by Calculated Risk on 12/16/2020 07:00:00 AM

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

Mortgage applications increased 1.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 11, 2020.

... The Refinance Index increased 1 percent from the previous week and was 105 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 26 percent higher than the same week one year ago.

“U.S. Treasury rates stayed low last week, in part due to uncertainty over the prospects of additional pandemic-related government stimulus, as well as concerns about the continued rise in COVID-19 cases across the country. Mortgage rates as a result fell to another survey low, with the 30-year fixed mortgage rate dropping five basis points to 2.85 percent,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Homeowners once again acted on the decline in rates, with refinance activity rising for the second straight week and up 105 percent from a year ago.”

Added Kan, “The ongoing strength in the housing market has carried into December. Applications to buy a home increased for the fourth time in five weeks, as both conventional and government segments of the market saw gains. Government purchase applications rose for the sixth straight week to the highest level since June – perhaps a sign that more first-time buyers are entering 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 2.85 percent from 2.90 percent, with points decreasing to 0.33 from 0.35 (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 26% year-over-year unadjusted.

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

by Calculated Risk on 12/15/2020 09:32:00 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, Retail sales for November will be released.  The consensus is for a 0.3% decrease in retail sales.

• At 10:00 AM, The December NAHB homebuilder survey. The consensus is for a reading of  88, down from 90. Any number above 50 indicates that more builders view sales conditions as good than poor.

• During the day, The AIA's Architecture Billings Index for November (a leading indicator for commercial real estate).

• At 2:00 PM, FOMC Meeting Announcement. No change to rate policy is expected at this meeting.

• At 2:00 PM, FOMC Forecasts This will include the Federal Open Market Committee (FOMC) participants' projections of the appropriate target federal funds rate along with the quarterly economic projections.

• At 2:30 PM, Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.

by Calculated Risk on 12/15/2020 07:28:00 PM

Note: The week-over-week growth in positive cases has slowed.  Hopefully that continues.

I'm looking forward to not posting this data in a few months. Please stay healthy!

The US is now averaging well 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 under 5% (probably close to 1%), so the US has far too many daily cases - and percent positive - to do effective test-and-trace.

There were 1,480,147 test results reported over the last 24 hours.

There were 189,783 positive tests.

Almost 36,000 US deaths have been reported so far in December. 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 12.8% (red line is 7 day average).  The percent positive is calculated by dividing positive results by the sum of negative and positive results (I don't include pending).

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.

• Record Hospitalizations (Over 112,000)

• Record 7 Day Average Deaths

by Calculated Risk on 12/15/2020 01:29:00 PM

Note: The expansion to the Panama Canal was completed in 2016 (As I noted a few years ago), and some of the traffic that used the ports of Los Angeles and Long Beach is probably going through the canal. This might be impacting TEUs on the West Coast.

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Click on graph for larger image.

On a rolling 12 month basis, inbound traffic was up 2.2% in November compared to the rolling 12 months ending in September.   Outbound traffic was down 0.5% compared to the rolling 12 months ending the previous month.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year.

Imports were up 28% YoY in November, and exports were down 5% YoY.

by Calculated Risk on 12/15/2020 11:37:00 AM

From the DMAR: Monthly Indicators, November 2020

The number of single family homes sold in November increased to 4,647, up 15.2% from 4,033 in November 2019.

Active listings are at 2,965, down 69.2% from 9,626 in November 2019.

Sales to date are up 7.3% compared to 2019.

For condos, 1,753 were sold in November, up 26.0% from 1,391 in November 2019.

Active listings are at 1,927, down 48.4% from 3,737 in November 2019.

Condo sales to date are up 7.1% compared to 2019.

Combined, sales were up 18.1%, and inventory down 63.2%.

by Calculated Risk on 12/15/2020 09:22:00 AM

From the Fed: Industrial Production and Capacity Utilization

Industrial production increased 0.4 percent in November. After having fallen 16.5 percent between February and April, the level of the index has risen to about 5 percent below its pre-pandemic (February) reading. In November, manufacturing output advanced 0.8 percent for its seventh consecutive monthly gain. An increase of 5.3 percent for motor vehicles and parts contributed significantly to the gain in factory production; excluding motor vehicles and parts, manufacturing output moved up 0.4 percent. The output of utilities declined 4.3 percent, as warmer-than-usual temperatures reduced the demand for heating. Mining production increased 2.3 percent after decreasing 0.7 percent in October.

At 104.0 percent of its 2012 average, total industrial production was 5.5 percent lower in November than it was a year earlier. Capacity utilization for the industrial sector increased 0.3 percentage point in November to 73.3 percent, a rate that is 6.5 percentage points below its long-run (1972–2019) average but 9.1 percentage points above its low in April.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April, but still well below the level in February 2020.

Capacity utilization at 73.3% is 6.5% below the average from 1972 to 2017.

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

The second graph shows industrial production since 1967.

Industrial production increased in October to  104.0. This is 4.9% below the February 2020 level.

The change in industrial production was close to  consensus expectations, and industrial production in September and October were revised up slightly.

by Calculated Risk on 12/15/2020 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 December 2020 Empire State Manufacturing Survey. The headline general business conditions index was little changed at 4.9. New orders increased marginally, and shipments were modestly higher. Inventories continued to move lower, and delivery times edged up. Employment posted its strongest gain in months, and the average workweek lengthened somewhat. Input prices increased at the fastest pace in two years, while selling prices increased at about the same pace as last month. Looking ahead, firms remained optimistic that conditions would improve over the next six months.
...
The index for number of employees rose five points to 14.2, its highest level in over a year, pointing to ongoing significant gains in employment. The average workweek index was unchanged at 4.8, signaling a small increase in hours worked.
emphasis added

This was below expectations, and showed activity "edged slightly higher" in December.

by Calculated Risk on 12/14/2020 09:04:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Barely Higher For Some; Lower For Others

What do you get when you add a modest amount of cost to the average mortgage rate from last Friday? Rates that are still effectively right in line with all-time lows. ...  Purchase rates (30yr fixed, conventional, top tier) are in the 2.375-2.625% range while refinance rates are another 0.25% higher for most lenders (some have even bigger gaps between purchase and refi rates).
emphasis added

Tuesday:
• At 8:30 AM ET, The New York Fed Empire State manufacturing survey for December. The consensus is for a reading of 6.8, up from 6.3.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for November. The consensus is for a 0.3% increase in Industrial Production, and for Capacity Utilization to increase to 72.9%.

by Calculated Risk on 12/14/2020 07:32:00 PM

Note: The week-over-week growth in positive cases has slowed.  Hopefully that continues.

I'm looking forward to not posting this data in a few months. Please stay healthy!

The US is now averaging well 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 under 5% (probably close to 1%), so the US has far too many daily cases - and percent positive - to do effective test-and-trace.

There were 1,883,575 test results reported over the last 24 hours.

There were 193,384 positive tests.

Almost 33,000 US deaths have been reported so far in December. 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 10.3% (red line is 7 day average).  The percent positive is calculated by dividing positive results by the sum of negative and positive results (I don't include pending).

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.

• Record Hospitalizations (Over 110,000)

• Record 7 Day Average Cases

• Record 7 Day Average Deaths

by Calculated Risk on 12/14/2020 04:00:00 PM

Note: This is as of December 6th.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 5.48%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased from 5.54% of servicers’ portfolio volume in the prior week to 5.48% as of December 6, 2020. According to MBA’s estimate, 2.7 million homeowners are in forbearance plans.
...
“The share of loans in forbearance decreased in the first week of December. However, more borrowers sought relief, with new forbearance requests reaching their highest level since the week ending August 2, and servicer call volume hitting its highest level since the week ending April 19,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Compared to the last two months, more homeowners exiting forbearance are using a modification – a sign that they have not been able to fully get back on their feet, even if they are working again.”

Added Fratantoni, “The latest economic data is showing a slowdown, particularly an increase in layoffs and long-term unemployment. Coupled with the latest surge in COVID-19 cases, it is not surprising to see more homeowners seeking relief.”
...
By stage, 18.72% of total loans in forbearance are in the initial forbearance plan stage, while 78.72% are in a forbearance extension. The remaining 2.56% 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 few months.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.08% to 0.12%. ... As a percent of servicing portfolio volume (#), calls increased from the previous week from 5.3% to 9.4%."