by Calculated Risk on 4/29/2025 01:28:00 PM

This substack is from a auto industry insider: Inside the Auto Tariff Battle: What Washington Is Not Saying Out Loud

A friend of mine who lives in the thick of Washington called me this week. What he said made me sit up straight.

The news is spinning a safe version of what is happening.
They are missing the real pulse.
Right now, April 2025, the Trump administration has dropped a hammer.
...
Some midsize SUVs and pickup trucks are quietly getting new sticker prices.
The big jump is expected by June.
Most insiders are whispering five to fifteen percent increases depending on the model.
Some high-volume imports could climb even higher.

CR Note: From ABC News this morning: Trump to ease tariffs faced by US automakers

President Donald Trump is set to provide tariff relief for carmakers on Tuesday, just weeks after the onset of auto levies triggered warnings of price increases.

An administration official confirmed that the 25% tariff on finished foreign-made cars and parts will remain -- but today's announcement will prevent tariffs from stacking on top of other tariffs he's imposed, such as duties on steel and aluminum.

Trump's 25% tariff on foreign auto parts goes into effect on Saturday and automakers will also be reimbursed for those tariffs up to an amount equal to 3.75% of the value of a U.S.-made car for one year. Reimbursement would fall to 2.5% of the car's value in a second year, and then completely phased out altogether.
emphasis added

by Calculated Risk on 4/29/2025 10:00:00 AM

From the BLS: Job Openings and Labor Turnover Summary

The number of job openings was little changed at 7.2 million in March, the U.S. Bureau of Labor Statistics reported today. Over the month, hires held at 5.4 million, and total separations changed little at 5.1 million. Within separations, quits (3.3 million) were unchanged and layoffs and discharges (1.6 million) edged down.
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 March; the employment report this Friday will be for April.

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 decreased in March to 7.19 million from 7.48 million in February.

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

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

by Calculated Risk on 4/29/2025 09:51:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Case-Shiller: National House Price Index Up 3.9% year-over-year in February

Excerpt:

S&P/Case-Shiller released the monthly Home Price Indices for February ("February" is a 3-month average of December, January and February closing prices). January closing prices include some contracts signed in October, so there is a significant lag to this data. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).

The MoM increase in the seasonally adjusted (SA) Case-Shiller National Index was at 0.26% (a 3.1% annual rate), This was the 25th consecutive MoM increase in the seasonally adjusted index.

On a seasonally adjusted basis, prices increased month-to-month in 14 of the 20 Case-Shiller cities. San Francisco has fallen 4.9% from the recent peak, Tampa is down 1.6% from the peak, and Denver down 1.1%.

There is much more in the article.

by Calculated Risk on 4/29/2025 09:00:00 AM

S&P/Case-Shiller released the monthly Home Price Indices for February ("February" is a 3-month average of December, January and February 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 February 2025

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 February, down from a 4.1% annual gain in the previous month. The 10-City Composite saw an annual increase of 5.2%, down from a 5.4% annual increase in the previous month. The 20-City Composite posted a year-over-year increase of 4.5%, down from a 4.7% increase in the previous month. New York again reported the highest annual gain among the 20 cities with a 7.7% increase in February, followed by Chicago and Cleveland with annual increases of 7.0% and 6.6%, respectively. Tampa posted the lowest return, falling 1.5%.
...
The pre-seasonally adjusted U.S. National, 10-City Composite, and 20-City Composite Indices presented slight upward trends in February, posting 0.4%, 0.8%, and 0.7% respectively.

After seasonal adjustment, the 10-City and 20-City Composite Indices posted month-over-month increases of 0.5% and 0.4%. The U.S. National Composite Index posted a month-over-month increase of 0.3%.

“Even with mortgage rates remaining in the mid-6% range and affordability challenges lingering, home prices have shown notable resilience,” said Nicholas Godec, CFA, CAIA, CIPM, Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices. “Buyer demand has certainly cooled compared to the frenzied pace of prior years, but limited housing supply continues to underpin prices in most markets. Rather than broad declines, we are seeing a slower, more sustainable pace of price growth.”
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 February (SA).  The Composite 20 index was up 0.4% (SA) in February.

The National index was up 0.3% (SA) in February.

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

The Composite 10 NSA was up 5.2% 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 lower than expectations.  I'll have more later.

by Calculated Risk on 4/28/2025 07:15:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Start New Week Slightly Lower

Mortgage rates ended last week at the lowest levels since April 7th. The average lender remained at those same levels at the start of business today, but many lenders offered modest improvements as the day progressed.
...
As the week continues, there will be more and more scheduled events with the power to cause intraday volatility and even to impact the longer-term trend. As for that trend, it is arguably flat at the moment after experiencing significant volatility for most of the month of April. [30 year fixed 6.82%]
emphasis added

Tuesday:
• At 9:00 AM ET, S&P/Case-Shiller House Price Index for February. The consensus is for a 4.8% year-over-year increase in the Comp 20 index for February, up from 4.7% YoY.

• Also at 9:00 AM, FHFA House Price Index for February. This was originally a GSE only repeat sales, however there is also an expanded index.

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

by Calculated Risk on 4/28/2025 11:26:00 AM

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

The big story for March was that existing home sales decreased year-over-year (YoY) for the 2nd consecutive month following four consecutive months with a year-over-year increase. Sales at 4.02 million on a Seasonally Adjusted Annual Rate (SAAR) basis were below the consensus estimate; however, housing economist Tom Lawler’s estimate was very close (as usual).

Sales averaged close to 5.5 million SAAR for the month of March in the 2017-2019 period. So, sales are still about 27% below pre-pandemic levels.

Also, months-of-supply for March was above pre-pandemic levels for the period 2017-2019.
...
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 May for activity in April!

There is much more in the article.

by Calculated Risk on 4/28/2025 10:00:00 AM

The Census Bureau released the Residential Vacancies and Homeownership report for Q1 2025 today.

The results of this survey were significantly distorted by the pandemic in 2020.

This report is frequently mentioned by analysts and the media to track household formation, the homeownership rate, and the homeowner and rental vacancy rates.  However, there are serious questions about the accuracy of this survey.

This survey might show the trend, but I wouldn't rely on the absolute numbers. Analysts probably shouldn't use the HVS to estimate the excess vacant supply or household formation, or rely on the homeownership rate, except as a guide to the trend.

National vacancy rates in the first quarter 2025 were 7.1 percent for rental housing and 1.1 percent for homeowner housing. The rental vacancy rate was higher than the rate in the first quarter 2024 (6.6 percent) and not statistically different from the rate in the fourth quarter 2024 (6.9 percent).

The homeowner vacancy rate of 1.1 percent was higher than the rate in the first quarter 2024 (0.8 percent) and virtually the same as the rate in the fourth quarter 2024 (1.1 percent).

The homeownership rate of 65.1 percent was not statistically different from the rate in the first quarter 2024 (65.6 percent) and lower than the rate in the fourth quarter 2024 (65.7 percent).
emphasis added

Click on graph for larger image.

The Red dots are the decennial Census homeownership rates for April 1st, 1990, 2000, 2010, and 2020. 

The HVS homeownership rate was decreased to 65.1% in Q1, from 65.7% in Q4.  

The results in Q2 and Q3 2020 were distorted by the pandemic and should be ignored.

The HVS homeowner vacancy was unchanged at 1.1% in Q1 from 1.1% in Q4.

The homeowner vacancy rate declined sharply during the pandemic and includes homes that are vacant and for sale (so this mirrors the low but increasing levels of existing home inventory).

Once again - this probably shows the general trend, but I wouldn't rely on the absolute numbers.

The rental vacancy rate increased to 7.1% in Q1 from 6.9% in Q4.  This is up from the low of 5.6% in 2021 and 2022 and at the highest level since 2018.

The quarterly HVS is the timeliest survey on households, but there are many questions about the accuracy of this survey.

by Calculated Risk on 4/28/2025 08:14:00 AM

Altos reports that active single-family inventory was up 1.3% week-over-week.

Inventory is now up 16.7% from the seasonal bottom in January and is increasing.  

Usually, inventory is up about 9% from the seasonal low by this week in the year.   So, 2025 is seeing a larger than normal pickup in inventory.

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 31.0% compared to the same week in 2024 (last week it was up 32.6%), and down 16.1% compared to the same week in 2019 (last week it was down 16.7%). 

Inventory will likely pass 2020 same week levels next week and also be close to the peak for 2024.  

It now appears inventory will be close to 2019 levels towards the end of 2025.

This second inventory graph is courtesy of Altos Research.

As of April 25th, inventory was at 729 thousand (7-day average), compared to 719 thousand the prior week. 

Mike Simonsen discusses this data regularly on Youtube

by Calculated Risk on 4/27/2025 06:17:00 PM

Weekend:
• Schedule for Week of April 27, 2025

Monday:
• At 10:00 AM ET, the Q1 2025 Housing Vacancies and Homeownership from the Census Bureau.

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

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 12 and DOW futures are down 75 (fair value).

Oil prices were up over the last week with WTI futures at $63.02 per barrel and Brent at $66.87 per barrel. A year ago, WTI was at $85, and Brent was at $90 - so WTI oil prices are down about 26% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.12 per gallon. A year ago, prices were at $3.66 per gallon, so gasoline prices are down $0.54 year-over-year.

by Calculated Risk on 4/27/2025 08:47:00 AM

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 April 25, 2025, LBR was at $573.00 per 1,000 board feet, up 11% 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.

Last year, prices bottomed in July at $449.00 per 1,000 board feet.

The recent year-over-year increase might be due to the tariffs.