by Calculated Risk on 3/27/2025 08:13:00 PM

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

Friday:
• At 8:30 AM ET, Personal Income and Outlays for February. The consensus is for a 0.4% increase in personal income, and for a 0.6% increase in personal spending. And for the Core PCE price index to increase 0.3%.  PCE prices are expected to be up 2.5% YoY, and core PCE prices up 2.7% YoY.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Final for March). The consensus is for a reading of 57.9.

• Also at 10:00 AM, State Employment and Unemployment (Monthly) for February 2025

by Calculated Risk on 3/27/2025 05:50:00 PM

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For February, Realtor.com reported inventory was up 27.5% YoY, but still down 22.9% compared to the 2017 to 2019 same month levels. 

 Now - on a weekly basis - inventory is up 29.2% YoY.

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View—Data for Week Ending March 22, 2025

• Active inventory climbed 29.2% from a year ago

The number of homes actively for sale remains significantly higher than last year, continuing a 72-week streak of annual gains. This year-over-year inventory growth gives buyers more choices and encourages more competitive pricing among sellers. However, the inventory level is still below pre-pandemic norms, and supply constraints in many markets continue to limit buyer flexibility.

• New listings—a measure of sellers putting homes up for sale—increased 8.2%

New listings were up 8.2% compared with this time last year, marking the 11th straight week of annual growth.

• The median list price was unchanged year-over-year

The national median list price was unchanged from a year ago, continuing a 43-week streak where prices have either remained flat or declined compared with the same time last year. Rather than signaling a turnaround, this stability suggests that prices are holding steady as the market adjusts to higher borrowing costs and a growing number of listings.

Here is a graph of the year-over-year change in inventory according to realtor.com. 

Inventory was up year-over-year for the 72nd consecutive week.  

New listings have increased recently but remain below typical pre-pandemic levels.

Median prices are mostly unchanged year-over-year.

by Calculated Risk on 3/27/2025 02:47:00 PM

From STR: U.S. hotel results for week ending 22 March

The U.S. hotel industry reported positive year-over-year comparisons, according to CoStar’s latest data through 22 March. ...

16-22 March 2025 (percentage change from comparable week in 2024):

• Occupancy: 66.0% (+1.0%)
• Average daily rate (ADR): US$165.48 (+1.8%)
• Revenue per available room (RevPAR): US$109.22 (+2.8%)
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 2025, blue is the median, and dashed light blue is for 2024.  Dashed purple is for 2018, the record year for hotel occupancy. 

The 4-week average of the occupancy rate is tracking below last year and is lower than the median rate for the period 2000 through 2024 (Blue).

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

The 4-week average will mostly move sideways until the summer travel season.  We might see a hit to occupancy during the summer months due to less international tourism.

by Calculated Risk on 3/27/2025 11:28:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Inflation Adjusted House Prices 0.8% Below 2022 Peak

Excerpt:

It has been over 18 years since the housing bubble peak. In the January Case-Shiller house price index released this week, the seasonally adjusted National Index (SA), was reported as being 78% above the bubble peak in 2006. However, in real terms, the National index (SA) is about 12% above the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is 3% 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 $440,000 today adjusted for inflation (47% 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 0.8% below the recent peak, and the Composite 20 index is 1.2% below the recent peak in 2022. The real National index and the Composite 20 index increased slightly in real terms in January.

It has now been 32 months since the real peak in house prices. Typically, after a sharp increase in prices, it takes a number of years for real prices to reach new highs (see House Prices: 7 Years in Purgatory)

There is much more in the article!

by Calculated Risk on 3/27/2025 10:00:00 AM

From the NAR: Pending Home Sales Advanced 2.0% in February

Pending home sales improved 2.0% in February according to the National Association of REALTORS®. The Northeast and West experienced month-over-month losses in transactions – with a larger decrease in the West – while the Midwest and South saw gains, which were greatest in the South. Year-over-year, contract signings dropped in all four U.S. regions, with the Midwest undergoing the greatest reduction.

The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – grew 2.0% to 72.0 in February. Year-over-year, pending transactions declined 3.6%. An index of 100 is equal to the level of contract activity in 2001.

"Despite the modest monthly increase, contract signings remain well below normal historical levels," said NAR Chief Economist Lawrence Yun. "A meaningful decline in mortgage rates would help both demand and supply – demand by boosting affordability, and supply by lessening the power of the mortgage rate lock-in effect."
...
The Northeast PHSI fell 0.9% from last month to 62.8, down 2.5% from February 2024. The Midwest index inched up 0.7% to 73.3 in February, down 4.7% from the previous year.

The South PHSI jumped 6.2% to 86.0 in February, down 3.4% from a year ago. The West index contracted by 3.0% from the prior month to 55.9, down 3.5% from February 2024.
emphasis added

Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in March and April.

by Calculated Risk on 3/27/2025 08:44:00 AM

From the BEA: Gross Domestic Product, 4th Quarter and Year 2024 (Third Estimate), GDP by Industry, and Corporate Profits

Real gross domestic product (GDP) increased at an annual rate of 2.4 percent in the fourth quarter of 2024 (October, November, and December), according to the third estimate released by the U.S. Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

The increase in real GDP in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased. ... Real GDP was revised up 0.1 percentage point from the second estimate, primarily reflecting a downward revision to imports.
emphasis added

Here is a Comparison of Third and Second Estimates. PCE growth was revised down to 4.0% from 4.2%. Residential investment was revised up from 5.4% to 5.5%.

by Calculated Risk on 3/27/2025 08:30:00 AM

The DOL reported:

In the week ending March 22, the advance figure for seasonally adjusted initial claims was 224,000, a decrease of 1,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 223,000 to 225,000. The 4-week moving average was 224,000, a decrease of 4,750 from the previous week's revised average. The previous week's average was revised up by 1,750 from 227,000 to 228,750.
emphasis added

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 decreased to 224,000.

The previous week was revised up.

Weekly claims were close to the consensus forecast.

by Calculated Risk on 3/26/2025 07:29:00 PM

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

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 225 initial claims up from 223 thousand last week.

• Also at 8:30 AM, Gross Domestic Product, 4th Quarter and Year 2024 (Third Estimate), GDP by Industry, and Corporate Profits. The consensus is that real GDP increased 2.3% annualized in Q4, unchanged from 2.3% in the second estimate.

• At 10:00 AM, Pending Home Sales Index for February. 

• At 11:00 AM, the Kansas City Fed manufacturing survey for March.

by Calculated Risk on 3/26/2025 02:10:00 PM

This is something to watch again. Here is another monthly update on lumber prices.

SPECIAL NOTE: The CME group discontinued the Random Length Lumber Futures contract on May 16, 2023.  I switched to a physically-delivered Lumber Futures contract that was started in August 2022.  Unfortunately, this impacts long term price comparisons since the new contract was priced about 24% higher than the old random length contract for the period when both contracts were available.

This graph shows CME random length framing futures through August 2022 (blue), and the new physically-delivered Lumber Futures (LBR) contract starting in August 2022 (Red).

On March 26, 2025, LBR was at $678.00 per 1000 board feet, up 15% from a year ago.

Click on graph for larger image.

There is somewhat of a seasonal demand for lumber, and lumber prices frequently peak in the first half of the year.

We didn't see a significant runup in the Spring period of 2023 or 2024 due to the housing slowdown.  

The recent increase might be due to tariffs.  This is the highest price since the pandemic related shortages.

by Calculated Risk on 3/26/2025 10:18:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Final Look at Local Housing Markets in February and a Look Ahead to March Sales

A brief excerpt:

After the National Association of Realtors® (NAR) releases the monthly existing home sales report, I pick up additional local market data that is reported after the NAR. This is the final look at local markets in February.

The big story for February was that existing home sales decreased year-over-year (YoY) following four consecutive months with a year-over-year increase. Sales at 4.26 million on a Seasonally Adjusted Annual Rate (SAAR) basis were above the consensus estimate; however, this was primarily because of the seasonal adjustment for February. Housing economist Tom Lawler’s estimate was very close (as usual).

Sales averaged over 5.5 million SAAR for the month of February in the 2017-2020 period. So, sales were still about 23% below pre-pandemic levels.
...
Here is a look at months-of-supply using NSA sales. Since this is NSA data, it is likely months-of-supply will increase into the Summer.

Months in red will likely see 6+ months of supply this summer and might see price pressures. There is nothing magical about 6 months; some areas see price declines with less inventory, some more.

Note: This month, for months-of-supply, I broke out Miami (Miami-Dade) from the “Miami Area” this also includes Broward County and Palm Beach.
...
More local data coming in April for activity in March!

There is much more in the article.