by Calculated Risk on 12/08/2024 08:21:00 AM

From CoreLogic: CoreLogic: US Homeowners See Equity Gains Drop by More Than 5 Percent in Q3

CoreLogic® ... today released the Homeowner Equity Report (HER) for the third quarter of 2024. The report shows that U.S. homeowners with mortgages (which account for roughly 62% of all properties) saw home equity increase by $425 billion since the third quarter of 2023, a gain of 2.5% year over year, bringing the total net homeowner equity to over $17.5 trillion in the third quarter of 2024.

For the first time since the fourth quarter of 2022, the share of negative equity rose in the U.S. on a quarterly basis. Just compared to last quarter, the number of residential properties that fell into negative equity increased by 30,000 homes or 1.8%.
...
“As home prices flattened in the third quarter, home equity gains also slowed, even declined in some regions of the country,” said Dr. Selma Hepp, CoreLogic Chief Economist. “While home equity closely depends on home price changes, equity losses are also tied to natural disaster events since households can lose a lot of their equity following a catastrophe, particularly if not property insured. As a result, following Maui’s 2023 devastating wildfire, Hawaii now tops the list with largest decline in home equity.”

From the report:

In the third quarter of 2024, the total number of mortgaged residential properties with negative equity increased by 3.5% from the second quarter of 2024, to currently about 990,000 homes with negative equity, or 1.8% of all mortgaged properties. On a year-over-year basis, negative equity declined by 3%, or about 30,000 fewer homes in negative equity from the third quarter of 2023.

This map from the report shows the percent of mortgaged homes with negative equity by state.

by Calculated Risk on 12/07/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Inflation Adjusted House Prices 1.4% Below 2022 Peak

• 1st Look at Local Housing Markets in November

• Freddie Mac House Price Index Increased in October; Up 3.7% Year-over-year

• FHFA Announces Baseline Conforming Loan Limit Will Increase to $806,500

• Asking Rents Mostly Unchanged Year-over-year

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

by Calculated Risk on 12/07/2024 08:11:00 AM

The key economic report this week is November CPI.

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

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

----- Wednesday, December 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 November from the BLS. The consensus is for a 0.3% increase in CPI, and a 0.3% increase in core CPI.  The consensus is for CPI to be up 2.7% year-over-year and core CPI to be up 3.3% YoY.

----- Thursday, December 12th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 227 thousand initial claims, up from 224 thousand last week.

8:30 AM: The Producer Price Index for November from the BLS. The consensus is for a 0.3% increase in PPI, and a 0.2% increase in core PPI.

12:00 PM: Q3 Flow of Funds Accounts of the United States from the Federal Reserve.

----- Friday, December 13th -----
No major economic releases scheduled.

by Calculated Risk on 12/06/2024 07:01:00 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	517	570	≤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 continuing to post now that deaths are above the goal again.  

Weekly deaths are now declining and will likely continue to decline based on wastewater sampling but are still above the low of 313 in early June 2024.

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

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

COVID in wastewater is fairly low - only about 20% higher than the lows of last May - suggesting weekly deaths will continue to decline.

by Calculated Risk on 12/06/2024 11:33:00 AM

Today, in the Calculated Risk Real Estate Newsletter: 1st Look at Local Housing Markets in November

A brief excerpt:

NOTE: The tables for active listings, new listings and closed sales all include a comparison to November 2019 for each local market (some 2019 data is not available).

This is the first look at several early reporting local markets in October. I’m tracking over 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.

Closed sales in October were mostly for contracts signed in September and October when 30-year mortgage rates averaged 6.18% and 6.43%, respectively (Freddie Mac PMMS). These were the lowest mortgage rate in 2 years!
...
In November, sales in these markets were up 17.0% YoY. Last month, in October, these same markets were up 15.7% year-over-year Not Seasonally Adjusted (NSA).

Note that most of these early reporting markets have shown stronger year-over-year sales than most other markets (for the last several months).

Important: There was one fewer working day in November 2024 (19) as compared to November 2023 (20). So, the year-over-year change in the headline SA data will better than the NSA data suggests (there are other seasonal factors).

Last month, there was one more working day in October 2024 (22) as in October 2023 (21), so seasonally adjusted sales were not as strong year-over-year as NSA sales.
...
This was just several early reporting markets. Many more local markets to come!

There is much more in the article.

by Calculated Risk on 12/06/2024 10:51:00 AM

From Manheim Consulting today: Wholesale Used-Vehicle Prices Increase in November

Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) were higher in November compared to October. The Manheim Used Vehicle Value Index (MUVVI) rose to 205.4, an increase of 0.2% from a year ago. The seasonal adjustment to the index amplified the change for the month, as non-seasonally adjusted values declined slightly. The non-adjusted price in November decreased by 0.1% compared to October, moving the unadjusted average price down 1.0% year over year.
emphasis added

Click on graph for larger image.

This index from Manheim Consulting is based on all completed sales transactions at Manheim’s U.S. auctions.

The Manheim index suggests used car prices increased in November (seasonally adjusted) and were up 0.2% year-over-year (YoY).

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

The headline jobs number in the November employment report was above expectations, and September payrolls and October payrolls were revised up by 56,000 combined.   The participation rate and the employment population ratio declined, and the unemployment rate increased to 4.2%.

Earlier: November Employment Report: 227 thousand Jobs, 4.2% Unemployment Rate

Seasonal Retail Hiring

Typically, retail companies start hiring for the holiday season in October, and really increase hiring in November. Here is a graph that shows the historical net retail jobs added for October, November and December by year.

This graph really shows the collapse in retail hiring in 2008. Since then, seasonal hiring had increased back close to more normal levels. Note: I expect the long-term trend will be down with more and more internet holiday shopping.

Retailers hired 281 thousand workers Not Seasonally Adjusted (NSA) net in November.  This was slightly lower than last year and suggests slightly less real retail sales this holiday season as last year.

This was seasonally adjusted (SA) to a loss of 28.0 thousand retail jobs in November.

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 was unchanged in November at 83.5% from 83.5% in October.

The 25 to 54 employment population ratio decreased to 80.4% from 80.6% the previous month.

Both are 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 4.0% YoY in November.   

Part Time for Economic Reasons

From the BLS report:

"The number of people employed part time for economic reasons changed little at 4.5 million in November. This measure is up from 4.0 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 decreased in November to 4.46 million from 4.56 million in October.  This is above the pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that was increased to 7.8% from 7.7% 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 1.66 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.61 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 November 2024, the employment report indicated positive job growth for 47 consecutive months, putting the current streak in 3rd 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	113
2	1990	48
3	20241	47
4	2007	46
5	1979	45
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 November employment report was above expectations, and September and October payrolls were revised up by 56,000 combined. The participation rate and the employment population ratio declined, and the unemployment rate increased to 4.2%.

This report was boosted by the end of strikes (especially Boeing) and workers returning following the hurricanes.  It probably makes sense to average the last two months, or about 132 thousand per month - down from the 153 thousand hiring pace over the previous 6 months.

by Calculated Risk on 12/06/2024 08:30:00 AM

From the BLS: Employment Situation

Total nonfarm payroll employment rose by 227,000 in November, and the unemployment rate changed little at 4.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment trended up in health care, leisure and hospitality, government, and social assistance. Retail trade lost jobs.
...
The change in total nonfarm payroll employment for September was revised up by 32,000, from +223,000 to +255,000, and the change for October was revised up by 24,000, from +12,000 to +36,000. With these revisions, employment in September and October combined is 56,000 higher 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 227 thousand in November.  Private payrolls increased by 194 thousand, and public payrolls increased 33 thousand.

Payrolls for September and October were revised up 56 thousand, combined.

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

In November, the year-over-year change was 2.27 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 decreased to 62.5% in November, from 62.6% in October. This is the percentage of the working age population in the labor force.

The Employment-Population ratio decreased to 59.8% from 60.0% in October (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 increased to 4.2% in November from 4.1% in October.

This was above consensus expectations, and September and October payrolls were revised up by 56,000 combined.  

This report was boosted by the end of strikes and workers returning after the hurricanes.

I'll have more later ...

by Calculated Risk on 12/05/2024 07:52:00 PM

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

Friday:
• At 8:30 AM ET, Employment Report for November.   The consensus is for 183,000 jobs added, and for the unemployment rate to be unchanged at 4.1%.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Preliminary for December).

by Calculated Risk on 12/05/2024 02:39:00 PM

On Friday at 8:30 AM ET, the BLS will release the employment report for November. The consensus is for 183,000 jobs added, and for the unemployment rate to be unchanged at 4.1%.

There were 12,000 jobs added in October, and the unemployment rate was at 4.1%.

From Goldman Sachs:

We estimate nonfarm payrolls rose by 235k in November, above consensus of +215k ... the end of strikes and the recent hurricanes that weighed on October job growth will likely boost November job growth. We estimate that the unemployment rate was unchanged at 4.1%, in line with consensus.
emphasis added

• ADP Report: The ADP employment report showed 146,000 private sector jobs were added in November.  This was below consensus forecasts and suggests job gains below consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report (this also doesn't include the boost from the end of Boeing strike and bounce back from the hurricane impact in October).

• ISM Surveys: Note that the ISM indexes are diffusion indexes based on the number of firms hiring (not the number of hires).  The ISM® manufacturing employment index increased to was at 48.1%, up from 44.4%.   This would suggest about 30,000 jobs lost in manufacturing. The ADP report indicated 26,000 manufacturing jobs lost in November.

The ISM® services employment index decreased to 51.5% from 53.0%. This would suggest 115,000 jobs added in the service sector. Combined this suggests 85,000 jobs added, far below consensus expectations.  (Note: The ISM surveys have been way off recently)

• Unemployment Claims: The weekly claims report showed more initial unemployment claims during the reference week at 215,000 in November compared to 242,000 in October.  This suggests fewer layoffs in November compared to October.

• Strikes: The CES strike report shows almost 40,000 employees returned from strikes during the reference period in November. This will boost the headline jobs number.

• Conclusion: Employment was impacted by strikes and hurricanes in October.  There should be a bounce back in November.  In the four months prior to October, employment gains averaged 140 thousand.  Adding close to 40 thousand for the strikes, and maybe 50 thousand workers returning following the hurricane impact in October, would suggest employment gains will be above consensus expectations.