by Calculated Risk on 6/24/2021 04:37:00 PM

Freddie Mac reported that the Single-Family serious delinquency rate in May was 2.01%, down from 2.15% in April. Freddie's rate is up year-over-year from 0.81% in May 2020.

Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble, and peaked at 3.17% in August 2020 during the pandemic.

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

Click on graph for larger image

Mortgages in forbearance are being 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 (if) they are employed.

Also - for multifamily - delinquencies were at 0.19%, down from 0.20% in April, and up more than double from 0.09% in May 2020.

by Calculated Risk on 6/24/2021 04:20:00 PM

As part of the new home sales report released yesterday, the Census Bureau reported the number of homes sold by price and the average and median prices.

From the Census Bureau: "The median sales price of new houses sold in May 2021 was $374,400. The average sales price was $430,600."

The following graph shows the median and average new home prices.

Click on graph for larger image.

During the housing bust, the builders had to build smaller and less expensive homes to compete with all the distressed sales.  When housing started to recovery - with limited finished lots in recovering areas - builders moved to higher price points to maximize profits.

Then the average and median house prices mostly moved sideways since 2017 due to home builders offering more lower priced homes.  Prices picked up during the pandemic, and really picked up recently.

The average price in May 2021 was $430,600, up 17% year-over-year.  The median price was $374,400, up 18% year-over-year.  

The second graph shows the percent of new homes sold by price.

Very few new homes sold were under $200K in May 2021 (about 1.4% of all homes).  This is down from 56% in 2002.  In general, the under $200K bracket is going away.   

The $400K and greater than $500K+ brackets increased significantly over the last decade.  A majority of new homes (about 61% in May) in the U.S., are in the $200K to $400K range.

by Calculated Risk on 6/24/2021 03:53:00 PM

This data is from the CDC.

According to the CDC, on Vaccinations.

Total doses administered: 320,687,205, as of a week ago 314,969,386. Average daily doses: 0.82 million.

COVID Metrics
	Today	Yesterday	Week Ago	Goal
Percent over 18, One Dose	65.7%	65.6%	65.0%	≥70.0%1,2
Fully Vaccinated (millions)	151.3	150.8	147.8	≥1601
New Cases per Day3,4	11,342	11,288	11,866	≤5,0002
Hospitalized3	12,329	12,402	13,826	≤3,0002
Deaths per Day3,4	287	285	273	≤502
1 America's Goal by July 4th, 2my goals to stop daily posts, 37 day average for Cases, Hospitalized, and Deaths 4Cases and Deaths updated Mon - Fri

KUDOS to the residents of the 16 states and D.C. that have already achieved the 70% goal: Vermont, Hawaii and Massachusetts are at 80%+, and Connecticut, New Jersey, Maine, Rhode Island, Pennsylvania, New Mexico, California, Maryland, Washington, New Hampshire, New York, Illinois, Virginia and D.C. are all over 70%.

Next up are Minnesota at 69.4%, Delaware at 69.3%, Colorado at 69.1%, Oregon at 68.9%, Wisconsin at 64.9%, Nebraska at 64.7%, and South Dakota at 63.7%.

Click on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

This data is from the CDC.

by Calculated Risk on 6/24/2021 01:06:00 PM

From WardsAuto: Withering Supply Dragging Down U.S. Light-Vehicle Sales Second Straight Month in June (pay content)

Click on graph for larger image.

This graph shows actual sales from the BEA (Blue), and Wards forecast for June (Red).

The Wards forecast of 15.8 million SAAR, would be down 7% from last month, and up 21% from a year ago (sales collapsed at beginning of pandemic).

by Calculated Risk on 6/24/2021 10:59:00 AM

Note: The year-over-year occupancy comparisons are easy, since occupancy declined sharply at the onset of the pandemic.  So STR is comparing to the same week in 2019.

The occupancy rate is down 9.9% compared to the same week in 2019. Leisure (weekend) occupancy has recovered, but weekday (more business) is still down double digits.

From CoStar: STR: US Hotel Occupancy Reaches Highest Level in More Than 19 Weeks

U.S. weekly hotel occupancy hit its highest level in 85 weeks, according to STR‘s latest data through June 19.

June 13-19, 2021 (percentage change from comparable week in 2019*):

• Occupancy: 68.0% (-9.9%)
• Average daily rate (ADR): US$128.90 (-4.4%)
• Revenue per available room (RevPAR): US$87.62 (-13.8%)

In addition to occupancy reaching its highest point since the week ending November 9, 2019, ADR and RevPAR were pandemic-era highs.
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 and weekend occupancy (leisure) has been solid.

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

With solid leisure travel, the next two months should have decent occupancy - but it is uncertain what will happen in the Fall with business travel.

by Calculated Risk on 6/24/2021 08:42:00 AM

The DOL reported:

In the week ending June 19, the advance figure for seasonally adjusted initial claims was 411,000, a decrease of 7,000 from the previous week's revised level. The previous week's level was revised up by 6,000 from 412,000 to 418,000. The 4-week moving average was 397,750, an increase of 1,500 from the previous week's revised average. The previous week's average was revised up by 1,250 from 395,000 to 396,250.
emphasis added

This does not include the 104,682 initial claims for Pandemic Unemployment Assistance (PUA) that was up from 97,762 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 increased to 397,750.

The previous week was revised up.

Regular state continued claims decreased to 3,390,000 (SA) from 3,534,000 (SA) the previous week.

Note: There are an additional 5,950,167 receiving Pandemic Unemployment Assistance (PUA) that decreased from 6,125,524 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 5,273,180 receiving Pandemic Emergency Unemployment Compensation (PEUC) up from 5,165,249.

Weekly claims were higher than the consensus forecast.

by Calculated Risk on 6/24/2021 08:30:00 AM

From the BEA: Gross Domestic Product (Third Estimate), GDP by Industry, and Corporate Profits (Revised), 1st Quarter 2021

Real gross domestic product (GDP) increased at an annual rate of 6.4 percent in the first quarter of 2021, according to the "third" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 4.3 percent.

The “third” estimate of GDP released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was also 6.4 percent. Upward revisions to nonresidential fixed investment, private inventory investment, and exports were offset by an upward revision to imports, which are a subtraction in the calculation of GDP
emphasis added

Here is a Comparison of Third and Second Estimates. PCE growth was revised up slightly to 11.4%. Residential investment was revised up from 12.7% to 13.1%. This was at the consensus forecast.

by Calculated Risk on 6/23/2021 09:00:00 PM

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for a decrease to 390 thousand from 412 thousand last week.

• Also at 8:30 AM, Durable Goods Orders for May from the Census Bureau. The consensus is for a 3.0% increase in durable goods orders.

• Also at 8:30 AM, Gross Domestic Product, 1st quarter 2020 (Third estimate). The consensus is that real GDP increased 6.4% annualized in Q1, unchanged from the second estimate of a 6.4% increase.

• At 11:00 AM, the Kansas City Fed manufacturing survey for June. This is the last of regional manufacturing surveys for June.

• At 4:30 PM, Federal Reserve releases Results from 2021 Bank Stress Tests

by Calculated Risk on 6/23/2021 04:05:00 PM

This data is from the CDC.

According to the CDC, on Vaccinations.

Total doses administered: 319,872,053, as of yesterday 319,223,844. Daily change: 0.65 million.

COVID Metrics
	Today	Yesterday	Week Ago	Goal
Percent over 18, One Dose	65.6%	65.5%	64.7%	≥70.0%1,2
Fully Vaccinated (millions)	150.8	150.4	146.5	≥1601
New Cases per Day3,4	11,282	11,251	12,146	≤5,0002
Hospitalized3	12,402	12,633	14,015	≤3,0002
Deaths per Day3,4	287	293	276	≤502
1 America's Goal by July 4th, 2my goals to stop daily posts, 37 day average for Cases, Hospitalized, and Deaths 4Cases and Deaths updated Mon - Fri

KUDOS to the residents of the 16 states and D.C. that have already achieved the 70% goal: Vermont, Hawaii and Massachusetts are at 80%+, and Connecticut, New Jersey, Maine, Rhode Island, Pennsylvania, New Mexico, California, Maryland, Washington, New Hampshire, New York, Illinois, Virginia and D.C. are all over 70%.

Next up are Minnesota at 69.3%, Delaware at 69.2%, Colorado at 68.9%, Oregon at 68.9%, Wisconsin at 64.8%, Nebraska at 63.8%, and South Dakota at 63.6%.

Click on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

This data is from the CDC.

by Calculated Risk on 6/23/2021 01:53:00 PM

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.

From the AIA: Architecture billings continue historic rebound

Demand for design services from U.S. architecture firms continues to grow at a vigorous pace, according to a new report today from The American Institute of Architects (AIA).

AIA’s Architecture Billings Index (ABI) score for May rose to 58.5 compared to 57.9 in April (any score above 50 indicates an increase in billings). May’s ABI score is one of the highest in the index’s 25-year history. During May, the new design contracts score reached its second consecutive record high with a score of 63.2, while new project inquiries also recorded a near-record high score at 69.2.

“Despite ballooning costs for construction materials and delivery delays, design activity is roaring back as more and more places reopen,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “However, concern over rising inflation and ongoing supply chain disruptions, as well as emerging labor shortages, could dampen the emerging construction recovery.”
...
• Regional averages: Midwest (63.4); South (59.0); West (57.4); Northeast (54.2)

• Sector index breakdown: commercial/industrial (60.6); multi-family residential (59.5); mixed practice (57.9); institutional (57.1)
emphasis added

Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 58.5 in May, up from 57.9 in April. Anything above 50 indicates expansion in demand for architects' services.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

This index had been below 50 for eleven consecutive months, but has been solidly positive for the last foure months.  

The eleven months of decline represented a significant decrease in design services, and suggests a decline in CRE investment through most of 2021 (This usually leads CRE investment by 9 to 12 months), however we might see a pickup in CRE investment towards the end of the 2021 and into 2022.