by Calculated Risk on 9/08/2024 12:15:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Increased Slightly in July; Up 4.4% Year-over-year

A brief excerpt:

Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.05% month-over-month on a seasonally adjusted (SA) basis in June. On a year-over-year basis, the National FMHPI was up 4.4% in July, down from up 5.2% YoY in June.  The YoY increase peaked at 19.1% in July 2021, and for this cycle, bottomed at up 0.9% YoY in May 2023. ...

As of July, 17 states and D.C. were below their previous peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peak were in Idaho (-4.2%), Arizona (-1.9%), Arkansas (-1.8), Florida (-1.6%), Texas (-1.3%), and Colorado (-1.1%).

For cities (Core-based Statistical Areas, CBSA), here are the 30 cities with the largest declines from the peak, seasonally adjusted. Austin continues to be the worst performing city. However, 10 of the 30 worst performing cities are now in Florida!

There is much more in the article.

by Calculated Risk on 9/08/2024 10:52:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Inflation Adjusted House Prices 1.9% Below 2022 Peak

Excerpt:

It has been over 18 years since the bubble peak. In the June Case-Shiller house price index released last week, the seasonally adjusted National Index (SA), was reported as being 73% above the bubble peak in 2006. However, in real terms, the National index (SA) is about 11% above the bubble peak (and historically there has been an upward slope to real house prices).  The composite 20, in real terms, is 2% above the bubble peak.

People usually graph nominal house prices, but it is also important to look at prices in real terms.  As an example, if a house price was $300,000 in January 2010, the price would be $432,000 today adjusted for inflation (44% increase).  That is why the second graph below is important - this shows "real" prices.

The third graph shows the price-to-rent ratio, and the fourth graph is the affordability index. The last graph shows the 5-year real return based on the Case-Shiller National Index.
...
The second graph shows the same two indexes in real terms (adjusted for inflation using CPI).

In real terms (using CPI), the National index is 1.6% below the recent peak, and the Composite 20 index is 2.0% below the recent peak in 2022. Both indexes increased in June in real terms boosted by the slight month-over-month decline in inflation in June.

by Calculated Risk on 9/07/2024 06:50:00 PM

Today, in the Calculated Risk Real Estate Newsletter: House Price Weekend: Case-Shiller: National House Price Index Up 5.4% year-over-year in June

Excerpt:

S&P/Case-Shiller released the monthly Home Price Indices for June ("June" is a 3-month average of April, May and June closing prices). June closing prices include some contracts signed in February, so there is a significant lag to this data. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).

The MoM increase in the seasonally adjusted (SA) Case-Shiller National Index was at 0.16%. This was the seventeenth consecutive MoM increase, but this was the smallest MoM increase in the last 16 months.

On a seasonally adjusted basis, prices increased month-to-month in 15 of the 20 Case-Shiller cities. Seasonally adjusted, San Francisco has fallen 6.8% from the recent peak, Phoenix is down 4.5% from the peak, Seattle down 4.0%, and Portland is down 3.4%.

There is much more in the article.

by Calculated Risk on 9/07/2024 08:11:00 AM

The key economic report this week is the August Consumer Price Index (CPI).

----- Monday, September 9th -----
No major economic releases scheduled.

----- Tuesday, September 10th -----
6:00 AM: NFIB Small Business Optimism Index for August.

8:00 AM: Corelogic House Price index for July

----- Wednesday, September 11th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The Consumer Price Index for August from the BLS. The consensus is for a 0.2% increase in CPI, and a 0.2% increase in core CPI.  The consensus is for CPI to be up 2.6% year-over-year (down from 2.9% in July) and core CPI to be up 3.2% YoY (unchanged from 3.2% in July).

----- Thursday, September 12th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 225 thousand initial claims, down from 227 thousand last week.

8:30 AM: The Producer Price Index for August from the BLS. The consensus is for a 0.2% increase in PPI, and a 0.2% increase in core PPI.

12:00 PM: Q2 Flow of Funds Accounts of the United States from the Federal Reserve.

----- Friday, September 13th -----
10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for September).

by Calculated Risk on 9/06/2024 07:31:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly.

Note: "Effective May 1, 2024, hospitals are no longer required to report COVID-19 hospital admissions, hospital capacity, or hospital occupancy data."  So I'm no longer tracking hospitalizations.

COVID Metrics
	Now	Week Ago	Goal
Deaths per Week🚩	971	891	≤3501
1my goals to stop weekly posts, 🚩 Increasing number weekly for Deaths ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported.

Although weekly deaths met the original goal to stop posting, I'm going to continue to post now that deaths are above the goal again.  

Weekly deaths are triple the low of 302 in early June.

And here is a graph I'm following concerning COVID in wastewater as of September 5th:

This appears to be a leading indicator for COVID hospitalizations and deaths.

COVID in wastewater turned down in most areas recently and this suggests weekly deaths will likely decline in a few weeks (until the winter surge).

by Calculated Risk on 9/06/2024 06:17:00 PM

From BofA:

Since our last weekly publication, the 3Q GDP tracking estimate went down three tenths to 2.3% q/q saar while our 2Q GDP tracking estimate remains unchanged at 3.0% q/q saar since the second official estimate. [Sept 6th estimate]
emphasis added

From Goldman:

The details of the trade balance report were somewhat softer than our previous assumptions while the details of the factory orders report were roughly in line with our expectations. On net, we lowered our Q3 GDP tracking estimate by 0.2pp to +2.5% (quarter-over-quarter annualized) and left our Q3 domestic final sales forecast unchanged at 2.6%. [Sept 4th estimate]

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2024 is 2.1 percent on September 4, up from 2.0 percent on September 3. After this morning’s releases from the US Census Bureau, an increase in the nowcast of third-quarter real gross private domestic investment growth from -0.6 percent to 0.0 percent was slightly offset by a decrease in the nowcast of third-quarter real personal consumption expenditures growth from 3.3 percent to 3.2 percent. [Sept 4th estimate]

by Calculated Risk on 9/06/2024 12:03:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Catching Up: New Home Sales Increased to 739,000 Annual Rate in July

Brief excerpt:

I'm back from Africa! I’ll be catching up on recent data over the next few days, and I’ll post some photos / videos from my trip.
...
Last week the Census Bureau reported New Home Sales in July were at a seasonally adjusted annual rate (SAAR) of 739 thousand. The previous three months were revised up sharply, combined.
...
The next graph shows new home sales for 2023 and 2024 by month (Seasonally Adjusted Annual Rate). Sales in July 2024 were up 21.3% from July 2023.

New home sales, seasonally adjusted, have increased year-over-year in 15 of the last 16 months.

There is much more in the article.

by Calculated Risk on 9/06/2024 09:12:00 AM

The headline jobs number in the August employment report was below expectations, and June and July payrolls were revised down by 82,000 combined.   The participation rate and the employment population ratio were unchanged, and the unemployment rate decreased to 4.2%.

Construction employment increased 34 thousand and is now 665 thousand above the pre-pandemic level. 

Manufacturing employment decreased 24 thousand and is now 147 thousand above the pre-pandemic level.

Earlier: August Employment Report: 142 thousand Jobs, 4.2% Unemployment Rate

Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 years old participation rate decreased in August to 83.9% from 84.0% in July.

The 25 to 54 employment population ratio was unchanged at 80.9% from 80.9% the previous month.

Both are above pre-pandemic levels and near the highest level this millennium.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 3.8% YoY in August.   

Part Time for Economic Reasons

From the BLS report:

"The number of people employed part time for economic reasons was little changed at 4.8 million in August. This measure is up from 4.2 million a year earlier. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons increased in August to 4.83 million from 4.57 million in July.  This is above the pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.9% from 7.8% in the previous month. This is down from the record high in April 2020 of 23.0% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.533 million workers who have been unemployed for more than 26 weeks and still want a job, essentialy unchanged from 1.535 million the previous month.

This is down from post-pandemic high of 4.174 million, and up from the recent low of 1.050 million.

This is above pre-pandemic levels.

Job Streak

Through August 2024, the employment report indicated positive job growth for 44 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939).  It appears this streak will survive the annual benchmark revision (that will revise down job growth).

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2019	100
2	1990	48
3	2007	46
4	1979	45
5	20241	44
6 tie	1943	33
6 tie	1986	33
6 tie	2000	33
9	1967	29
10	1995	25
1Currrent Streak

Summary:

The headline jobs number in the August employment report was below expectations, and June and July payrolls were revised down by 82,000 combined. The participation rate and the employment population ratio were unchanged, and the unemployment rate decreased to 4.2%.

A weaker than expected report, and the three-month average employment growth has slowed to 116 per month.  The unemployment rate is up from a low of 3.4% in early 2023 to 4.2% in August (although down slightly from July).

by Calculated Risk on 9/06/2024 08:30:00 AM

From the BLS: Employment Situation

Total nonfarm payroll employment increased by 142,000 in August, and the unemployment rate changed little at 4.2 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in construction and health care.
...
The change in total nonfarm payroll employment for June was revised down by 61,000, from +179,000 to +118,000, and the change for July was revised down by 25,000, from +114,000 to +89,000. With these revisions, employment in June and July combined is 86,000 lower than previously reported.
emphasis added

Click on graph for larger image.

The first graph shows the jobs added per month since January 2021.

Total payrolls increased by 142 thousand in August.  Private payrolls increased by 118 thousand, and public payrolls increased 24 thousand.

Payrolls for June and July were revised down 86 thousand, combined.

The second graph shows the year-over-year change in total non-farm employment since 1968.

In August, the year-over-year change was 2.36 million jobs.  Employment was up solidly year-over-year (Although the annual benchmark revision will lower the year-over-year change).

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate was unchanged at 62.7% in August, from 62.7% in July. This is the percentage of the working age population in the labor force.

The Employment-Population ratio was unchanged at 60.0% from 60.0% in July (blue line).

I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate.

The unemployment rate decreased to 4.2% in August from 4.3% in July.

This was below consensus expectations, and June and July payrolls were revised down by 82,000 combined.  

I'll have more later ...

by Calculated Risk on 9/05/2024 07:09:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Friday:
• At 8:30 AM ET, Employment Report for August. The consensus is for 164,000 jobs added, and for the unemployment rate to decreased to 4.2%.