by Calculated Risk on 4/17/2025 01:05:00 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 March, Realtor.com reported inventory was up 28.5% YoY, but still down 20.2% compared to the 2017 to 2019 same month levels. 

 Now - on a weekly basis - inventory is up 31.2% 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 April 12, 2025

• Active inventory climbed 31.2% from a year ago

The number of homes actively for sale remains significantly higher than last year, continuing a 75-week streak of annual gains.

• ew listings—a measure of sellers putting homes up for sale—increased 12.8%

New listings were up 12.8% compared with this time last year, marking the 14th straight week of annual growth.

• The median list price was flat year over year

The national median list price was flat compared with a year ago, aligning with the recent trend of flat or falling prices after last week’s slight uptick. In particular, recent economic uncertainty and concerns around job security could keep buyers on the sidelines, potentially applying downward pressure on prices.

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

Inventory was up year-over-year for the 75th consecutive week.  

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

Median list prices are mostly unchanged year-over-year.

Weekly Schedule

by Calculated Risk on 4/17/2025 09:30:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Housing Starts Decreased to 1.324 million Annual Rate in March

A brief excerpt:

First, from Reuters: D.R. Horton cuts 2025 revenue forecast on weak demand for homes

U.S. homebuilder D.R. Horton lowered its full-year revenue forecast and missed second-quarter profit and revenue estimates on Thursday due to weak demand for homes. … It sees about 85,000 to 87,000 transaction closings from homebuilding operations, down from its earlier forecast of 90,000 to 92,000 homes.

I discussed weaker demand and higher costs last month in Policy and 2025 Housing Outlook

Housing Starts Decreased to 1.324 million Annual Rate in March
...
Total housing starts in March were well below expectations; however, starts in January and February were revised up slightly, combined.

The third graph shows the month-to-month comparison for total starts between 2024 (blue) and 2025 (red).

Total starts were up 1.9% in March compared to March 2024. Year-to-date (YTD) starts are down 1.5% compared to the same period in 2024. Single family starts are down 5.6% YTD and multi-family up 9.0% YTD.

There is much more in the article.

by Calculated Risk on 4/17/2025 08:40:00 AM

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,324,000. This is 11.4 percent below the revised February estimate of 1,494,000, but is 1.9 percent above the March 2024 rate of 1,299,000. Single-family housing starts in March were at a rate of 940,000; this is 14.2 percent below the revised February figure of 1,096,000. The March rate for units in buildings with five units or more was 371,000.

Building Permits:
Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,482,000. This is 1.6 percent above the revised February rate of 1,459,000, but is 0.2 percent below the March 2024 rate of 1,485,000. Single-family authorizations in March were at a rate of 978,000; this is 2.0 percent below the revised February figure of 998,000. Authorizations of units in buildings with five units or more were at a rate of 445,000 in March.
emphasis added

Click on graph for larger image.

The first graph shows single and multi-family housing starts since 2000.

Multi-family starts (blue, 2+ units) decreased month-over-month in March.   Multi-family starts were up sharply year-over-year (March 2024 was very weak).

Single-family starts (red) decreased in March and were down 9.7% year-over-year.

The second graph shows single and multi-family housing starts since 1968.

This shows the huge collapse following the housing bubble, and then the eventual recovery - and the recent collapse and recovery in single-family starts.

Total housing starts in March were well below expectations; however, starts in January and February were revised up slightly, combined.

I'll have more later …

by Calculated Risk on 4/17/2025 08:31:00 AM

The DOL reported:

In the week ending April 12, the advance figure for seasonally adjusted initial claims was 215,000, a decrease of 9,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 223,000 to 224,000. The 4-week moving average was 220,750, a decrease of 2,500 from the previous week's revised average. The previous week's average was revised up by 250 from 223,000 to 223,250.
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 220,750.

The previous week was revised up.

Weekly claims were lower than the consensus forecast.

by Calculated Risk on 4/16/2025 07:11:00 PM

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

Thursday:
• At 8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 224 initial claims up from 223 thousand last week.

• At 8:30 AM ET: Housing Starts for March. The consensus is for 1.410 million SAAR, down from 1.501 million SAAR in February.

• At 8:30 AM: the Philly Fed manufacturing survey for April. The consensus is for a reading of 6.7, down from 12.5.

by Calculated Risk on 4/16/2025 01:30:00 PM

From Fed Chair Powell: Economic Outlook Excerpt:

Looking forward, the new Administration is in the process of implementing substantial policy changes in four distinct areas: trade, immigration, fiscal policy, and regulation. Those policies are still evolving, and their effects on the economy remain highly uncertain. As we learn more, we will continue to update our assessment. The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth. Both survey- and market-based measures of near-term inflation expectations have moved up significantly, with survey participants pointing to tariffs. Survey measures of longer-term inflation expectations, for the most part, appear to remain well anchored; market-based breakevens continue to run close to 2 percent.

Monetary Policy

As we gain a better understanding of the policy changes, we will have a better sense of the implications for the economy, and hence for monetary policy. Tariffs are highly likely to generate at least a temporary rise in inflation. The inflationary effects could also be more persistent. Avoiding that outcome will depend on the size of the effects, on how long it takes for them to pass through fully to prices, and, ultimately, on keeping longer-term inflation expectations well anchored.

Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem. As we act to meet that obligation, we will balance our maximum-‑employment and price-stability mandates, keeping in mind that, without price stability, we cannot achieve the long periods of strong labor market conditions that benefit all Americans. We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension. If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.
emphasis added

by Calculated Risk on 4/16/2025 11:29:00 AM

From CoStar: US inbound international travel takes 12% hit as economists postpone pre-pandemic recovery to 2029

Whatever hopes the travel industry had in a full recovery to 2019 levels of travel bookings this year have officially been dashed, according to one economist.

"Our pre-inauguration forecast expected international travel to nearly fully recover in 2025 to 2019 levels. We're now pushing that out to 2029," Adam Sacks, president at Tourism Economics, said on a webinar Tuesday. "Now we're looking at a full 10 years between pre-pandemic and what will be full recovery. And, of course, that comes with significant economic losses."
...
The U.S. is already seeing a decline in international travelers, Sacks said. According to National Travel and Tourism Office data, overseas visitor arrivals into the U.S. in March dropped 11.6% year over year.

"What we see is that the things that have really affected international [travel] — it has as much to do with words as it does with action," Sacks said. "It's not only policy, it is rhetoric, the trade war itself, it needs to be said, it's intrinsically combative. It's called a war."

Not only are Trump's tariffs effecting global sentiment, but the way he speaks of commandeering other countries, reduced support for Ukraine and enforces deportations is driving off travelers.

While domestic travel should still remain strong, maybe even buoyed by Americans staying closer to home, the drop in international travel is "not going to fully compensate for the losses," Sacks said.

by Calculated Risk on 4/16/2025 10:00:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 40, up from 39 last month. Any number below 50 indicates that more builders view sales conditions as poor than good.

From the NAHB: Builder Confidence Levels Indicate Slow Start for Spring Housing Season

Growing economic uncertainty stemming from tariff concerns and elevated building material costs kept builder sentiment in negative territory in April, despite a modest bump in confidence likely due to a slight retreat in mortgage interest rates in recent weeks.

Builder confidence in the market for newly built single-family homes was 40 in April, edging up one point from March, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today.

“The recent dip in mortgage rates may have pushed some buyers off the fence in March, helping builders with sales activity,” said NAHB Chairman Buddy Hughes, a home builder and developer from Lexington, N.C. “At the same time, builders have expressed growing uncertainty over market conditions as tariffs have increased price volatility for building materials at a time when the industry continues to grapple with labor shortages and a lack of buildable lots.”

“Policy uncertainty is having a negative impact on home builders, making it difficult for them to accurately price homes and make critical business decisions,” said NAHB Chief Economist Robert Dietz. “The April HMI data indicates that the tariff cost effect is already taking hold, with the majority of builders reporting cost increases on building materials due to tariffs.”

When asked about the impact of tariffs on their business, 60% of builders reported their suppliers have already increased or announced increases of material prices due to tariffs. On average, suppliers have increased their prices by 6.3% in response to announced, enacted, or expected tariffs. This means builders estimate a typical cost effect from recent tariff actions at $10,900 per home.
...
The HMI index gauging current sales conditions rose two points in April to a level of 45. The gauge charting traffic of prospective buyers increased one point to 25 while the component measuring sales expectations in the next six months fell four points to 43.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell seven points in April to 47, the Midwest moved one point lower to 41, the South dropped three points to 39 and the West posted a two-point decline to 35.
emphasis added

Click on graph for larger image.

This graph shows the NAHB index since Jan 1985.

This was slightly above the consensus forecast.

by Calculated Risk on 4/16/2025 09:15:00 AM

From the Fed: Industrial Production and Capacity Utilization

Industrial production (IP) decreased 0.3 percent in March but increased at an annual rate of 5.5 percent in the first quarter. The March decline was led by a 5.8 percent drop in the index for utilities, as temperatures were warmer than is typical for the month. In contrast, the indexes for manufacturing and mining grew 0.3 percent and 0.6 percent, respectively. At 103.9 percent of its 2017 average, total IP in March was 1.3 percent above its year-earlier level. Capacity utilization stepped down to 77.8 percent, a rate that is 1.8 percentage points below its long-run (1972–2024) average.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and close to the level in February 2020 (pre-pandemic).

Capacity utilization at 77.8% is 1.8% below the average from 1972 to 2023.  This was below consensus expectations.

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

The second graph shows industrial production since 1967.

Industrial production decreased to 103.9. This is above the pre-pandemic level.

Industrial production was at consensus expectations.

by Calculated Risk on 4/16/2025 08:30:00 AM

On a monthly basis, retail sales increased 1.4% from February to March (seasonally adjusted), and sales were up 4.6 percent from March 2024.

From the Census Bureau report:

Advance estimates of U.S. retail and food services sales for March 2025, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $734.9 billion, up 1.4 percent from the previous month, and up 4.6 percent from March 2024. ... The January 2025 to February 2025 percent change was unrevised from up 0.2 percent.
emphasis added

Click on graph for larger image.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

Retail sales ex-gasoline was up 1.7% in March.

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail and Food service sales, ex-gasoline, increased by 5.2% on a YoY basis.

The change in sales in March were slightly above expectations, and sales in January and February were revised up, combined.