by Calculated Risk on 2/25/2025 09:00:00 AM

S&P/Case-Shiller released the monthly Home Price Indices for December ("December" is a 3-month average of October, November and December closing prices).

This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.

From S&P S&P CoreLogic Case-Shiller Index Records 3.9% Annual Gain in December 2024

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 3.9% annual return for December, up from a 3.7% annual gain in the previous month. The 10-City Composite saw an annual increase of 5.1%, up from a 5% annual increase in the previous month. The 20-City Composite posted a year-over-year increase of 4.5%, up from a 4.3% increase in the previous month. New York again reported the highest annual gain among the 20 cities with a 7.2% increase in December, followed by Chicago and Boston with annual increases of 6.6% and 6.3%, respectively. Tampa posted the lowest return, falling 1.1%.
...
The pre-seasonally adjusted U.S. National and 20-City Composite Indices’ upward trends continued to reverse in December, with both posting a -0.1% drop. The 10-City Composite’s monthly return dropped 0.04%.

After seasonal adjustment, the U.S. National, 20-City, and 10-City Composite Indices all posted a month-over-month increase of 0.5%.

“It has been five years since the Covid-19 outbreak took hold of the global economy, sparking unprecedented volatility, massive fiscal and monetary stimulus, and a housing market that responded to national migratory changes in how we work and where we live,” says Brian D. Luke, CFA, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. “National home prices have risen by 8.8% annually since 2020, led by markets in Florida, North Carolina, Southern California, and Arizona. While our National Index continues to trend above inflation, we are a few years removed from peak home price appreciation of 18.9% observed in 2021 and are seeing below-trend growth over the history of the index.

“Home prices stalled during the second half of the year with markets in the West dropping the fastest. San Francisco, the worst performing market since 2020, dropped 4.5% during the last six months of the year, followed by Seattle with a 3.0% decline. San Francisco is now 11.0% lower than its post-pandemic peak reached in May 2022. Previous strongholds like San Diego and Tampa experienced declines of 2.9% and 2.7%, respectively, during the second half of the year. After accounting for seasonal adjustments, our National Index pushed forward to achieve a 19th consecutive all-time high,” Luke continued. “The longest such streak occurred for over 12-years, notching 153 consecutive all-time highs from July 1993 to March 2006.

“The Northeast continues to lead all regions with above-trend growth, led by New York for the eighth consecutive time. Boston reached an all-time high, the only market to do so for the period ended December 2024."
emphasis added

Click on graph for larger image.

The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

The Composite 10 index was up 0.5% in December (SA).  The Composite 20 index was up 0.5% (SA) in December.

The National index was up 0.5% (SA) in December.

The second graph shows the year-over-year change in all three indices.

The Composite 10 NSA was up 5.1% year-over-year.  The Composite 20 NSA was up 4.5% year-over-year.

The National index NSA was up 3.9% year-over-year.

Annual price changes were close to expectations.  I'll have more later.

by Calculated Risk on 2/24/2025 07:06:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Start New Week at 2 Month Lows

Mortgage rates were already in line with the lowest levels since December 18th by last Thursday. They dropped to the best levels since December 12th a day later. end of last week.
...
The bond market (which underlies and dictates interest rate movement) was very calm today after early gains. Investors are waiting to see Friday's PCE inflation data before making any big moves in either direction ... [30 year fixed 6.87%]
emphasis added

Tuesday:
• At 9:00 AM ET, FHFA House Price Index for December 2024. This was originally a GSE only repeat sales, however there is also an expanded index.

• At 9:00 AM, S&P/Case-Shiller House Price Index for December. The consensus is for a 4.5% year-over-year increase in the Comp 20 index for December, up from 4.3% in November.

• At 10:00 AM, Richmond Fed Survey of Manufacturing Activity for February.

by Calculated Risk on 2/24/2025 12:56:00 PM

From WardsAuto: February U.S. Light-Vehicle Sales Maintain Growth; Inventory Resumes Gains (pay content).  Brief excerpt:

Sales are recording solid gains, but production slowdowns capping dealer stock in a growth market – a market that ostensibly still is climbing out of the trough caused by the pandemic and supply-chain issues - suggest the industry overall wants to maintain profit margins but also has a high level of uncertainty about 2025 and does not want to be in a position of having to make sudden, bigger cuts if the market weakens at some point this year.
emphasis added

Click on graph for larger image.

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

On a seasonally adjusted annual rate basis, the Wards forecast of 15.9 million SAAR, would be up 1.9% from last month, and up 1.5% from a year ago.

by Calculated Risk on 2/24/2025 10:51:00 AM

Earlier, in the CalculatedRisk Real Estate Newsletter on January existing home sales, NAR: Existing-Home Sales Decreased to 4.08 million SAAR in January, I mentioned that the median price typically bottoms seasonally in January (contracts signed mostly in November and December) and peaks in June (April and May contracts).

Below is a table of the seasonal changes from January to June (all median prices Not Seasonally Adjusted, NSA).

Note: In 2020, prices increased late into the year and peaked in October, but prices peaked in June for all the other years.

Change in Median House Price from January to June
	2018	2019	2020	2021	2022	2023
January to June	13.7%	14.4%	10.6%	20.8%	16.8%	12.8%

The NAR reported the median price was $396,900 in January 2025, down 7.0% from $426,900 in June 2024.  

We should expect the median price to increase seasonally over the next 5 months, but only slightly in February.

by Calculated Risk on 2/24/2025 08:11:00 AM

Altos reports that active single-family inventory was up 0.3% week-over-week.

Inventory always declines seasonally in the Winter and usually bottoms in January or February. Inventory is now up 2.5% from the bottom six weeks ago in January.

The first graph shows the seasonal pattern for active single-family inventory since 2015.

Click on graph for larger image.

The red line is for 2025.  The black line is for 2019.  

Inventory was up 28.7% compared to the same week in 2024 (last week it was up 29.2%), and down 21.9% compared to the same week in 2019 (last week it was down 22.1%). 

Back in June 2023, inventory was down almost 54% compared to 2019, so the gap to more normal inventory levels has closed significantly!

This second inventory graph is courtesy of Altos Research.

As of Feb 21st, inventory was at 640 thousand (7-day average), compared to 638 thousand the prior week. 

Mike Simonsen discusses this data regularly on Youtube

by Calculated Risk on 2/23/2025 06:17:00 PM

Weekend:
• Schedule for Week of February 23, 2025

• Housing Starts and Recessions

Monday:
• At 8:30 AM ET, Chicago Fed National Activity Index for January. This is a composite index of other data.

• At 10:30 AM, Dallas Fed Survey of Manufacturing Activity for February.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 13 and DOW futures are up 67 (fair value).

Oil prices were down over the last week with WTI futures at $70.40 per barrel and Brent at $74.43 per barrel. A year ago, WTI was at $78, and Brent was at $84 - so WTI oil prices are down about 10% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.11 per gallon. A year ago, prices were at $3.26 per gallon, so gasoline prices are down $0.15 year-over-year.

by Calculated Risk on 2/23/2025 11:04:00 AM

This morning, Carl Quintanilla posted a graph on Bluesky from BESPOKE suggesting the US is heading towards a recession.

Quintanilla quoted BESPOKE:

“On a 12-month average basis, .. Housing Starts have completely rolled over from their peak ..

“.. Recessions have always followed a rollover in Housing Starts, and the only question is timing.”

Housing is the basis of one of my favorite models for business cycle forecasting.  And policy changes will clearly have a negative impact on homebuilders.  Early in February, I expressed my "increasing concern" about the negative economic impact of "executive / fiscal policy errors", however, I concluded that post by noting that I was not currently on recession watch.

Here is an update to a graph that uses new home sales, single family housing starts and residential investment.  (I prefer single family starts to total starts).   The purpose of this graph is to show that these three indicators generally reach peaks and troughs together. Note that Residential Investment is quarterly and single-family starts and new home sales are monthly.

The arrows point to some of the earlier peaks and troughs for these three measures - and the most recent peak.

New home sales peaked in 2020 as pandemic buying soared.  Then new home sales and single-family starts turned down in 2021, but that was partly due to the huge surge in sales during the pandemic.   In 2022, both new home sales and single-family starts turned down in response to higher mortgage rates.   

This decline in residential investment would typically have suggested that a recession was coming, however I looked past the pandemic distortions and correctly predicted no recession!  The low level of existing home inventory led me to predict that new home sales would pick up - and that happened.  We can't be a slave to any model.

This second graph shows the YoY change in New Home Sales from the Census Bureau.  Currently new home sales (based on 3-month average) are down 1% year-over-year!

Usually when the YoY change in New Home Sales falls about 20%, a recession will follow.  An exception for this data series was the mid '60s when the Vietnam buildup kept the economy out of recession.   Another exception was in late 2021 - we saw a significant YoY decline in new home sales related to the pandemic and the surge in new home sales in the second half of 2020.  I ignored that downturn as a pandemic distortion.  Also note that the sharp decline in 2010 was related to the housing tax credit policy in 2009 - and was just a continuation of the housing bust.

The YoY change in new home sales in late 2022 and early 2023 suggested a possible recession.  But as I noted earlier, I was able to look past the pandemic distortion and was able to predict a pickup in new home sales due to the low level of existing home inventory and because homebuilders could offer mortgage incentives that would somewhat offset the sharp increase in mortgage rates.

Another indicator I like to use is heavy truck sales.  This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the January 2025 seasonally adjusted annual sales rate (SAAR). Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Heavy truck sales were at 534 thousand SAAR in January, up from 454 thousand in December, and up 4.6% from 510 thousand SAAR in January 2025.

Usually, heavy truck sales decline sharply prior to a recession, however sales were strong in January.

I share BESPOKE's concern about the potential negative impact of policy on housing starts, but I think it is way too early to start predicting a recession.

by Calculated Risk on 2/22/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• NAR: Existing-Home Sales Decreased to 4.08 million SAAR in January

• Housing Starts Decreased to 1.366 million Annual Rate in January

• The "Neutral" Rate and Implications for 30-year Mortgage Rates

• California Home Sales Down 1.9% YoY in January; 4th Look at Local Housing Markets

• Lawler: Early Read on Existing Home Sales in January

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

by Calculated Risk on 2/22/2025 08:11:00 AM

The key reports this week are January New Home sales, the second estimate of Q4 GDP, Personal Income and Outlays for January, and Case-Shiller house prices.

For manufacturing, the February Dallas, Kansas City, and Richmond Fed manufacturing surveys will be released.

----- Monday, February 24th -----
8:30 AM ET: Chicago Fed National Activity Index for January. This is a composite index of other data.

10:30 AM: Dallas Fed Survey of Manufacturing Activity for February.

----- Tuesday, February 25th -----
9:00 AM: FHFA House Price Index for December 2024. This was originally a GSE only repeat sales, however there is also an expanded index.

9:00 AM: S&P/Case-Shiller House Price Index for December.

This graph shows the year-over-year change for the Case-Shiller National, Composite 10 and Composite 20 indexes, through the most recent report (the Composite 20 was started in January 2000).

The consensus is for a 4.5% year-over-year increase in the Comp 20 index for December, up from 4.3% in November.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for February.

----- Wednesday, February 26th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index.

10:00 AM: New Home Sales for January from the Census Bureau.

This graph shows New Home Sales since 1963.

The dashed line is the sales rate for last month.

The consensus is that new home sales decreased to 678 thousand SAAR, down from 698 thousand in December.

----- Thursday, February 27th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for an increase to 225 thousand from 219 thousand last week.

8:30 AM: Gross Domestic Product, 4th Quarter and Year 2024 (Second Estimate) The consensus is that real GDP increased 2.3% annualized in Q4, unchanged from the advance estimate of 2.3%.

8:30 AM: Durable Goods Orders for January from the Census Bureau. The consensus is for a 1.8% increase in durable goods orders.

10:00 AM: Pending Home Sales Index for January. The consensus is for a 1.2% decrease in the index.

11:00 AM: the Kansas City Fed manufacturing survey for February.

----- Friday, February 28th -----
8:30 AM ET: Personal Income and Outlays for January. The consensus is for a 0.3% increase in personal income, and for a 0.2% increase in personal spending. And for the Core PCE price index to increase 0.2%.  PCE prices are expected to be up 2.5% YoY, and core PCE prices up 2.6% YoY.

9:45 AM: Chicago Purchasing Managers Index for February.

by Calculated Risk on 2/21/2025 07:03:00 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	859	953	≤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 since Jan 2023.

Although weekly deaths met the original goal to stop posting in June 2023 (low of 314 deaths), I'm continuing to post now that deaths are above the goal again - and I'll continue to post until weekly deaths are once again below the goal.

Weekly deaths are now decreasing following the winter pickup.

And here is a graph I'm following concerning COVID in wastewater as of February 20th:

This appears to be a leading indicator for COVID hospitalizations and deaths.  This has moving down recently.

Nationally COVID in wastewater is "Moderate", down from "High" last week, according to the CDC.