by Calculated Risk on 5/22/2025 10:52:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: NAR: Existing-Home Sales Decreased to 4.00 million SAAR in April; Down 2.0% YoY

Excerpt:

Sales in April (4.00 million SAAR) were down 0.5% from the previous month and were 2.0% below the April 2024 sales rate. This was the 3rd consecutive month with a year-over-year decline in sales.
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Sales Year-over-Year and Not Seasonally Adjusted (NSA)

The fourth graph shows existing home sales by month for 2024 and 2025.

Sales decreased 2.0% year-over-year compared to April 2024.
...
On an NSA basis for the month of April, this was at the low for housing bust for the month of April that happened in April 2009. Year-to-date, sales are down 2.4% NSA.

There is much more in the article.

Weekly Schedule

by Calculated Risk on 5/22/2025 10:00:00 AM

From the NAR: Existing-Home Sales Edged Lower by 0.5% in April

Existing-home sales slowed in April, according to the National Association of REALTORS®. Sales dipped in the Northeast and West, grew in the Midwest and were unchanged in the South. Year-over-year, sales declined in three regions and remained steady in the Northeast.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – slipped 0.5% from March to a seasonally adjusted annual rate of 4.00 million in April. Year-over-year, sales descended 2.0% (down from 4.08 million in April 2024)..
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Total housing inventory registered at the end of April was 1.45 million units, up 9.0% from March and 20.8% from one year ago (1.2 million). Unsold inventory sits at a 4.4-month supply at the current sales pace, up from 4.0 months in March and 3.5 months in April 2024.
emphasis added

Click on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1994.

Sales in April (4.00 million SAAR) were down 0.5% from the previous month and were 2.0% below the April 2024 sales rate.  This was the 3rd consecutive month with a year--over-year decline in sales. 

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 1.45 million in April from 1.33 million the previous month.

Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory was up 20.8% year-over-year (blue) in April compared to April 2024.

Months of supply (red) increased to 4.4 months in April from 4.0 months the previous month.

As expected, the sales rate was below the consensus forecast.  I'll have more later. 

by Calculated Risk on 5/22/2025 08:30:00 AM

The DOL reported:

In the week ending May 17, the advance figure for seasonally adjusted initial claims was 227,000, a decrease of 2,000 from the previous week's unrevised level of 229,000. The 4-week moving average was 231,500, an increase of 1,000 from the previous week's unrevised average of 230,500.
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 increased to 231,500.

The previous week was unrevised.

Weekly claims were lower than the consensus forecast.

by Calculated Risk on 5/21/2025 07:01:00 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 initial claims of 232 thousand, up from 229 thousand last week.

• Also at 8:30 AM, Chicago Fed National Activity Index for April. This is a composite index of other data.

• At 10:00 AM, Existing Home Sales for April from the National Association of Realtors (NAR). The consensus is for 4.15 million SAAR, up from 4.02 million. Housing economist Tom Lawler expects the NAR to report sales of 3.98 million SAAR.

by Calculated Risk on 5/21/2025 03:12:00 PM

The ICE Home Price Index (HPI) is a repeat sales index. ICE reports the median price change of the repeat sales.

From ICE (Intercontinental Exchange):

Annual home price growth nationally slowed to 1.6% in May from 2% in April, as inventory surpluses that began in the Sunbelt spread to the West.

• 40% of the nation’s largest housing markets experienced seasonally adjusted month-over-month price declines from April to May, including 23 of the 24 top markets in the West

• The number of markets with year-over-year price declines increased from 9 to 23 by mid-May, with a majority (9) of the newcomers located in the West

• Those markets include: Denver (-1.6%), San Francisco and Stockton, Calif. (-1.5%), Phoenix (-1.2%), with more modest declines in Honolulu, Colorado Springs, Tucson, Sacramento, and San Diego

• That’s the largest number of markets with annual price declines since interest rates surged above 7.5% in late 2023

Price declines appear to be inventory driven:

• Western markets (led by California) have seen sharp rises in inventory, with every major California market now having at least +40% more homes available for sale than at the same time last year, led by Stockton (+87% ) and Oxnard and San Diego (+70% each)

• Inventories in San Francisco, San Jose, and Stockton have already surpassed pre-pandemic levels, with other California markets on pace to ‘normalize’ later this year

If current trends persist, we could see prices fall year over year in even more West Coast markets.

As ICE mentioned, cities in the South have been leading the way in inventory increases and price declines (especially Florida and Texas). Now the West Coast markets are following, although inventory levels are mostly still below the pre-pandemic levels.

by Calculated Risk on 5/21/2025 01:01:00 PM

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.

From the AIA: ABI April 2025: Billings continue to decline at architecture firms

The AIA/Deltek Architecture Billings Index (ABI) score declined to 43.2 for the month. Billings have declined for 28 of the last 31 months, since they first dipped back into negative territory following the post-pandemic boom. Despite generally strong backlogs at firms, inquiries into new work declined for the third consecutive month in April, while the value of new design contracts declined at the majority of firms for the fourteenth consecutive month. Although the U.S. economy is not officially in a recession at this time, many architecture firms are reporting recession-like business conditions.

Regionally, business conditions at architecture firms remained softest at firms located in the Northeast for the seventh consecutive month in April. Conditions have also softened significantly at firms located in the West since the beginning of the year. In addition, billings continued to decline at firms of all specializations this month, particularly at firms with commercial/industrial and multifamily residential specializations. The pace of the decline remains slower at firms with an institutional specialization, but billings have still declined nearly every month since mid-2023.
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The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending activity. The score is derived from a monthly survey of architecture firms that measures the change in the number of services provided to clients.
emphasis added

• Northeast (40.2); Midwest (44.4); South (46.2); West (42.1)

• Sector index breakdown: commercial/industrial (40.5); institutional (46.3); multifamily residential (40.8)

Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 43.2 in April, down from 44.1 in March.  Anything below 50 indicates a decrease in demand for architects' services.

This index has indicated contraction for 28 of the last 31 months.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

This index usually leads CRE investment by 9 to 12 months, so this index suggests a slowdown in CRE investment throughout 2025 and into 2026.

Multi-family billings have been below 50 for the 33 consecutive months.  This suggests we will see continued weakness in multi-family starts.

by Calculated Risk on 5/21/2025 09:52:00 AM

Today, in the Real Estate Newsletter: In Q1 2025, 19% of Units Started Built-for-Rent were Single Family

Brief excerpt:

Along with the monthly housing starts report for April released last week, the Census Bureau also released Housing Units Started by Purpose and Design through Q1 2025.

The first graph shows the number of single family and multi-family units started with the intent to rent. This data is quarterly and Not Seasonally Adjusted (NSA). Although the majority of units built-for-rent’ are still multi-family (blue) - even after the sharp decline in 2022 - there has been a significant pickup in single family units started built-for-rent (red).

A total of 102,000 units were started built-for-rent in Q1, with 19% single family units.

There is much more in the newsletter.

by Calculated Risk on 5/21/2025 07:00:00 AM

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

Mortgage applications decreased 5.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 16, 2025.

The Market Composite Index, a measure of mortgage loan application volume, decreased 5.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week and was 27 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 13 percent higher than the same week one year ago.

“Mortgage rates jumped to their highest level since February last week, with investors concerned about rising inflation and the impact of increasing deficits and debt,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Higher rates, including the 30-year fixed rate increasing to 6.92 percent, led to a slowdown across the board. However, purchase applications are up 13 percent from one 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 6.92 percent from 6.86 percent, with points increasing to 0.69 from 0.68 (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 13% year-over-year unadjusted. 

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

Purchase application activity is up from the lows in late October 2023 and is 5% above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index decreased and remained very low.

by Calculated Risk on 5/20/2025 07:41:00 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, State Employment and Unemployment (Monthly) for April 2025

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

by Calculated Risk on 5/20/2025 03:52:00 PM

From WardsAuto: U.S. Light-Vehicle Sales Cooling Off in May; Inventory Still Falling (pay content).  Brief excerpt:

With inventory set to continue declining month-to-month, and the cost to automakers of the tariffs more strongly kicking in by July, sales are likely to continue sequential weakness into the summer – unless automakers decide to eat most of the increased cost. Based on the North America production outlook for the next several months, most are not planning to eat a lot of the cost.
emphasis added

Click on graph for larger image.

This graph shows actual sales from the BEA (Blue), and Wards forecast for May (Red).

On a seasonally adjusted annual rate basis, the Wards forecast of 15.9 million SAAR, would be down 7.9% from last month, and up 0.5% from a year ago.

Car buyers rushed to buy over the previous couple of months to beat the tariffs.  There will be further payback in coming months.