by Calculated Risk on 12/21/2020 01:12:00 PM

Note: This is a composite index of other data.

From the Chicago Fed: Index Suggests Slower, but Still Slightly Above-Average Growth in November

Led by slower growth in employment- and production-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +0.27 in November from +1.01 in October. Three of the four broad categories of indicators used to construct the index made positive contributions in November, but all four categories decreased from October. The index’s three-month moving average, CFNAI-MA3, decreased to +0.56 in November from +0.85 in October
emphasis added

This graph from the Chicago Fed shows the Chicago Fed National Activity Index by category.

Click on graph for larger image.

According to the Chicago Fed:

The index is a weighted average of 85 indicators of growth in national economic activity drawn from four broad categories of data: 1) production and income; 2) employment, unemployment, and hours; 3) personal consumption and housing; and 4) sales, orders, and inventories.
...
A zero value for the monthly index has been associated with the national economy expanding at its historical trend (average) rate of growth; negative values with below-average growth (in standard deviation units); and positive values with above-average growth.

by Calculated Risk on 12/21/2020 10:40:00 AM

Note: Loans in forbearance are counted as delinquent in this survey, but those loans are not reported as delinquent to the credit bureaus.

From Black Knight: Black Knight: Delinquencies Improved Again in November 2020, But Nearly 2.2 Million Seriously Past-Due Mortgages Remain

• Despite seasonal headwinds, mortgage delinquencies improved for the sixth consecutive month in November 2020, falling to 6.33% from 6.44% in the month prior

• The national delinquency rate is now down 1.5 percentage points from its peak of 7.8% in May but remains a full three percentage points (+93%) above pre-pandemic levels

• While early-stage delinquencies – borrowers one or two payments past due – have fallen back below pre-pandemic levels, seriously past-due (90+ days) mortgages remain 1.8 million above pre-pandemic levels

• Foreclosure activity remains muted as widespread moratoriums remain in place

• November’s 4,400 foreclosure starts and 176,000 loans in active foreclosure are both at their lowest levels on record since Black Knight began reporting the metrics in 2000

• Prepayments fell 11% from October’s 16-year high; however, with interest rates at record lows and refinance incentive at an all-time high, prepay activity is likely to remain elevated in the coming months
emphasis added

According to Black Knight's First Look report, the percent of loans delinquent decreased 1.8% in November compared to October, and increased 79% year-over-year.

The percent of loans in the foreclosure process decreased 1.6% in November and were down 30% over the last year.

Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 6.33% in November, down from 6.44% in October.

The percent of loans in the foreclosure process decreased slightly in November to 0.33%, from 0.33% in October.

The number of delinquent properties, but not in foreclosure, is up 1,513,000 properties year-over-year, and the number of properties in the foreclosure process is down 72,000 properties year-over-year.

Black Knight: Percent Loans Delinquent and in Foreclosure Process
	Nov 2020	Oct 2020	Nov 2019	Nov 2018
Delinquent	6.33%	6.44%	3.53%	3.71%
In Foreclosure	0.33%	0.33%	0.47%	0.52%
Number of properties:
Number of properties that are delinquent, but not in foreclosure:	3,381,000	3,437,000	1,868,000	1,925,000
Number of properties in foreclosure pre-sale inventory:	176,000	178,000	248,000	268,000
Total Properties	3,557,000	3,616,000	2,116,000	2,193,000

by Calculated Risk on 12/21/2020 08:23:00 AM

These indicators are mostly for travel and entertainment.    It will interesting to watch these sectors recover as the vaccine is distributed.   

IMPORTANT: Be safe now - if all goes well, we could all be vaccinated by Q2 2021.

----- Airlines: Transportation Security Administration -----
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).

The dashed line is the percent of last year for the seven day average.

This data is as of December 20th.

The seven day average is down 63.8% from last year (36.2 of last year).  (Dashed line)

There had been a slow increase from the bottom, but is now moving more sideways - with ups and downs due to the holidays.

----- Restaurants: OpenTable -----
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 December 19, 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". Since some restaurants have not reopened, the actual year-over-year decline is worse than shown.

Note that dining is generally lower in the northern states - Illinois, Pennsylvania, and New York - but declining in the southern states. Note that California dining is off sharply with the orders to close.

----- Movie Tickets: Box Office Mojo -----
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 December 17th.

Note that the data is usually noisy week-to-week and depends on when blockbusters are released.

Movie ticket sales have picked up slightly over the last couple of months, but were down last week to $8 million (compared to usually as much as $400 million per week at this time of year).

Some movie theaters have reopened (probably with limited seating).

----- Hotel Occupancy: STR -----
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 since the Great Depression for hotels - prior to 2020).

This data is through December 12th. Hotel occupancy is currently down 37.4% year-over-year.

Notes: Y-axis doesn't start at zero to better show the seasonal change.

Since there is a seasonal pattern to the occupancy rate, we can track the year-over-year change in occupancy to look for any improvement. This table shows the year-over-year change since the week ending Sept 19, 2020:

Week Ending	YoY Change, Occupancy Rate
9/19	-31.9%
9/26	-31.5%
10/3	-29.6%
10/10	-29.2%
10/17	-30.7%
10/24	-31.7%
10/31	-29.0%
11/7	-35.9%
11/14	-32.7%
11/21	-32.6%
11/28	-28.5%
12/5	-37.9%
12/12	-37.4%

This suggests no improvement over the last few months.

----- Gasoline Supplied: Energy Information Administration -----
This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week last year of .

At one point, gasoline supplied was off almost 50% YoY.

As of December 11th, gasoline supplied was off about 15.3% YoY (about 84.7% of last year).

Note: People driving instead of flying might have boosted gasoline consumption over the summer.

----- Transit: Apple Mobility -----
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 December 19th 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 at 45% of the January level. It is at 33% in Chicago, and 52% in Houston - and mostly trending down over the last few months.

----- New York City Subway Usage -----
Here is some interesting data on New York subway usage (HT BR).

This graph is from Todd W Schneider. This is daily data for this year.

This data is through Friday, December 18th.

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".

by Calculated Risk on 12/20/2020 07:24:00 PM

Weekend:
• Schedule for Week of December 20, 2020

• Some thoughts on Housing Inventory

Monday:
• At 8:30 AM ET, Chicago Fed National Activity Index for November. This is a composite index of other data.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 futures are up 8 and DOW futures are up 100 (fair value).

Oil prices were up over the last week with WTI futures at $48.39 per barrel and Brent at $51.57 barrel. A year ago, WTI was at $60, and Brent was at $69 - 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 $2.22 per gallon. A year ago prices were at $2.55 per gallon, so gasoline prices are down $0.33 per gallon year-over-year.

by Calculated Risk on 12/20/2020 07:13:00 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 1,764,566 test results reported over the last 24 hours.

There were 194,988 positive tests.

Almost 50,000 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 11.1% (red line is 7 day average).  The percent positive is calculated by dividing positive results by total tests (including pending).

And check out COVID Act Now to see how each state is doing. (updated link to new site)

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

• Record 7 Day Average Deaths

by Calculated Risk on 12/20/2020 01:10:00 PM

Last week I posted some 2021 housing forecasts. I noted:

There are a wide range of estimates, especially on house prices in 2021, with price forecasts ranging from increases of 2% to 10%. These forecasts use different measures, but that is a very wide spread.

The key in 2021 will be inventory. If inventory stays extremely low, there will be more housing starts and a larger increase in prices. However, if inventory increases significantly, there will be fewer starts and less price appreciation.

So what will happen with inventory in 2021?

Click on graph for larger image.

This graph, based on data from the National Association of Realtors® (NAR), shows nationwide inventory for existing homes.

According to the NAR, inventory was at 1.42 million in October.   This was the lowest level on record for the month of October.  Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

Inventory had steadily decreased following the housing bust, and seemed to mostly level out in 2017 through 2019. Then inventory really declined in 2020.

Prior to 2020, two of the key reasons inventory was low:

1) A large number of single family home and condos were converted to rental units. In 2015, housing economist Tom Lawler estimated there were 17.5 million renter occupied single family homes in the U.S., up from 10.7 million in 2000. Many of these houses were purchased by investors. Most of these rental conversions were at the lower end, and that limited the supply for first time buyers. 

2) Baby boomers are aging in place (people tend to downsize when they are 75 or 80). The leading edge of the boomers are now turning 76 or so, and the boomers selling will probably gradually increase over the next 10 years.

In 2020, inventory really declined due to a combination of potential sellers keeping their properties off the market during a pandemic, and a pickup in buying due to record low mortgage rates, a move away from multi-family rentals and strong second home buying (to escape the high-density cities).

And at the same time, demographics are now favorable for home buying.

NOTE: This graph is updated using the Vintage 2019 estimates. IMPORTANT NOTE: Housing economist Tom Lawler has pointed out some issues with Census estimates, see: Lawler: The Dismal Demographics of 2020

This graph shows the longer term trend for three key age groups: 20 to 29, 25 to 34, and 30 to 39 (the groups overlap).

This graph is from 1990 to 2060 (all data from BLS: current to 2060 is projected).

We can see the surge in the 20 to 29 age group (red).  Once this group exceeded the peak in earlier periods, there was an increase in apartment construction.  This age group peaked in 2018 / 2019 (until the 2030s), and the 25 to 34 age group (orange, dashed) will peak around 2023.  This suggests demand for apartments will soften somewhat.

For buying, the 30 to 39 age group (blue) is important (note: see Demographics and Behavior for some reasons for changing behavior).  The population in this age group is increasing, and will increase significantly over the next decade.

This demographics is now positive for home buying, and this is a key reason I expected the increase in single family housing starts in 2020.

Note: Based on Lawler's work, I expect some downward revisions to the prime population following the 2020 Census (lower immigration, more prime age deaths). But the general story will remain the same.

So what does this mean for inventory in 2021?

First, making the assumption that the pandemic will be mostly over by mid-2021, we can make a few general predictions:

1. Potential sellers will be more willing to list their homes (and allow strangers into their homes).

2. The move away from dense cities will slow and maybe end. What makes cities attractive (jobs, cultural events and other entertainment), hasn't been available during the pandemic. That will change when the pandemic ends, and cities will be attractive again. Of course, the trends toward remote working, online shopping and home entertainment will likely continue, and this will allow some people to live anywhere.

3. Demographics will be favorable for home buying.  The generation moving into the home buying years is much larger than the leading edge of the boomers that will be downsizing - or moving into retirement communities.

4. Mortgage rates are probably close to a bottom now, but it seems unlikely rates will increase quickly with the Fed will be holding down rates for the foreseeable future.

5. Homebuilders will continue to respond to low inventories, and housing starts will likely increase further in 2021.

The bottom line is inventory will probably increase, especially in the 2nd half of 2021 (with the assumption that the pandemic will be mostly over by mid-year).   I'll have more on this when I post my predictions for next year.

by Calculated Risk on 12/19/2020 08:48:00 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 1,725,036 test results reported over the last 24 hours.

There were 201,841 positive tests.

Over 48,000 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 11.7% (red line is 7 day average).  The percent positive is calculated by dividing positive results by total tests (including pending).

And check out COVID Act Now to see how each state is doing. (updated link to new site)

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

• Record 7 Day Average Deaths

by Calculated Risk on 12/19/2020 08:11:00 AM

Happy Holidays and Merry Christmas!

The key economic reports this week are New Home Sales, Existing Home Sales, the 3rd estimate of Q3 GDP, and November Personal income and outlays.

----- Monday, Dec 21st -----
8:30 AM ET: Chicago Fed National Activity Index for November. This is a composite index of other data.

----- Tuesday, Dec 22nd -----
8:30 AM: Gross Domestic Product, 3nd quarter 2020 (Third estimate). The consensus is that real GDP increased 33.1% annualized in Q3, unchanged from the second estimate of GDP.

10:00 AM: Existing Home Sales for November from the National Association of Realtors (NAR). The consensus is for 6.70 million SAAR, down from 6.85 million.

The graph shows existing home sales from 1994 through the report last month.

Housing economist Tom Lawler expects the NAR to report sales of 6.50 million SAAR for November.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for December.

----- Wednesday, Dec 23rd -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 900,000 initial claims, up from 885,000 last week.

8:30 AM: Durable Goods Orders for November. The consensus is for a 0.6% increase in durable goods.

8:30 AM: Personal Income and Outlays for November. The consensus is for a 0.2% decrease in personal income, and for a 0.1% decrease in personal spending. And for the Core PCE price index to increase 0.1%.

10:00 AM: New Home Sales for November from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the sales rate for last month.

The consensus is for 990 thousand SAAR, down from 999 thousand in October.

10:00 AM: University of Michigan's Consumer sentiment index (Final for December). The consensus is for a reading of 81.0.

----- Thursday, Dec 24th -----
The NYSE and the NASDAQ will close early at 1:00 PM ET.

----- Friday, Dec 25th -----
All US markets will be closed in observance of the Christmas Holiday.

by Calculated Risk on 12/18/2020 08:05:00 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 1,039,120 test results reported over the last 24 hours.

There were 228,825 positive tests.

Over 45,000 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 22.0% (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 Act Now to see how each state is doing. (updated link to new site)

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

• Record Hospitalizations (Over 114,000)

• Record 7 Day Average Deaths

by Calculated Risk on 12/18/2020 06:29:00 PM

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 6.50 million in November, down 5.1% from October’s preliminary pace but up 22.2% from last November’s seasonally adjusted pace.

Local realtor reports, as well as reports from national inventory trackers, suggest that the YOY decline in the inventory of existing homes for sale was slightly greater in November than in October, though what that means for the NAR inventory estimate is unclear. As I’ve noted before, the inventory measure in most publicly-released local realtor/MLS reports excludes listings with pending contracts, but that is not the case for many of the reports sent to the NAR (referred to as the “NAR Report!”), Since the middle of last Spring inventory measures excluding pending listings have fallen much more sharply than inventory measures including such listings, and this latter inventory measure understates the decline in the effective inventory of homes for sale over the last several months.

Finally, local realtor/MLS data suggest that the median existing single-family home sales price last month was up by about 15% from last November. While some of the surge in median sales prices may be related to the mix of home sales, there seems little doubt that record low mortgage rates, a drop in the number of existing SF homeowners listing their homes, a sizable pandemic-related in demand toward single-family homes (including a surge in second-home purchases) and away from multifamily rentals (especially in high-density cities), and historically “easy” mortgage lending conditions from the standpoint of allowable debt-to-income ratios have combined to produce a seldom-seen explosion in single-family home prices (especially in a low-inflation environment).

CR Note: The National Association of Realtors (NAR) is scheduled to release November existing home sales on Tuesday, December 22, 2020 at 10:00 AM ET. The consensus is for 6.70 million SAAR.