by Calculated Risk on 6/06/2025 01:46:00 PM

Today, in the Calculated Risk Real Estate Newsletter: 1st Look at Local Housing Markets in May

A brief excerpt:

Tracking local data gives an early look at what happened the previous month and also reveals regional differences in both sales and inventory.

Closed sales in May were mostly for contracts signed in March and April, and mortgage rates, according to the Freddie Mac PMMS, averaged 6.65% in March and 6.73% in April. This was a decrease from the average rate for homes that closed in April.

NOTE: The tables for active listings, new listings and closed sales all include a comparison to May 2019 for each local market (some 2019 data is not available).
...
In May, sales in these early reporting markets were down 5.5% YoY. Last month, in April, these same markets were down 0.3% year-over-year Not Seasonally Adjusted (NSA).

Important: There were fewer working days in May 2025 (21) as in May 2024 (22). So, the year-over-year change in the headline SA data will be higher than for the NSA data.

Note that most of these early reporting markets have shown stronger year-over-year sales than most other markets for the last several months.
...
This was just several early reporting markets. Many more local markets to come!

There is much more in the article.

Weekly Schedule

by Calculated Risk on 6/06/2025 01:11:00 PM

From BofA:

Since our last weekly publication, our 2Q GDP tracking is up to 2.7% q/q saar from 1.8% q/q saar and 1Q GDP is up two-tenths to 0.0% q/q saar. [June 6th estimate]
emphasis added

From Goldman:

The details of the trade balance report indicated that April exports were stronger than our previous GDP tracking assumptions. We boosted our Q2 GDP tracking estimate by 0.4pp to +3.7% (quarter-over-quarter annualized) and left our Q2 domestic final sales estimate unchanged at -0.5%. [June 5th 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 3.8 percent on June 5, down from 4.6 percent on June 2. After recent releases from the US Census Bureau, the US Bureau of Economic Analysis, and the Institute for Supply Management, the nowcasts of second-quarter real personal consumption expenditures growth and real gross private domestic investment growth decreased from 4.0 percent and 0.5 percent, respectively, to 2.6 percent and -2.2 percent, while the nowcast of the contribution of net exports to annualized second-quarter real GDP growth increased from 1.36 percentage points to 2.01 percentage points. [June 5th estimate]

by Calculated Risk on 6/06/2025 11:10:00 AM

From Manheim Consulting today: Wholesale Used-Vehicle Prices Increased in April

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) were lower in May compared to April. The Manheim Used Vehicle Value Index (MUVVI) declined to 205.2, representing a 4% increase from the same time last year and a 1.4% decline from April levels. The seasonal adjustment slightly lowered the decline seen in the month, as non-seasonally adjusted values fell more than usual following the strong increase in April related to the tariff announcement. The non-adjusted price in May decreased by 1.5% compared to April, resulting in an unadjusted average price that was 4% higher year over year.
emphasis added

Click on graph for larger image.

This index from Manheim Consulting is based on all completed sales transactions at Manheim’s U.S. auctions.

The Manheim index suggests used car prices decreased in May (seasonally adjusted) and were up 4% YoY.

by Calculated Risk on 6/06/2025 09:06:00 AM

The headline jobs number in the May employment report was slightly above expectations, however, March and April payrolls were revised down by 95,000 combined.   The participation rate and the employment population ratio decreased, and the unemployment rate was unchanged at 4.2%.

Earlier: May Employment Report: 139 thousand Jobs, 4.2% Unemployment Rate

Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 years old participation rate decreased in May to 83.4% from 83.6% in April.

The 25 to 54 employment population ratio decreased to 80.5% from 80.7% the previous month.

Both are down slightly from the recent peaks, but still near the highest level this millennium.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 3.9% YoY in May.   

Part Time for Economic Reasons

From the BLS report:

"The number of people employed part time for economic reasons, at 4.6 million, changed little in May. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons decreased in May to 4.62 million from 4.69 million in April.  This is above the pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that was unchanged at 7.8% from 7.8% in the previous month. This is down from the record high in April 2020 of 22.9% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.6%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.46 million workers who have been unemployed for more than 26 weeks and still want a job, down from 1.67 million the previous month.

This is down from post-pandemic high of 4.171 million, and up from the recent low of 1.056 million.

This is above pre-pandemic levels.

Job Streak

Through May 2025, the employment report indicated positive job growth for 53 consecutive months, putting the current streak in 2nd place of the longest job streaks in US history (since 1939).  

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2020	113
2	Current, N/A	531
3	1990	48
4	2007	46
5	1979	45
6 tie	1943	33
6 tie	1986	33
6 tie	2000	33
9	1967	29
10	1995	25
1Currrent Streak

Summary:

The headline jobs number in the May employment report was above expectations, however, March and April payrolls were revised down by 95,000 combined.   The participation rate and employment population ratio increased, and the unemployment rate was unchanged at 4.2%.

This was a solid employment report; however, we've seen significant downward revisions of previous reports for several months in a row.  

The March report revised down the previous two months by 48,000, the April report had 58,000 in downward revisions, and the May report (today) had 95,000 in downward revisions.

by Calculated Risk on 6/06/2025 08:30:00 AM

From the BLS: Employment Situation

Total nonfarm payroll employment increased by 139,000 in May, and the unemployment rate was unchanged at 4.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in health care, leisure and hospitality, and social assistance. Federal government continued to lose jobs.
...
The change in total nonfarm payroll employment for March was revised down by 65,000, from +185,000 to +120,000, and the change for April was revised down by 30,000, from +177,000 to +147,000. With these revisions, employment in March and April combined is 95,000 lower than previously reported.
emphasis added

Click on graph for larger image.

The first graph shows the jobs added per month since January 2021.

Total payrolls increased by 139 thousand in May.  Private payrolls increased by 140 thousand, and public payrolls decreased 1 thousand (Federal payrolls decreased 22 thousand).

Payrolls for March and April were revised down by 95 thousand, combined.

The second graph shows the year-over-year change in total non-farm employment since 1968.

In May, the year-over-year change was 1.73 million jobs.  Employment was up solidly year-over-year.

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate decreased to 62.4% in May, from 62.6% in April. This is the percentage of the working age population in the labor force.

The Employment-Population ratio decreased to 59.7% from 60.0% in April (blue line).

I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate.

The unemployment rate was unchanged at 4.2% in May from 4.2% in April.

This was slightly above consensus expectations; however, March and April payrolls were revised down by 95,000 combined.  

I'll have more later ...

by Calculated Risk on 6/05/2025 08:08:00 PM

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

Friday:
• At 8:30 AM ET, Employment Report for May.   The consensus is for 130,000 jobs added, and for the unemployment rate to be unchanged at 4.2%.

by Calculated Risk on 6/05/2025 04:58:00 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 May, Realtor.com reported inventory was up 31.5% YoY, but still down 14.4% compared to the 2017 to 2019 same month levels. 

 Now - on a weekly basis - inventory is up 29.5% 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 May 31, 2025

• Active inventory climbed 29.5% year over year

The number of homes actively for sale remains on a strong upward trajectory, now 29.5% higher than this time last year. This represents the 82nd consecutive week of annual gains in inventory. There were more than 1 million homes for sale again last week, marking the fourth week in a row over the threshold and the highest inventory level since December 2019.

• New listings—a measure of sellers putting homes up for sale—rose 4.2% year over year

New listings rose again last week on an annual basis, up 4.2% compared with the same period last year, though growth slowed compared with the previous week. Monday’s Memorial Day holiday likely affected listing activity for the week. The momentum that began earlier this spring remains strong ...

• The median list price was flat year over year

The median list price was flat year over year this week as sticky prices persist into the summer. The median list price per square foot—which adjusts for changes in home size—rose 0.9% year over year.

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

Inventory was up year-over-year for the 82nd consecutive week.  

New listings increased.

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

by Calculated Risk on 6/05/2025 02:59:00 PM

From STR: U.S. hotel results for week ending 31 May

The U.S. hotel industry reported negative year-over-year comparisons, according to CoStar’s latest data through 31 May. ...

25-31 May 2025 (percentage change from comparable week in 2024):

• Occupancy: 61.0% (-1.6%)
• Average daily rate (ADR): US$151.48 (-0.3%)
• Revenue per available room (RevPAR): US$92.45 (-1.9%)
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.

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 behind last year and at 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 start to increase with the summer travel season.  We will likely see a hit to occupancy during the summer months due to less international tourism.

by Calculated Risk on 6/05/2025 01:00:00 PM

On Friday at 8:30 AM ET, the BLS will release the employment report for May. The consensus is for 130,000 jobs added, and for the unemployment rate to be unchanged at 4.2%. There were 177,000 jobs added in April, and the unemployment rate was at 4.2%.

From Goldman Sachs:

While the employment component of the ISM services index improved, it remained at a weak level and the ADP measure of job growth was much weaker than expected. We have lowered our forecast for nonfarm payroll growth by 15k to +110k, below consensus of +126k.
emphasis added

From BofA:

Payrolls are likely to rise by a stable 150k after coming in at 177k in April. This is slightly higher than consensus expectations of 130k. Claims in the survey week remained at muted levels. Firms likely paused the hiring of trade & transportation workers after the front-loading driven increase in the previous months. But given elevated uncertainty about the steady state on tariff policy, we don’t think they would have already started shedding workers. Risks are to the downside, in our view. We expect the u-rate to remain at 4.2%.

• ADP Report: The ADP employment report showed 37,000 private sector jobs were added in May.  This was well below consensus forecasts and suggests job gains below consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report.

• ISM Surveys: Note that the ISM indexes are diffusion indexes based on the number of firms hiring (not the number of hires).  The ISM® manufacturing employment index was at 46.8%, up from 46.5% the previous month.   This would suggest some jobs lost in manufacturing. The ADP report indicated 3,000 manufacturing jobs lost in May.

The ISM® services employment index was at 50.7%, up from 49.0% the previous month.   This is still weak, but would suggest some jobs added in services. The ADP report indicated 36,000 service jobs added in May.

• Unemployment Claims: The weekly claims report showed about the same initial unemployment claims during the reference week at 226,000 in May compared to 216,000 in April.  This suggests layoffs in May were about the same or a little more than in April.

• Conclusion: Over the last year, employment gains averaged 157 thousand per month - and that was probably the trend prior to policy changes.  It still seems early for policy to significantly impact the employment report.   However, my guess is we will start to see the impact of policy uncertainty - a little hiring hesitancy - and I'll take the under for May.

by Calculated Risk on 6/05/2025 08:50:00 AM

The Census Bureau and the Bureau of Economic Analysis reported:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $61.6 billion in April, down $76.7 billion from $138.3 billion in March, revised.

April exports were $289.4 billion, $8.3 billion more than March exports. April imports were $351.0 billion, $68.4 billion less than March imports.
emphasis added

Click on graph for larger image.

Exports increased and imports increased in April.

Exports were up 8.6% year-over-year; imports were up 3.4% year-over-year.

Imports increased sharply earlier this year as importers rushed to beat tariffs.  Exports likely increased in April as foreign importers rushed to beat retaliatory tariffs.

The second graph shows the U.S. trade deficit, with and without petroleum.

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.

Note that net, exports of petroleum products are positive and have been increasing.

The trade deficit with China decreased to $17.2 billion from $20.1 billion a year ago.