by Calculated Risk on 4/23/2025 10:35:00 AM

Today, in the Calculated Risk Real Estate Newsletter: New Home Sales Increase to 724,000 Annual Rate in March

Brief excerpt:

The Census Bureau reported New Home Sales in March were at a seasonally adjusted annual rate (SAAR) of 724 thousand. The previous three months were revised down, combined.
...
The next graph shows new home sales for 2024 and 2025 by month (Seasonally Adjusted Annual Rate). Sales in March 2025 were up 6.0% from March 2024.

New home sales, seasonally adjusted, have increased year-over-year in 21 of the last 24 months. This is essentially the opposite of what happened with existing home sales that had been down year-over-year every month for 3+ years (existing home sales have been up year-over-year for the last 4 or the last 5 months).

There is much more in the article.

by Calculated Risk on 4/23/2025 10:00:00 AM

The Census Bureau reports New Home Sales in March were at a seasonally adjusted annual rate (SAAR) of 724 thousand.

The previous three months were revised down, combined.

Sales of new single-family houses in March 2025 were at a seasonally-adjusted annual rate of 724,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.4 percent above the February 2025 rate of 674,000, and is 6.0 percent above the March 2024 rate of 683,000.
emphasis added

Click on graph for larger image.

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

New home sales were above pre-pandemic levels.

The second graph shows New Home Months of Supply.

The months of supply decreased in March to 8.3 months from 8.9 months in February.

The all-time record high was 12.2 months of supply in January 2009. The all-time record low was 3.3 months in August 2020.

This is well above the top of the normal range (about 4 to 6 months of supply is normal).

"The seasonally-adjusted estimate of new houses for sale at the end of March 2025 was 503,000. This is 0.6 percent above the February 2025 estimate of 500,000, and is 7.9 percent above the March 2024 estimate of 466,000.

This represents a supply of 8.3 months at the current sales rate. The months' supply is 6.7 percent below the February 2025 estimate of 8.9 months, and is 1.2 percent above the March 2024 estimate of 8.2 months."

Sales were above expectations of 680 thousand SAAR, however sales for the three previous months were revised down, combined. I'll have more later today.

by Calculated Risk on 4/23/2025 07:00:00 AM

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

Mortgage applications decreased 12.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 18, 2025.

The Market Composite Index, a measure of mortgage loan application volume, decreased 12.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 11 percent compared with the previous week. The Refinance Index decreased 20 percent from the previous week and was 43 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 6 percent higher than the same week one year ago.

“Overall mortgage application activity declined last week, as rates increased to their highest level in two months. The 30-year fixed rate rose for the second straight week to 6.9 percent, an almost 30-basis-point increase over two weeks,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “These higher rates drove a 20 percent drop in refinance applications, especially for higher balance loans, with the average loan size falling substantially. The refinance share of applications at 37.3 percent was the lowest since January. Similar to the previous week, economic uncertainty and rate volatility impacted prospective homebuyers as we saw a 7 percent decline in purchase applications. Both conventional and government purchase activity fell relative to the week before, but the overall level of purchase applications was still 6 percent higher than a year ago.”
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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.90 percent from 6.81 percent, with points increasing to 0.66 from 0.62 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 6% year-over-year unadjusted. 

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

Purchase application activity is up about 22% from the lows in late October 2023 and is 2% above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index decreased.

by Calculated Risk on 4/22/2025 07:44:00 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 10:00 AM, New Home Sales for March from the Census Bureau. The consensus is for 680 thousand SAAR, up from 676 thousand in February.

• During the day, The AIA's Architecture Billings Index for March (a leading indicator for commercial real estate).

• 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 4/22/2025 12:49:00 PM

Goldman Sachs economists put out a note this morning: When Will Growth Slow, and When Will We Know?

A few brief excerpts:

Most of the sequential inflation increases in the last trade war took place within 2-3 months of the tariffs’ implementation, and we expect spending growth to slow shortly after prices start rising.
...
[W]e expect to see continued softness in the survey data before the hard data start to weaken around mid-to-late summer. Our analysis cautions against dismissing the current deterioration in the survey data despite their recent record, and the evolution of the data in recent weeks is consistent with previous “event-driven” growth slowdowns. Still, it is too early to draw strong conclusions from the limited data we have so far, and we will continue to watch for indications of slower growth in the coming months.

It will take some time for tariffs and policy uncertainty to show up in the hard data. I think we will start seeing the impact of tariffs on inflation in the May or June reports (released in June and July).

We might see the impact earlier on New Home sales. New home sales are reported when the contract is signed, so the report tomorrow will be for contracts signed in March (prior to the April 2nd tariff shock).  But we might see policy and the stock market sell-off impacting April new home sales in the May report.

by Calculated Risk on 4/22/2025 09:49:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: NMHC on Apartments: Market conditions Tightened in Q1 pre-Tariffs

Excerpt:

From the NMHC: Apartment Market Sees Tighter Conditions, Rebounding Deal Flow and Improved Debt Financing in First Quarter

Changes in U.S. trade policy over the past two weeks have impacted global financial markets, causing stock prices to fall (and then partially recover) and long-term yields to increase amidst a retreat of capital from U.S. Treasuries.

This volatility had a noticeable effect on apartment market sentiment captured in the National Multifamily Housing Council’s (NMHC’s) latest Quarterly Survey of Apartment Market Conditions. More specifically, apartment executives who responded to this month’s survey after the announcement of tariffs on April 2nd—as opposed to the roughly half of respondents who responded in the days prior—were more likely to report worsening conditions for debt and equity financing as well as decreasing sales volume over the preceding three months.
...
• The Market Tightness Index came in at 52 this quarter – above the breakeven level of 50 for the first time since July 2022 – indicating tighter market conditions. This also appears to be the only index value that wat not meaningfully affected by market volatility this round (it makes sense that it would take longer to observe changes in the supply and demand for physical apartment space).

However, take this quarter’s survey results with a grain of salt. As economists at the NMHC mentioned, the negative impact of policy was probably not picked up in this quarter’s market tightness index.

There is much more in the article.

by Calculated Risk on 4/22/2025 08:12:00 AM

From the MBA: Share of Mortgage Loans in Forbearance Decreases Slightly to 0.36% in March

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 2 basis points from 0.38% of servicers’ portfolio volume in the prior month to 0.36% as of March 31, 2025. According to MBA’s estimate, 180,000 homeowners are in forbearance plans. Mortgage servicers have provided approximately 8.6 million forbearances since March 2020.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.13% in March 2025. Ginnie Mae loans in forbearance decreased by 1 basis points to 0.83%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 4 basis points to 0.33%.

“Overall mortgage performance improved in March, with more borrowers making their mortgage payments and fewer borrowers in forbearance and loan workouts compared to the prior month,” said MBA’s Vice President of Industry Analysis Marina Walsh, CMB. “This monthly improvement may be tied to several factors such as receipt of tax refunds and homeowner recovery from natural disasters.”

Added Walsh, “The labor market is relatively healthy, which is helping mortgage performance remain strong. However, compared to one year ago, there are fewer borrowers current on their mortgages. Also, more borrowers in loan workouts – particularly those with FHA loans – are having difficulty staying current.”
...
By reason, 76.0% of borrowers are in forbearance for reasons such as a temporary hardship caused by job loss, death, divorce, or disability. Another 21.4% are in forbearance because of a natural disaster. The remaining 2.6% of borrowers are still in forbearance because of COVID-19.
emphasis added

At the end of March, there were about 180,000 homeowners in forbearance plans.

by Calculated Risk on 4/21/2025 07:33:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Jump Back Toward 7%

The latest headlines involve heavy criticism of Fed Chair Powell on the part of The President. Without any comment on whether that criticism is justified, we can still observe that markets find it unsettling. Traders are expressing that sentiment by pushing stocks lower and rates higher.

Mortgage rates jumped fairly sharply today, with the average lender moving up from 6.87% to just under 7.00% for top tier 30yr fixed scenarios. [30 year fixed 6.98%]
emphasis added

Tuesday:
• At 10:00 AM ET, Richmond Fed Survey of Manufacturing Activity for April.

by Calculated Risk on 4/21/2025 02:03:00 PM

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 4.06 million in March, down 4.7% from February’s preliminary pace and down 1.5% from last March’s seasonally adjusted pace.

Local realtor/MLS reports suggest that the median existing single-family home sales price last month was up by about 2.6% from a year earlier.

CR Note: The NAR is scheduled to release March Existing Home sales on Thursday, April 24th at 10:00 AM. The consensus is for 4.14 million SAAR, down from 4.26 million. Last year, the NAR reported sales in March 2024 at 4.12 million SAAR.

by Calculated Risk on 4/21/2025 02:01:00 PM

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12-month average.

Click on graph for larger image.

On a rolling 12-month basis, inbound traffic increased 0.8% in March compared to the rolling 12 months ending the previous month.   Outbound traffic decreased 0.9% compared to the rolling 12 months ending the previous month.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday and then decline sharply and bottom in the Winter depending on the timing of the Chinese New Year.  

Imports were up 12% YoY in March and exports were down 9% YoY.    

Recently importers rushed to beat the tariffs.  And port traffic will likely slow sharply in coming months.