by Calculated Risk on 1/06/2021 09:31:00 AM

This report is for closed sales in December; sales are counted at the close of escrow, so the contracts for these homes were mostly signed in October and November.

The Las Vegas Realtors reported Southern Nevada home prices end the year in record territory; LVR housing statistics for December 2020

LVR reported a total of 4,097 existing local homes, condos and townhomes were sold during December. Compared to the same time last year, December sales were up 26.7% for homes and up 30.9% for condos and townhomes.

According to LVR, the total number of existing local homes, condos, townhomes and other residential properties sold in Southern Nevada during 2020 was 41,617. That’s up from 41,269 total sales in 2019. By comparison, LVR reported 42,876 total sales in 2018 and 45,388 in 2017.

“I think we surprised a lot of people with how the local housing market not only held up, but set records, during an otherwise rough year for our community and our local economy,” said 2021 LVR President Aldo Martinez. “I don’t see much changing in the early part of 2021. Demand for housing remains high. Our housing supply and mortgage interest rates are still very low. As long as these trends continue, it’s a good bet that local home prices will keep rising.”

By the end of December, LVR reported 3,240 single-family homes listed for sale without any sort of offer. That’s down 41.5% from one year ago. For condos and townhomes, the 1,153 properties listed without offers in December represent a 25.9% drop from one year ago.
…
Despite the coronavirus crisis and economic downturn, the number of so-called distressed sales remains near historically low levels. LVR reported that short sales and foreclosures combined accounted for just 0.9% of all existing local property sales in December. That compares to 1.8% of all sales one year ago, 2.9% two years ago and 3.6% three years ago.
emphasis added

1) Overall sales were up 27.4% year-over-year to 4,097 in December 2020 from 3,214 in December 2019.

2) Active inventory (single-family and condos) is down from a year ago, from a total of 7,093 in 2019 to 4,393 in December 2020. Note: Total inventory was down 38.1% year-over-year.   And months of inventory is low.

3) Low level of distressed sales.

by Calculated Risk on 1/06/2021 08:20:00 AM

From ADP:

Private sector employment decreased by 123,000 jobs from November to December according to the December ADP National Employment Report®. ... The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

“As the impact of the pandemic on the labor market intensifies, December posted the first decline since April 2020,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “The job losses were primarilly concentrated in retail and leisure and hospitality.”
emphasis added

The BLS report will be released Friday, and the consensus is for 100 thousand non-farm payroll jobs added in December. Of course the ADP report has not been very useful in predicting the BLS report.

by Calculated Risk on 1/06/2021 07:00:00 AM

From the MBA: Mortgage Applications Decreased Over a Two-Week Period in Latest MBA Weekly Survey

Mortgage applications decreased 4.2 percent from two weeks earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 1, 2021. The results include adjustments to account for the holidays.

... The holiday adjusted Refinance Index decreased 6 percent from two weeks ago. The unadjusted Refinance Index was 34 percent lower than two weeks ago and was 100 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 0.8 percent from two weeks ago. The unadjusted Purchase Index decreased 30 percent compared with two weeks earlier and was 3 percent higher than the same week one year ago.

“Mortgage rates started 2021 close to record lows, most notably with the 30-year fixed rate at 2.86 percent, and the 15-year fixed rate at a survey low of 2.40 percent. The record-low rates for fixed-rate mortgages is good news for borrowers looking to refinance or buy a home, as around 98 percent of all applications are for fixed-rate loans,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Despite these low rates, overall application activity fell sharply during the holiday period – which is typical every year. Refinance applications were 6 percent lower than two weeks ago, and purchase activity less than 1 percent from its pre-holiday level.”

Added Kan, “The steady demand for home buying throughout most of 2020 should continue in 2021. MBA’s is forecasting for purchase originations to rise to $1.59 trillion this year – an all-time high.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 2.86 percent from 2.90 percent, with points increasing to 0.35 from 0.31 (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 3% year-over-year unadjusted.

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

by Calculated Risk on 1/05/2021 09:15:00 PM

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

• At 8:15 AM, The ADP Employment Report for December. This report is for private payrolls only (no government). The report showed 307,000 jobs added in November.

by Calculated Risk on 1/05/2021 06:54:00 PM

Note: It will take a week or so for the data to adjust for lack of reporting during the holidays. The week-over-week growth in positive cases slowed prior to the holidays.  Hopefully that continues after the holidays.

I'm looking forward to not posting this data in a few months.

The US is now averaging close to 2 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 1,620,506 test results reported over the last 24 hours.

There were 214,378 positive tests.

Over 11,000 US deaths have been reported so far in January. 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 13.2% (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 Hospitalizations

• Record 7-Day Cases

by Calculated Risk on 1/05/2021 04:22:00 PM

Note: This is as of December 27th.

From the MBA: Share of Mortgage Loans in Forbearance Remains Flat at 5.53%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance remained unchanged relative to the prior week at 5.53% as of December 27, 2020. According to MBA’s estimate, 2.7 million homeowners are in forbearance plans.
...
The share of loans in forbearance remained relatively unchanged in the final two weeks of 2020, maintaining the trend of hovering around 5.5 percent for the last two months. However, the share for Ginnie Mae loans continues to inch up and is now at its highest level since the week of November 1st,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Forbearance requests and exits both slowed markedly, and servicer call volume dropped sharply over the holidays.”

Fratantoni continued, “While the increasing number of COVID-19 cases continues to slow economic activity, the passed stimulus legislation should provide financial support for many households as the vaccine rollout commences.”
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 generally been trending down.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week from 0.10% to 0.06%, the lowest level since the week ending March 15."

by Calculated Risk on 1/05/2021 12:28:00 PM

One of the key questions for 2021 is: Will inventory increase as the pandemic subsides, or will inventory decrease further in 2021?

Yesterday I posted an inventory graph courtesy of Altos Research.

Click on graph for larger image in graph gallery.

Here is a graph comparing weekly inventory from Zillow Research with monthly inventory from the NAR.

Housing inventory is at record lows, and inventory is something I will be watching closely this year.

by Calculated Risk on 1/05/2021 10:29:00 AM

The ISM manufacturing index indicated expansion in December. The PMI was at 60.7% in December, up from 57.5% in November. The employment index was at 51.5%, up from 48.4% last month, and the new orders index was at 67.9%, up from 65.1%.

From ISM: Manufacturing PMI® at 60.7%; December 2020 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector grew in December, with the overall economy notching an eighth consecutive month of growth, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:

"The December Manufacturing PMI® registered 60.7 percent, up 3.2 percentage points from the November reading of 57.5 percent. This figure indicates expansion in the overall economy for the eighth month in a row after contracting in March, April, and May, which ended a period of 131 consecutive months of growth. The New Orders Index registered 67.9 percent, up 2.8 percentage points from the November reading of 65.1 percent. The Production Index registered 64.8 percent, an increase of 4 percentage points compared to the November reading of 60.8 percent. The Backlog of Orders Index registered 59.1 percent, 2.2 percentage points higher compared to the November reading of 56.9 percent. The Employment Index returned to expansion territory at 51.5 percent, 3.1 percentage points higher from the November reading of 48.4 percent. The Supplier Deliveries Index registered 67.6 percent, up 5.9 percentage points from the November figure of 61.7 percent. The Inventories Index registered 51.6 percent, 0.4 percentage point higher than the November reading of 51.2 percent. The Prices Index registered 77.6 percent, up 12.2 percentage points compared to the November reading of 65.4 percent. The New Export Orders Index registered 57.5 percent, a decrease of 0.3 percentage point compared to the November reading of 57.8 percent. The Imports Index registered 54.6 percent, a 0.5-percentage point decrease from the November reading of 55.1 percent."
emphasis added

This was above expectations.

This suggests manufacturing expanded at a faster pace in December than in November.

by Calculated Risk on 1/05/2021 08:23:00 AM

Notes: This CoreLogic House Price Index report is for November. The recent Case-Shiller index release was for October. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).

From CoreLogic: Quickening the Pace Despite Economic Rough Patches: Annual U.S. Home Price Appreciation Jumped to 8.2% in November, CoreLogic Reports

CoreLogic® ... today released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for November 2020. Nationally, home prices increased 8.2% in November 2020, compared with November 2019, marking the largest annual appreciation since March 2014. On a month-over-month basis, home prices increased by 1.1% compared to October 2020.
...
While the pandemic left many in positions of financial insecurity, those who maintained employment and income stability are also incentivized to buy given the record-low mortgage rates available; this is increasing buyer demand while for-sale inventory is in short supply. The continued rise in home prices increases down payment requirements and exacerbates the housing market’s affordability issues, leaving lower-income families in rentals and priced-out of the home-purchase market. Slowing buyer demand, coupled with more supply in the coming year, is reflected in the CoreLogic HPI Forecast, which shows annual home price growth slowing from 7.5% during the first quarter of 2021 to 2.5% by November 2021. However, possible stimulus actions could help spur home buyer demand among low- and middle-income families and support stronger home price growth.

“The housing market performed remarkably well in 2020 despite the volatile economic state,” said Frank Martell, president and CEO of CoreLogic. “While we can expect to see lingering effects of COVID-19 resurgences and subsequent shutdowns in the early months of 2021, vaccine distributions and stimulus actions should revitalize economic activity and keep home purchase demand and home price growth strong.”
“The demographic tailwind has arrived as Generation X and millennials drive housing demand,” said Dr. Frank Nothaft, chief economist at CoreLogic. “Lower-priced home values increased about one and a half times faster than higher-priced home values in November, as first-time buyers tend to seek out homes within the lower price ranges.”
emphasis added

by Calculated Risk on 1/04/2021 09:21:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Off To Slow Start, Which is Great

Mortgage rates are off to a slow start in the new year, and that's a good thing. An absence of movement means the average lender continues offering rates that are at or near record lows. For top tier, conventional 30yr fixed loans, that's around 2.75% for refinances and 2.5% for purchases.
emphasis added

Tuesday:
• At 8:00 AM ET, Corelogic House Price index for November.

• At 10:00 AM, ISM Manufacturing Index for December. The consensus is for the ISM to be at 56.5, down from 57.5 in November.