by Calculated Risk on 5/28/2021 01:32:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency decreased to 2.38% in April, from 2.58% in March. The serious delinquency rate is up from 0.70% in April 2020.

These are mortgage loans that are "three monthly payments or more past due or in foreclosure".

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble, and peaked at 3.32% in August 2020 during the pandemic.

Click on graph for larger image

By vintage, for loans made in 2004 or earlier (2% of portfolio), 5.44% are seriously delinquent (down from 5.66% in March). For loans made in 2005 through 2008 (2% of portfolio), 9.33% are seriously delinquent (down from 9.65%), For recent loans, originated in 2009 through 2021 (96% of portfolio), 1.94% are seriously delinquent (down from 2.13%). So Fannie is still working through a few poor performing loans from the bubble years.

Mortgages in forbearance are counted as delinquent in this monthly report, but they will not be reported to the credit bureaus.

This is very different from the increase in delinquencies following the housing bubble.   Lending standards have been fairly solid over the last decade, and most of these homeowners have equity in their homes - and they will be able to restructure their loans once they are employed.

Note: Freddie Mac reported earlier.

by Calculated Risk on 5/28/2021 11:17:00 AM

From Merrill Lynch:

We continue to track 11% qoq saar after robust capex data this week [May 28 estimate]
emphasis added

From Goldman Sachs:

We lowered our Q2 GDP tracking estimate by 0.5pp to +9.5% (qoq ar) to reflect the higher price deflator and the composition of the nominal spending revisions. [May 28 estimate]

From the NY Fed Nowcasting Report

The New York Fed Staff Nowcast stands at 4.3% for 2021:Q2. [May 28 estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2021 is 9.3 percent on May 28, up from 9.1 percent on May 27. [May 28 estimate]

by Calculated Risk on 5/28/2021 09:28:00 AM

Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.

This data is as of May 25th.

From Black Knight: Forbearance Volumes Increase Again, Moderate Opportunity for Additional Improvement in Early June

The country saw another week of forbearance increases this week, with volumes rising by another 16k (+0.73%). This marked the second consecutive week of increases after a sustained downward trend. Despite the raising volume, this is still only the third overall increase over the past 12 weeks. As of May 25, 2.2M (4.1% of) homeowners remain in COVID-19 related forbearance plans, including 2.4% of GSE, 7.3% of FHA/VA and 4.8% of portfolio/PLS loans.

Click on graph for larger image.

After seeing improvement accelerate as early forbearance entrants went through the 12-month review process in March and April, exit activity has since returned to more “normal” levels. Mid- to late-month increases in forbearance plan volumes like we’ve seen in the past two weeks have been very common during the recovery to-date.

Plan starts hit their highest level in nine weeks, primarily driven by elevated levels of restart activity. while new plans starts still remain low, they edged slightly upward, hitting their highest level in nine weeks as well.
...
Nearly 145k plans are still listed with May 2021 expirations, providing a moderate opportunity for additional improvements over the next two weeks and, more acutely, in early June. Another 780k plans are currently slated for review for extension/removal in June, the final quarterly review before early forbearance entrants begin to reach their 18-month plan expirations later this year.

June will mark the 15-month review point for many of the early forbearance entrants, so we will be watching exit velocity closely during that time.
emphasis added

by Calculated Risk on 5/28/2021 08:37:00 AM

The BEA released the Personal Income and Outlays report for April:

Personal income decreased $3.21 trillion (13.1 percent) in April according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) decreased $3.22 trillion (14.6 percent) and personal consumption expenditures (PCE) increased $80.3 billion (0.5 percent).

Real DPI decreased 15.1 percent in April and Real PCE decreased 0.1 percent; goods decreased 1.3 percent and services increased 0.6 percent. The PCE price index increased 0.6 percent. Excluding food and energy, the PCE price index increased 0.7 percent.
emphasis added

The April PCE price index increased 3.6 percent year-over-year and the April PCE price index, excluding food and energy, increased 3.1 percent year-over-year.

The following graph shows real Personal Consumption Expenditures (PCE) through April 2021 (2012 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income was above expectations,  and the increase in PCE was at expectations.

by Calculated Risk on 5/27/2021 09:03:00 PM

Friday:
• At 8:30 AM ET, Personal Income and Outlays, April 2021. The consensus is for a 14.8% decrease in personal income, and for a 0.5% increase in personal spending. And for the Core PCE price index to increase 0.6%.

• At 9:45 AM, Chicago Purchasing Managers Index for May.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Final for May). The consensus is for a reading of 83.0.

by Calculated Risk on 5/27/2021 04:58:00 PM

From the Las Vegas Visitor Authority: April 2021 Las Vegas Visitor Statistics

Visitation continued to ramp up in April as the destination welcomed more than 2.5M visitors, up more than 15% MoM and down roughly ‐27% vs. pre‐COVID levels in Apr 2019.

Hotel occupancy increased to 65.6%, up 10.1 pts MoM, with Weekend occupancy improving to 83.5%, up 5.8 pts MoM and within 13 pts of Apr 2019 levels.

Click on graph for larger image.

The first graph shows visitor traffic for 2019 (blue), 2020 (orange) and 2021 (red).

Visitor traffic was down 27.3% compared to the same month in 2019.

Convention traffic was non-existent again in April, and was down 100% compared to April 2019.

There has been no convention traffic since March 2020.  

I'll add a graph of convention traffic once conventions start to reopen.

Note: A convention is scheduled for early June (HT MS): "Informa Markets, organizers of the World of Concrete, has received approval from the Nevada Department of Business and Industry to move forward with its 2021 in-person edition. The event is scheduled to be held June 8-10, 2021 at the Las Vegas Convention Center."

by Calculated Risk on 5/27/2021 03:38:00 PM

I'm switching to a simple table to track progress.

COVID Metrics (7 day average Cases, Hospitalized, Deaths)
	Current	Yesterday	Goal
Percent over 18, One Dose	62.0%	61.8%	70.0%1,2
Fully Vaccinated (millions)	132.8	131.8	1601
New Cases per Day	21,627	22,139	5,0002
Hospitalized	22,443	22,810	3,0002
Deaths per Day	437	435	502
1 Biden Administration Goals, 2my goals

This data is from the CDC.

by Calculated Risk on 5/27/2021 11:39:00 AM

Note: The year-over-year occupancy comparisons are easy, since occupancy declined sharply at the onset of the pandemic. However, occupancy is still down significantly from normal levels.

The occupancy rate is down 15.1% compared to the same week in 2019.

From CoStar: STR: Weekly US Hotel Occupancy Reaches 60%, a First Since Start of Pandemic

U.S. weekly hotel occupancy reached the 60% mark for the first time since the start of the pandemic, according to STR‘s latest data through May 22.

May 16-22, 2021 (percentage change from comparable week in 2019*):

• Occupancy: 60.3% (-15.1%)
• Average daily rate (ADR): US$115.57 (-13.6%)
• Revenue per available room (RevPAR): US$69.69 (-26.6%)

ADR also reached its highest point of the pandemic but was still US$18 less than the corresponding week in 2019. RevPAR also hit a high point when compared to 2019.
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Click on graph for larger image.

The red line is for 2021, black is 2020, blue is the median, dashed purple is 2019, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020).

Occupancy is now above the horrible 2009 levels.

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

by Calculated Risk on 5/27/2021 10:03:00 AM

From the NAR: Pending Home Sales Drop 4.4% in April

Pending home sales took a step backward in April, according to the National Association of Realtors®. All four U.S. regions recorded year-over-year increases, but only the Midwest witnessed month-over-month gains in terms of pending home sales contract transactions.

The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, fell 4.4% to 106.2 in April. Year-over-year, signings jumped 51.7% as last year's pandemic-related shutdowns slumped sales to an all-time low. An index of 100 is equal to the level of contract activity in 2001.
...
The Northeast PHSI declined 12.9% to 85.3 in April, a 96.5% jump from a year ago. In the Midwest, the index increased 3.5% to 101.1 last month, up 39.4% from April 2020.

Pending home sales transactions in the South fell 6.1% to an index of 128.9 in April, up 45.3% from April 2020. The index in the West decreased 2.6% in April to 92.0, up 57.3% from a year prior.
emphasis added

This was well below expectations of a 1.2% increase for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in May and June.

by Calculated Risk on 5/27/2021 08:40:00 AM

The DOL reported:

In the week ending May 22, the advance figure for seasonally adjusted initial claims was 406,000, a decrease of 38,000 from the previous week's unrevised level of 444,000. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The 4-week moving average was 458,750, a decrease of 46,000 from the previous week's unrevised average of 504,750. This is the lowest level for this average since March 14, 2020 when it was 225,500.
emphasis added

This does not include the 93,546 initial claims for Pandemic Unemployment Assistance (PUA) that was down from 95,142 the previous week.

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 458,750.

The previous week was unrevised.

Regular state continued claims decreased to 3,642,000 (SA) from 3,738,000 (SA) the previous week.

Note: There are an additional 6,515,657 receiving Pandemic Unemployment Assistance (PUA) that decreased from 6,606,198 the previous week (there are questions about these numbers). This is a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance.  And an additional 5,191,642 receiving Pandemic Emergency Unemployment Compensation (PEUC) up from 5,142,370.

Weekly claims were lower than the consensus forecast.