentage point jump in the delinquency rate was the biggest quarterly rise in the history of MBA's survey," said Marina Walsh, MBA's Vice President of Industry Analysis. "The second quarter results also mark the highest overall delinquency rate in nine years, and a survey-high delinquency rate for FHA loans."
Added Walsh, "There was also a movement of loans to later stages of delinquency, with the 60-day delinquency rate reaching a new survey-high, and the 90+-day delinquency rate climbing to its highest level since the third quarter of 2010. On a more positive note, 30-day delinquencies dropped in the second quarter, which is an indication that the flood of new delinquencies may be dissipating."
emphasis added
Click on graph for larger image.This graph shows the percent of loans delinquent by days past due. Delinquencies increased sharply in Q2.
The increase was mostly in the 60 and day buckets. From the MBA: "the 60-day delinquency rate increased 138 basis points to 2.15 percent - the highest rate since the survey began in 1979 - and the 90-day delinquency bucket increased 279 basis points to 3.72 percent - the highest rate since the third quarter of 2010."
This sharp increase was due to loans in forbearance (included as delinquent, but not reported to the credit bureaus).
The percent of loans in the foreclosure process declined further, and was at the lowest level since at least 1985.
Eight High Frequency Indicators for the Economy
by Calculated Risk on 8/17/2020 08:59:00 AM
These indicators are mostly for travel and entertainment - some of the sectors that will recover very slowly.
The TSA is providing daily travel numbers.
Click on graph for larger image.This data shows the seven day average of daily total traveler throughput from the TSA for 2019 (Blue) and 2020 (Red).
This data is as of August 16th.
The seven day average is down 71% from last year. There had been a slow steady increase from the bottom, but air travel is just creeping up over the last several weeks.
The second graph shows the 7 day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities.
Thanks to OpenTable for providing this restaurant data:This data is updated through Aug 15, 2020.
This data is "a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. For year-over-year comparisons by day, we compare to the same day of the week from the same week in the previous year."
Note that this data is for "only the restaurants that have chosen to reopen in a given market".
The 7 day average for New York is still off 70% YoY, and down 47% in Texas.
It appears dining is increasing again, probably mostly outdoor dining.
This data shows domestic box office for each week (red) and the maximum and minimum for the previous four years. Data is from BoxOfficeMojo through August 13th.Note that the data is usually noisy week-to-week and depends on when blockbusters are released.
Movie ticket sales have picked up a slightly from the bottom, but are still under $1 million per week (compared to usually around $300 million per week), and ticket sales have essentially been at zero for twenty one weeks.
Most movie theaters are closed all across the country, and will probably reopen slowly (probably with limited seating at first).
This graph shows the seasonal pattern for the hotel occupancy rate using the four week average. 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).
This data is through August 8th.
COVID-19 crushed hotel occupancy, however the occupancy rate has increased in 16 of the last 17 weeks, and is currently down 33% year-over-year.
Notes: Y-axis doesn't start at zero to better show the seasonal change.
Usually hotel occupancy starts to pick up seasonally in early June and decline towards the end of summer. So some of the recent pickup might be seasonal (summer travel). Note that summer occupancy usually peaks at the end of July or in early August.
This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline consumption compared to the same week last year of .At one point, gasoline consumption was off almost 50% YoY.
As of August 7th, gasoline consumption was only off about 11% YoY (about 89% of normal).
Note: I know several people that have driven to vacation spots - or to visit family - and they usually would have flown. So this might be boosting gasoline consumption over the summer.
This graph is from Apple mobility. From Apple: "This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities." This is just a general guide - people that regularly commute probably don't ask for directions.
There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index. However the index is set "relative to its weekday-specific average over January–February", and is not seasonally adjusted, so we can't tell if an increase in mobility is due to recovery or just the normal increase in the Spring and Summer.
This data is through August 15th for the United States and several selected cities.The graph is the running 7 day average to remove the impact of weekends.
IMPORTANT: All data is relative to January 13, 2020. This data is NOT Seasonally Adjusted. People walk and drive more when the weather is nice, so I'm just using the transit data.
According to the Apple data directions requests, public transit in the 7 day average for the US is still only about 55% of the January level. It is at 50% in New York, and 56% in Houston.
Here is some interesting data on New York subway usage (HT BR).
This graph is from Todd W Schneider.Note: The MTA didn't release data for last week yet. This data is through Friday, August 7th.
Schneider has graphs for each borough, and links to all the data sources.
He notes: "Data updates weekly from the MTA’s public turnstile data, usually on Saturday mornings"
NY Fed: Manufacturing "Business activity edged slightly higher in New York State" in August
by Calculated Risk on 8/17/2020 08:33:00 AM
From the NY Fed: Empire State Manufacturing Survey
Business activity edged slightly higher in New York State, according to firms responding to the August 2020 Empire State Manufacturing Survey. The headline general business conditions index fell fourteen points to 3.7, signaling a slower pace of growth than in July. New orders were little changed, and shipments increased modestly. Unfilled orders were down, and inventories declined. Employment inched higher, while the average workweek declined.This was well below expectations, and showed activity increased slightly in August.
...
The index for number of employees edged up to 2.4, indicating that employment levels inched slightly higher. The average workweek index fell four points to -6.8, pointing to a decline in hours worked.
emphasis added
NAHB: Builder Confidence Increased to 78 in August, Ties Record High
by Calculated Risk on 8/17/2020 08:26:00 AM
Update: The headline number was released early. This update includes the press release.
The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 78, up from 72 in July. Any number above 50 indicates that more builders view sales conditions as good than poor.
From the NAHB: Builder Confidence Matches All-Time High on Record Traffic
In a sign that housing continues to lead the economy forward, builder confidence in the market for newly-built single-family homes increased six points to 78 in August, according to the latest NAHB/Wells Fargo Housing Market Index (HMI) released today. The HMI now stands at its highest reading in the 35-year history of the series, matching the record that was set in December 1998.
“The demand for new single-family homes continues to be strong, as low interest rates and a focus on the importance of housing has stoked buyer traffic to all-time highs as measured on the HMI,” said NAHB Chairman Chuck Fowke. “However, the V-shaped recovery for housing has produced a staggering increase for lumber prices, which have more than doubled since mid-April. Such cost increases could dampen momentum in the housing market this fall, despite historically low interest rates.”
“Housing has clearly been a bright spot during the pandemic and the sharp rebound in builder confidence over the summer has led NAHB to upgrade its forecast for single-family starts, which are now projected to show only a slight decline for 2020,” said NAHB Chief Economist Robert Dietz. “Single-family construction is benefiting from low interest rates and a noticeable suburban shift in housing demand to suburbs, exurbs and rural markets as renters and buyers seek out more affordable, lower density markets.”
...
All the HMI indices posted gains in August. The HMI index gauging current sales conditions rose six points to 84, the component measuring sales expectations in the next six months increased three points to 78 and the measure charting traffic of prospective buyers posted an eight-point gain to reach its highest level ever at 65.
Looking at the three-month moving averages for regional HMI scores, the Northeast jumped 20 points to 65, the Midwest increased 13 points to 63, the South rose 12 points to 71 and the West increased 15 points to 78.
Click on graph for larger image.This graph show the NAHB index since Jan 1985.
This was above the consensus forecast.
Housing and homebuilding have been one of the best performing sectors during the pandemic.
Sunday, August 16, 2020
Monday: Empire State Mfg, Homebuilder Survey
by Calculated Risk on 8/16/2020 07:09:00 PM
Weekend:
• Schedule for Week of August 16, 2020
Monday:
• At 8:30 AM ET, The New York Fed Empire State manufacturing survey for August. The consensus is for a reading of 15.0, down from 17.2.
• At 10:00 AM, The August NAHB homebuilder survey. The consensus is for a reading of 73, up from 72. Any number above 50 indicates that more builders view sales conditions as good than poor.
• At 12:00 PM, MBA Q2 National Delinquency Survey (expected)
From CNBC: Pre-Market Data and Bloomberg futures S&P 500 and DOW futures are down slightly (fair value).
Oil prices were up over the last week with WTI futures at $42.30 per barrel and Brent at $45.05 barrel. A year ago, WTI was at $54, and Brent was at $59 - so WTI oil prices are down about 20% year-over-year.
Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.16 per gallon. A year ago prices were at $2.60 per gallon, so gasoline prices are down $0.44 per gallon year-over-year.
August 16 COVID-19 Test Results
by Calculated Risk on 8/16/2020 05:47:00 PM
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 777,569 test results reported over the last 24 hours.
There were 43,008 positive tests.
There have been 16,567 COVID deaths reported in the first 16 days of August. 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 5.5% (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.
Earlier Fed Survey: Banks reported Tighter Standards, Weaker Demand for Loans except Residential Real Estate
by Calculated Risk on 8/16/2020 03:14:00 PM
This was released in early August, and is worth a note.
From the Federal Reserve: The July 2020 Senior Loan Officer Opinion Survey on Bank Lending Practices
Regarding loans to businesses, respondents to the July survey indicated that, on balance, they tightened their standards and terms on commercial and industrial (C&I) loans to firms of all sizes. Banks reported weaker demand for C&I loans from firms of all sizes. Meanwhile, banks tightened standards and reported weaker demand across all three major commercial real estate (CRE) loan categories—construction and land development loans, nonfarm nonresidential loans, and multifamily loans—over the second quarter of 2020.
For loans to households, banks tightened standards across all categories of residential real estate (RRE) loans and across all three consumer loan categories—credit card loans, auto loans, and other consumer loans—over the second quarter of 2020 on net. Banks reported stronger demand for all categories of RRE loans and weaker demand for all categories of consumer loans.
Banks also responded to a set of special questions inquiring about the current level of lending standards relative to the midpoint of the range over which banks’ standards have varied since 2005. Banks, on balance, reported that their lending standards across all loan categories are currently at the tighter end of the range of standards between 2005 and the present.
emphasis added
Click on graph for larger image.This graph on Commercial Real Estate lending is from the Senior Loan Officer Survey Charts.
This shows that banks have tightened standards, and that there is weak demand for CRE loans.
Saturday, August 15, 2020
August 15 COVID-19 Test Results
by Calculated Risk on 8/15/2020 05:45:00 PM
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 739,521 test results reported over the last 24 hours.
There were 56,499 positive tests.
There have been 15,948 COVID deaths reported in the first 15 days of August. 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 7.6% (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.
Schedule for Week of August 16, 2020
by Calculated Risk on 8/15/2020 08:11:00 AM
The key reports this week are July Housing Starts and Existing Home Sales.
The BLS will release the preliminary employment benchmark revision.
8:30 AM: The New York Fed Empire State manufacturing survey for August. The consensus is for a reading of 15.0, down from 17.2.
10:00 AM: The August NAHB homebuilder survey. The consensus is for a reading of 73, up from 72. Any number above 50 indicates that more builders view sales conditions as good than poor.
12:00 PM: MBA Q2 National Delinquency Survey (expected)
8:30 AM ET: Housing Starts for July. This graph shows single and total housing starts since 1968.
The consensus is for 1.237 million SAAR, up from 1.186 million SAAR in June.
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
10:00 AM: the Bureau of Labor Statistics (BLS) will release the preliminary estimate of the upcoming annual benchmark revision.
10:00 AM: Advance Services Report, Second Quarter 2020
During the day: The AIA's Architecture Billings Index for July (a leading indicator for commercial real estate).
2:00 PM: FOMC Minutes, Meeting of July 28-29, 2020
8:30 AM: The initial weekly unemployment claims report will be released. The early consensus is for a 900 thousand initial claims, down from 963 thousand the previous week.
8:30 AM: the Philly Fed manufacturing survey for August. The consensus is for a reading of 20.5, down from 24.1.
10:00 AM: Existing Home Sales for July from the National Association of Realtors (NAR). The consensus is for 5.39 million SAAR, up from 4.72 million last month.The graph shows existing home sales from 1994 through the report last month.
10:00 AM: State Employment and Unemployment (Monthly) for July 2019
