by Calculated Risk on 11/11/2020 11:46:00 AM

From the HAR: Houston Real Estate Soars Again in October

Even with an ever-dwindling supply of housing and a lingering pandemic, consumers bought homes at a frenzied pace in October, keeping the Houston real estate market on the path to a record year. The high end of the market once again registered the greatest sales volume increase, with mid-range homes also attracting heavy activity.

According to the latest Houston Association of Realtors (HAR) Market Update, 9,287 single-family homes sold in October compared to 7,187 a year earlier. That represents a 29.2 percent increase and marks the fifth straight month of positive sales.
...
Sales of all property types totaled 11,232 – up 31.5 percent from October 2019. Total dollar volume for the month rose 46.1 percent to $3.5 billion. The lease market had mixed results in October with a 5.1 percent decline in single-family housing while townhouse/condo leases jumped 11.0 percent.
emphasis added

Inventory declined 25.9% year-over-year from 42,374 in October 2019 to 31,384 in October 2020.

Note that the closed sales in October were for contracts that were mostly signed in August and September.

by Calculated Risk on 11/11/2020 10:01:00 AM

Towards the end of each year I collect some housing forecasts for the following year.  This is just a beginning (I'll gather many more).

The table below shows a few forecasts for 2021:

From Fannie Mae: Housing Forecast: October 2020

From Freddie Mac: Freddie Mac Quarterly Forecast: Housing Market Continues to Rebound as Mortgage Rates Hover at Record Lows

From NAHB: Housing and Interest Rate Forecast, 11/10/2020

From NAR: U.S. Economic Outlook: September 2020

Note: For comparison, new home sales in 2020 will probably be around 820 thousand, and total housing starts around 1.360 million.

Housing Forecasts for 2021
	New Home Sales (000s)	Single Family Starts (000s)	Total Starts (000s)	House Prices1
Fannie Mae	857	1,094	1,433	2.1%2
Freddie Mac				2.6%2
NAHB	843	986	1,321
NAR	950	1,070	1,430	4.1%3
1Case-Shiller unless indicated otherwise 2FHFA Purchase-Only Index 3NAR Median Prices

by Calculated Risk on 11/11/2020 07:00:00 AM

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

Mortgage applications decreased 0.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 6, 2020.

... The Refinance Index increased 1 percent from the previous week and was 67 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 16 percent higher than the same week one year ago.

“Mortgage application activity was mixed last week, despite the 30-year fixed rate decreasing to 2.98 percent – an all-time MBA survey low. The refinance index climbed to its highest level since August, led by a 1.5 percent increase in conventional refinances,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The purchase market continued its recent slump, with the index decreasing for the sixth time in seven weeks to its lowest level since May 2020. Homebuyer demand is still strong overall, and activity was up 16.5 percent from a year ago. However, inadequate housing supply is putting upward pressure on home prices and is impacting affordability – especially for first-time buyers and lower-income buyers. The trend in larger average loan application sizes and growth in loan amounts points to the continued rise in home prices, as well as the strength in the upper end of the market.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to a survey low of 2.98 percent from 3.01 percent, with points decreasing to 0.35 from 0.38 (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 with record low rates, the index remains up significantly from last year.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is up 16% year-over-year unadjusted.

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

by Calculated Risk on 11/10/2020 07:12:00 PM

The end of the pandemic is coming, possibly by Q2 2021! Please be careful, especially over the holidays. Thanksgiving, Christmas and New Years will be tough this year, but keep your guard up - plan now to have safe holidays.

The US is now averaging over 1 million tests per day. Based on the experience of other countries, for adequate test-and-trace (and isolation) to reduce infections, the percent positive needs to be well under 5% (probably close to 1%), 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 1,069,405 test results reported over the last 24 hours.

There were 130,989 positive tests. This is a new record.

Over 9,000 US deaths have been reported so far in November. 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 12.2% (red line is 7 day average).

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.

The second graph shows the 7 day average of positive tests reported and daily hospitalizations.

The dashed line is the previous hospitalization maximum.

Note that there were very few tests available in March and April, and many cases were missed, so the hospitalizations was higher relative to the 7-day average of positive tests in July. 

Now, there are many more tests, and many cases are being detected earlier - so hospitalizations have lagged.   Hospitalizations are now at a new record.

This is a new record 7-day average cases for the USA.

by Calculated Risk on 11/10/2020 12:21:00 PM

From the NMHC: NMHC Rent Payment Tracker Finds 80.4 Percent of Apartment Households Paid Rent as of November 6

The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 80.4 percent of apartment households made a full or partial rent payment by November 6 in its survey of 11.5 million units of professionally managed apartment units across the country.

This is a 1.1 percentage point, or 131,712 household decrease from the share who paid rent through November 6, 2019 and compares to 79.4 percent that had paid by October 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.

“November’s opening rent payment figures show that the additional support apartment residents received over the summer, coupled with generous, innovative approaches put into place by property owners and managers, continue to provide renters with some degree of security against the economic distress facing communities throughout the country,” said Doug Bibby, NMHC President.
emphasis added

Click on graph for larger image.

This graph from the NMHC Rent Payment Tracker shows the percent of household making full or partial rent payments by the 6th of the month.

CR Note: This is mostly for large, professionally managed properties.  There are some timing issues month to month, but rent payments are mostly holding steady - and not falling off a cliff.

by Calculated Risk on 11/10/2020 10:21:00 AM

From the MBA: Mortgage Delinquencies Decrease in the Third Quarter of 2020

The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 7.65 percent of all loans outstanding at the end of the third quarter of 2020, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The delinquency rate was down 57 basis points from the second quarter of 2020 and up 368 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.

“Consistent with the improving labor market and the overall economic rebound, homeowners’ ability to make their mortgage payments improved in the third quarter,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The decrease in the mortgage delinquency rate was driven by a sharp decline in newer 30-day delinquencies and 60-day delinquencies. Particularly encouraging was the 30-day delinquency rate, which reached its lowest level since MBA’s survey began in 1979.”

Added Walsh, “Nonetheless, the 90-day and over delinquency rate continued to grow and reached its highest level since the second quarter of 2010. With forbearance plans still active and foreclosure moratoriums in place until at least the end of the year, many borrowers experiencing longer-term distress will remain in this delinquency category until a loss mitigation resolution is available.”
emphasis added

Click on graph for larger image.

This graph shows the percent of loans delinquent by days past due.  Overall delinquencies decreased in Q3.

The decrease was in the 30 day and 60 and day buckets.  

From the MBA: "Compared to last quarter, the seasonally adjusted mortgage delinquency rate decreased for all loans outstanding. By stage, the 30-day delinquency rate decreased 48 basis points to 1.86 percent, the lowest rate since the survey began in 1979. The 60-day delinquency rate decreased 113 basis points to 1.02 percent, and the 90-day delinquency bucket increased 106 basis points to 4.78 percent, the highest rate since the second quarter of 2010."

This sharp increase in the 90-day bucket 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 1982.

by Calculated Risk on 11/10/2020 10:06:00 AM

From the BLS: Job Openings and Labor Turnover Summary

The number of job openings was little changed at 6.4 million on the last business day of September, the U.S. Bureau of Labor Statistics reported today. Hires and total separations were little changed at 5.9 million and 4.7 million, respectively. Within separations, the quits rate was little changed at 2.1 percent while the layoffs and discharges rate decreased to a series low of 0.9 percent.
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 September, the most recent employment report was for October.

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.

The huge spikes in layoffs and discharges in March and April 2020 are labeled, but off the chart to better show the usual data.

Jobs openings increased in September to 6.436 million from 6.352 million in August.

The number of job openings (yellow) were down 8.7% year-over-year.

Quits were down 12% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits").

Job openings were little changed in September, and are down YoY - and quits are down sharply YoY.

by Calculated Risk on 11/10/2020 08:31:00 AM

Most of this survey is noise, but sometimes there is some information, especially on the labor market.

From the National Federation of Independent Business (NFIB): May 2020 Report

The NFIB Optimism Index remained at 104.0 in October, unchanged from September and a historically high reading.
.
As reported in NFIB’s monthly jobs report, small business owners are looking to hire, reporting a historically high level of job openings in October. Overall, 55% of owners reported hiring or trying to hire in October, down 1 point from September. Thirty-three percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, down 3 points from September’s report.
emphasis added

Click on graph for larger image.

This graph shows the small business optimism index since 1986.

The index was unchanged in October.

by Calculated Risk on 11/09/2020 09:27:00 PM

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

• At 10:00 AM, Job Openings and Labor Turnover Survey for September from the BLS.

by Calculated Risk on 11/09/2020 07:05:00 PM

Great news today on on the likely Pfizer vaccine. This probably means most Americans will be vaccinated by Q2 2021, but we all need to be careful throughout the Winter!

The US is now averaging close to 1 million tests per day. Based on the experience of other countries, for adequate test-and-trace (and isolation) to reduce infections, the percent positive needs to be well under 5% (probably close to 1%), 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 1,304,873 test results reported over the last 24 hours.

There were 118,497 positive tests. This is a Monday reporting record.

Almost 8,000 US deaths have been reported so far in November. 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 9.1% (red line is 7 day average).

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.

The second graph shows the 7 day average of positive tests reported and daily hospitalizations.

The dashed line is the previous hospitalization maximum.

Note that there were very few tests available in March and April, and many cases were missed, so the hospitalizations was higher relative to the 7-day average of positive tests in July. 

Now, there are many more tests, and many cases are being detected earlier - so hospitalizations have lagged. However, it is likely that hospitalizations will be at a new high tomorrow.

This is a new record 7-day average cases for the USA.