RSS Feed by Calculated Risk on 5/05/2025 08:11:00 AM
Monday, May 05, 2025
Housing May 4th Weekly Update: Inventory up 2.1% Week-over-week, Up 32.9% Year-over-year
Altos reports that active single-family inventory was up 2.1% week-over-week.
Inventory is now up 19.2% from the seasonal bottom in January and is increasing.
Usually, inventory is up about 10% 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 32.9% compared to the same week in 2024 (last week it was up 31.0%), and down 16.0% compared to the same week in 2019 (last week it was down 16.1%).
Inventory passed 2020 same week levels this week and is also above the peak for last year (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 May 2nd, inventory was at 744 thousand (7-day average), compared to 729 thousand the prior week.
Mike Simonsen discusses this data regularly on Youtube
Sunday, May 04, 2025
Monday: ISM Services
by Calculated Risk on 5/04/2025 06:13:00 PM
Weekend:
• Schedule for Week of May 4, 2025
Monday:
• At 10:00 AM ET, the ISM Services Index for April. The consensus is for a reading of 50.6, down from 50.8.
From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 12 and DOW futures are down 80 (fair value).
Oil prices were down over the last week with WTI futures at $58.29 per barrel and Brent at $61.29 per barrel. A year ago, WTI was at $80, and Brent was at $84 - so WTI oil prices are down about 27% year-over-year.
Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.14 per gallon. A year ago, prices were at $3.63 per gallon, so gasoline prices are down $0.49 year-over-year.
FOMC Preview: No Change to Fed Funds Rate
by Calculated Risk on 5/04/2025 09:22:00 AM
Most analysts expect no change to FOMC policy at the meeting this week, keeping the target range at 4 1/4 to 4 1/2 percent. Market participants currently expect the FOMC to also be on hold at the June meeting, with the next rate cut in July, and one or two more rate cuts later in the year.
From BofA:
The May FOMC meeting looks like a placeholder: policy rates on hold and no change in Chair Powell’s tone from his recent speeches. He will probably reiterate that the Fed is assessing the total impact of all policy changes by the Trump Administration, not just trade policy in isolation. We think the bar for a June cut is high, but Powell is unlikely to rule it out at this stage.
emphasis added
Projections will NOT be released at this meeting. For review, here are the March projections.
1 Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.
The unemployment rate was at 4.2% in April and after averaging 4.1% for Q1. The forecast for the Q4 unemployment rate is likely low.
2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.
As of March 2025, PCE inflation increased 2.3 percent year-over-year (YoY). There will likely be some increase in PCE inflation from policy, but this appears to in the forecast range.
PCE core inflation increased 2.6 percent YoY in March. This is in the range of FOMC projections for Q4.
The FOMC participants’ midpoint of the target level for the federal funds rate is now at 4.0% at the end of 2025 (3.9%-4.4%) and the long run range is 2.6% to 3.6%. This is fewer rate cuts than market participants expect.
Since the last projections were released, economic growth has been below expectations (but distorted), the unemployment rate was close to expectations, and inflation at expectations.
The BEA's advance estimate for Q1 GDP showed real growth at -0.3% annualized. There is a wide range of estimates for Q2 GDP, but it is forecast to be close to 2.0%. That would put real growth for Q1 over Q1, at 1.8% - in the range of the March FOMC projections for Q4 over Q4.
However, Q2, Q3 and Q4 all saw solid growth last year - and we haven't seen the impact of policy changes on hard data yet - so it is likely Q4 over Q4 GDP will be below the March forecast range.
| GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1 | ||||
|---|---|---|---|---|
| Projection Date | 2025 | 2026 | 2027 | |
| Mar 2025 | 1.5 to 1.9 | 1.6 to 1.9 | 1.6 to 2.0 | |
| Dec 2024 | 1.8 to 2.2 | 1.9 to 2.1 | 1.8 to 2.0 | |
The unemployment rate was at 4.2% in April and after averaging 4.1% for Q1. The forecast for the Q4 unemployment rate is likely low.
| Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2 | ||||
|---|---|---|---|---|
| Projection Date | 2025 | 2026 | 2027 | |
| Mar 2025 | 4.3 to 4.4 | 4.2 to 4.5 | 4.1 to 4.4 | |
| Dec 2024 | 4.2 to 4.5 | 4.1 to 4.4 | 4.0 to 4.4 | |
As of March 2025, PCE inflation increased 2.3 percent year-over-year (YoY). There will likely be some increase in PCE inflation from policy, but this appears to in the forecast range.
Without policy changes (tariffs) it appears inflation would be below the FOMC forecast!
| Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1 | ||||
|---|---|---|---|---|
| Projection Date | 2025 | 2026 | 2027 | |
| Mar 2025 | 2.6 to 2.9 | 2.1 to 2.3 | 2.0 to 2.1 | |
| Dec 2024 | 2.3 to 2.6 | 2.0-2.2 | 2.0 | |
PCE core inflation increased 2.6 percent YoY in March. This is in the range of FOMC projections for Q4.
| Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1 | ||||
|---|---|---|---|---|
| Projection Date | 2025 | 2026 | 2027 | |
| Mar 2025 | 2.7 to 3.0 | 2.1 to 2.4 | 2.0 to 2.1 | |
| Dec 2024 | 2.5 to 2.7 | 2.0-2.3 | 2.0 | |
Saturday, May 03, 2025
Hotels: Occupancy Rate Decreased 1.0% Year-over-year
by Calculated Risk on 5/03/2025 07:04:00 PM
The U.S. hotel industry reported mixed year-over-year comparisons, according to CoStar’s latest data through 26 April. ...The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.
20-26 April 2025 (percentage change from comparable week in 2024):
• Occupancy: 65.1% (-1.0%)
• Average daily rate (ADR): US$161.98 (+4.2%)
• Revenue per available room (RevPAR): US$105.40 (+3.2%)
emphasis added
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 both last year and 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 will likely see a hit to occupancy during the summer months due to less international tourism.
Real Estate Newsletter Articles this Week: House Price Index Up 3.9% year-over-year in February
by Calculated Risk on 5/03/2025 02:11:00 PM
At the Calculated Risk Real Estate Newsletter this week:
Click on graph for larger image.
• Case-Shiller: National House Price Index Up 3.9% year-over-year in February
• Freddie Mac House Price Index Mostly Unchanged in March; Up 3.0% Year-over-year
• Fannie and Freddie: Single Family Serious Delinquency Rates Decreased in March
• Inflation Adjusted House Prices 0.8% Below 2022 Peak
• Final Look at Local Housing Markets in March and a Look Ahead to April Sales
This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.
Schedule for Week of May 4, 2025
by Calculated Risk on 5/03/2025 08:11:00 AM
The key report scheduled for this week is the March trade balance.
The FOMC meets this week and no change to the Fed funds rate is expected.
10:00 AM: the ISM Services Index for April. The consensus is for a reading of 50.6, down from 50.8.
8:30 AM: Trade Balance report for March from the Census Bureau. This graph shows the U.S. trade deficit, with and without petroleum, through the most recent report. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.
The consensus is the trade deficit to be $129.0 billion. The U.S. trade deficit was at $122.7 billion in February as importers rushed to beat the tariffs.
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
2:00 PM: FOMC Meeting Announcement. No change to to the Fed funds rate is expected at this meeting.
2:30 PM: Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims of 223 thousand, down from 241 thousand last week.
No major economic releases scheduled.
Friday, May 02, 2025
May 2nd COVID Update: COVID Deaths Continue to Decline
by Calculated Risk on 5/02/2025 07:56:00 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 | 378 | 461 | ≤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've continued to post since 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 are nearing the lows of last June.
This appears to be a leading indicator for COVID hospitalizations and deaths. This has been moving sideways recently.Nationally COVID in wastewater is "Low".
Q2 GDP Tracking: Back to Growth, Wide Range
by Calculated Risk on 5/02/2025 03:42:00 PM
From BofA (forecast, not tracking):
GDP contracted by 0.3% q.q saar in 1Q, despite solid final demand (+2.3%). In our assessment, the surge in imports (which took 5.0pp off 1Q growth) due to front-running of tariffs was only partially reflected in stronger inventories and final demand. So we have revised our 2Q GDP forecast to reflect a reversal of this dynamic. We now expect 2.0% headline GDP growth (vs. 0.9% previously), but with weaker final domestic sales. [May 2nd estimate]From Goldman:
emphasis added
We launched our Q2 GDP tracking estimate at +2.4% (quarter-over-quarter annualized) and our Q2 domestic final sales estimate at +0.6%. [May 1st estimate]And from the Atlanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 1.1 percent on May 1, down from 2.4 percent on April 30. After this morning’s releases from the US Census Bureau and the Institute for Supply Management, the nowcast of second-quarter real personal consumption expenditures growth and real private fixed investment growth fell from 3.3 percent and 1.4 percent, respectively, to 1.9 percent and -0.7 percent. [May 1st estimate]
Heavy Truck Sales Mostly Unchanged YoY in April
by Calculated Risk on 5/02/2025 01:35:00 PM
This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the April 2025 seasonally adjusted annual sales rate (SAAR) of 505 thousand.
Heavy truck sales really collapsed during the great recession, falling to a low of 180 thousand SAAR in May 2009. Then heavy truck sales increased to a new record high of 570 thousand SAAR in April 2019.
Click on graph for larger image.
Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."
Heavy truck sales declined sharply at the beginning of the pandemic, falling to a low of 288 thousand SAAR in May 2020.
Heavy truck sales were at 505 thousand SAAR in April, up from 450 thousand in March, and up 0.8% from 501 thousand SAAR in April 2025 (essentially unchanged YoY).
Year-to-date (NSA) sales are down 4.6%.
Usually, heavy truck sales decline sharply prior to a recession and sales were solid in April. It is likely that some April truck buyers rushed to beat the tariffs - and we might see some weakness next month.
As I mentioned yesterday, light vehicle sales were strong in April at 17.27 million SAAR as some buyers rushed to beat the tariffs.
The second graph shows light vehicle sales since the BEA started keeping data in 1967. Light vehicle sales were at 17.27 million SAAR in April, down 3.1% from March, and up 7.8% from April 2024.
Fannie and Freddie: Single Family Serious Delinquency Rates Decreased in March; Multi-Family Delinquency Rate Equals Highest Since 2011 (ex-Pandemic)
by Calculated Risk on 5/02/2025 11:04:00 AM
Today, in the Calculated Risk Real Estate Newsletter: Fannie and Freddie: Single Family Serious Delinquency Rates Decreased in March
Excerpt:
Freddie Mac reported that the Single-Family serious delinquency rate in March was 0.59%, down from 0.61% February. Freddie's rate is up year-over-year from 0.52% in March 2024, however, this is close to the pre-pandemic level of 0.60%.
Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble and peaked at 3.17% in August 2020 during the pandemic.
Fannie Mae reported that the Single-Family serious delinquency rate in March was 0.56%, down from 0.57% in February. The serious delinquency rate is up year-over-year from 0.51% in March 2024, however, this is below the pre-pandemic lows of 0.65%.
The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble and peaked at 3.32% in August 2020 during the pandemic.
There is much more in the article.
