by Calculated Risk on 12/04/2024 10:00:00 AM

(Posted with permission). The ISM® Services index was at 52.1%, down from 56.0% last month. The employment index decreased to 51.5%, from 53.0%. Note: Above 50 indicates expansion, below 50 in contraction.

From the Institute for Supply Management: Services PMI® at 52.1% November 2024 Services ISM® Report On Business®

conomic activity in the services sector expanded for the fifth consecutive month in November, say the nation's purchasing and supply executives in the latest Services ISM® Report On Business®. The Services PMI® registered 52.1 percent, indicating expansion for the 51st time in 54 months since recovery from the coronavirus pandemic-induced recession began in June 2020.

The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “In November, the Services PMI® registered 52.1 percent, 3.9 percentage points lower than October’s figure of 56 percent. The reading in November marked the ninth time the composite index has been in expansion territory this year. The Business Activity Index registered 53.7 percent in November, 3.5 percentage points lower than the 57.2 percent recorded in October, indicating a fifth month of expansion after a contraction in June. The New Orders Index also recorded a reading of 53.7 percent in November, 3.7 percentage points lower than October’s figure of 57.4 percent. The Employment Index landed in expansion territory for the fourth time in five months; the reading of 51.5 percent is a 1.5-percentage point decrease compared to the 53 percent recorded in October.
emphasis added

The PMI was below expectations.

by Calculated Risk on 12/04/2024 08:15:00 AM

From ADP: ADP National Employment Report: Private Sector Employment Increased by 146,000 Jobs in November; Annual Pay was Up 4.8%

Private sector employment increased by 146,000 jobs in November and annual pay was up 4.8 percent year-over-year, according to the November ADP® National Employment ReportTM produced by ADP Research in collaboration with the Stanford Digital Economy Lab (“Stanford Lab”). ...

“While overall growth for the month was healthy, industry performance was mixed,” said Nela Richardson, chief economist, ADP. “Manufacturing was the weakest we've seen since spring. Financial services and leisure and hospitality were also soft.”
emphasis added

This was below the consensus forecast of 166,000. The BLS report will be released Friday, and the consensus is for 183,000 non-farm payroll jobs added in October.

by Calculated Risk on 12/04/2024 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 2.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 29, 2024. This week’s results include an adjustment for the Thanksgiving holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 30 percent compared with the previous week. The Refinance Index decreased 1 percent from the previous week and was 7 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index decreased 30 percent compared with the previous week and was 21 percent lower than the same week one year ago.

“Mortgage rates fell to their lowest level in over a month last week, with the 30-year fixed rate decreasing to 6.69 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The recent strength in purchase activity continues, supported by lower rates and higher inventory levels, which are giving prospective buyers more options compared to earlier in the year. The purchase index increased for the fourth straight week to its highest level since January 2024. Conventional refinance applications declined despite the lower rates, but FHA and VA refinances rebounded from a week ago.
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.69 percent from 6.86 percent, with points decreasing to 0.67 from 0.70 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is down 21% year-over-year unadjusted (due to timing of Thanksgiving - this was up sharply last week). 

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

Purchase application activity is up about 29% from the lows in late October 2023 and is now above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

With higher mortgage rates, the refinance index increased as mortgage rates declined in September but has decreased as rates moved back up.

by Calculated Risk on 12/03/2024 08:29:00 PM

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

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 November. This report is for private payrolls only (no government).  The consensus is for 166,000 jobs added, down from 233,000 in October.

• At 10:00 AM, the ISM Services Index for November.  The consensus is for 55.5, down from 56.0.

• At 1:45 PM, Discussion, Fed Chair Jerome Powell, Moderated Discussion, At the New York Times DealBook Summit, New York, N.Y.

• At 2:00 PM, the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

by Calculated Risk on 12/03/2024 05:39:00 PM

Wards Auto released their estimate of light vehicle sales for November: U.S. Light-Vehicle Sales Surprise on High Side Again in November (pay site).

Improved affordability, and possibly relief from the end of contentious national elections, appeared to bring more consumers into dealer showrooms in November, leading sales to post their biggest year-over-year increase in 2024.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) and Wards' estimate for November (red).

Sales in November (16.50 million SAAR) were up 2.9% from October, and up 6.7% from November 2023.

Sales in November were well above the consensus forecast.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

by Calculated Risk on 12/03/2024 01:13:00 PM

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

From CoreLogic: CoreLogic: Annual Home Price Growth Stalls in October

• On an annual basis, home prices rose by 3.4% in October and are projected to slow to 2.4% by the same time next year. On a monthly basis, home prices rose just 0.02% from September.

• Chicago beat Miami as the metro with the highest home price gain at 6.4%, compared with Miami’s 6.2%.

• New Jersey outpaced Rhode Island for annual home price growth, recording an 8.1% lift compared with Rhode Island’s 7.5% uptick. Both states reached new highs in October.
...
U.S. home price growth remained almost unchanged in October from the previous month, recording 3.4% year-over year-growth and a 0.02% increase from September. The stagnation highlights the fact that home price growth has remained relatively flat since this summer, only eking out gains in certain pockets of the country.
...
“Similar to much of the housing market activity, home prices continued to mostly move sideways in October,” said CoreLogic Chief Economist Dr. Selma Hepp. “A slight home price bump after a late summer decline reflects the rebound in home buying demand resulting from a short but effective decline in mortgage rates in August. Still, as we continue to bump along during this slower time of the year for the housing market, home prices are not expected to reveal much about what’s ahead for the spring home buying market. In the last few years though, springtime has seen home prices jump higher than before the pandemic despite elevated mortgage rates.”
emphasis added

This was the same YoY increase as reported for September.

This map is from the report.

Nationally, home prices increased by 3.4% year over year in October. The state of Hawaii was the only state to post an annual home price decline. The states with the highest increases year over year were New Jersey (up by 8.1%) and Rhode Island (up by 7.5%).

by Calculated Risk on 12/03/2024 10:00:00 AM

From the BLS: Job Openings and Labor Turnover Summary

the number of job openings was little changed at 7.7 million on the last business day of October, the U.S. Bureau of Labor Statistics reported today. Over the month, hires changed little at 5.3 million. The number of total separations was little changed at 5.3 million. Within separations, quits (3.3 million) increased, but layoffs and discharges (1.6 million) changed little.
emphasis added

The following graph shows job openings (black line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for October; the employment report this Friday will be for November.

Click on graph for larger image.

Note that hires (dark blue) and total separations (red and light blue columns stacked) are usually pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

The spike in layoffs and discharges in March 2020 is labeled, but off the chart to better show the usual data.

Jobs openings increased in October to 7.74 million from 7.37 million in September.

The number of job openings (black) were down 11% year-over-year. 

Quits were down 8% year-over-year. These are voluntary separations. (See light blue columns at bottom of graph for trend for "quits").

by Calculated Risk on 12/03/2024 08:30:00 AM

Today, in the Calculated Risk Real Estate Newsletter: FHFA Announces Baseline Conforming Loan Limit Will Increase to $806,500

A brief excerpt:

After the release of the FHFA house price index for September last week, the FHFA released the conforming loan limits for 2025.

From the FHFA: FHFA Announces Conforming Loan Limit Values for 2025

The Federal Housing Finance Agency (FHFA) today announced the conforming loan limit values (CLLs) for mortgages acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2025. In most of the United States, the 2025 CLL value for one-unit properties will be $806,500, an increase of $39,950 (or 5.2 percent) from 2024 ...

Note that there are different loan limits for various geographical areas. There are also different loan limits depending on the number of units (from 1 to 4 units). For example, next year the CLL is $806,500 for one-unit properties in low-cost areas. The four-unit limit is $1,551,250.

For high-cost areas like Los Angeles County, the CLL is $1,209,750 for one-unit properties (50% higher than the baseline CLL) and the four-unit limit is $2,326,875.

by Calculated Risk on 12/02/2024 06:50:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Little-Changed After Last Week's Improvement

The average lender is still able to offer top tier conventional 30yr fixed rates just under 7% for the 4th straight day. There were no major sources of inspiration today, but that will change as the week progresses. Friday's jobs report is especially significant. The same report has had the biggest impact of any economic report on multiple occasions in the past few months. [30 year fixed 6.91%]
emphasis added

Tuesday:
• At 10:00 AM ET, Job Openings and Labor Turnover Survey for October from the BLS.

by Calculated Risk on 12/02/2024 01:55:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Increased in October; Up 3.7% Year-over-year

A brief excerpt:

Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.45% month-over-month on a seasonally adjusted (SA) basis in October. On a year-over-year basis, the National FMHPI was up 3.7% in October, down from up 3.8% YoY in September.  The YoY increase peaked at 19.0% in July 2021, and for this cycle, bottomed at up 0.9% YoY in May 2023. ...

For cities (Core-based Statistical Areas, CBSA), here are the 35 cities with the largest declines from the peak, seasonally adjusted. Austin continues to be the worst performing city. However, 18 of the 35 cities with the largest declines are in Florida!

And 5 of the 35 cities on the list are in Texas.