by Calculated Risk on 5/19/2024 06:14:00 PM

Weekend:
• Schedule for Week of May 19, 2024

Monday:
• At 10:30 AM ET, Speech, Fed Vice Chair Philip Jefferson, U.S. Economic Outlook and Housing Price Dynamics, At the Mortgage Bankers Association (MBA) Secondary and Capital Markets Conference, New York, N.Y.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 6 and DOW futures are up 39 (fair value).

Oil prices were up over the last week with WTI futures at $80.06 per barrel and Brent at $83.98 per barrel. A year ago, WTI was at $72, and Brent was at $75 - so WTI oil prices are up about 10% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.57 per gallon. A year ago, prices were at $3.53 per gallon, so gasoline prices are up $0.04 year-over-year.

by Calculated Risk on 5/19/2024 09:50:00 AM

For fun:

Through April 2024, the employment report indicated positive job growth for 40 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939).

Trivia: The only presidential term that saw job growth every month was President Obama's 2nd term. 

Although job growth has slowed recently, we might see job growth every month during the current term.

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2020	113
2	1990	48
3	2007	46
4	1979	45
5	20241	40
6 tie	1943	33
6 tie	1986	33
6 tie	2000	33
9	1967	29
10	1995	25
1Currrent Streak

by Calculated Risk on 5/18/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Single Family Starts Up 18% Year-over-year in March; Multi-Family Starts Down Sharply YoY

• Lawler: Early Read on Existing Home Sales in April & 3rd Look at Local Housing Markets

• Part 2: Current State of the Housing Market; Overview for mid-May 2024

• MBA: Mortgage Delinquencies Increased Slightly in Q1 2024

• 2nd Look at Local Housing Markets in April

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

by Calculated Risk on 5/18/2024 08:11:00 AM

The key reports this week are April New and Existing Home Sales.

----- Monday, May 20th -----
10:30 AM: Speech, Fed Vice Chair Philip Jefferson, U.S. Economic Outlook and Housing Price Dynamics, At the Mortgage Bankers Association (MBA) Secondary and Capital Markets Conference, New York, N.Y.

----- Tuesday, May 21st -----
No major economic releases scheduled.

----- Wednesday, May 22nd -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM: Existing Home Sales for April from the National Association of Realtors (NAR). The consensus is for 4.18 million SAAR, down from 4.19 million.

The graph shows existing home sales from 1994 through the report last month.

Housing economist Tom Lawler expects the NAR to report sales of 4.23 million SAAR.

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

2:00 PM: FOMC Minutes, Minutes Meeting of April 30-May 1, 2024

----- Thursday, May 23rd -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 220 thousand initial claims, down from 222 thousand last week.

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

10:00 AM: New Home Sales for April from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the sales rate for last month.

The consensus is for 680 thousand SAAR, down from 693 thousand SAAR in March.

11:00 AM: the Kansas City Fed manufacturing survey for May. 

----- Friday, May 24th -----
8:30 AM: Durable Goods Orders for April from the Census Bureau. The consensus is for a 0.6% decrease in durable goods orders.

10:00 AM: University of Michigan's Consumer sentiment index (Final for May). The consensus is for a reading of 67.4.

by Calculated Risk on 5/17/2024 07:13:00 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, however hospitalizations were at a pandemic low two weeks ago.

COVID Metrics
	Now	Week Ago	Goal
Deaths per Week	443	532	≤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.

Weekly deaths have declined sharply from the recent peak of 2,561 and are now below the previous pandemic low of 491 last July.

And here is a graph I'm following concerning COVID in wastewater as of May 11th:

This appears to be a leading indicator for COVID hospitalizations and deaths.

Nationally, COVID in wastewater is now off more than 90% from the holiday peak at the end of December - and also near the lows of last year - and that suggests weekly deaths will continue to decline.   However, there was a slight uptick over the last week.

by Calculated Risk on 5/17/2024 01:12:00 PM

From STR: U.S. hotel results for week ending 11 May

The U.S. hotel industry reported higher performance from the previous week and positive comparisons year over year, according to CoStar’s latest data through 11 May. ...

5-11 May 2024 (percentage change from comparable week in 2023):

• Occupancy: 66.1% (+2.1%)
• Average daily rate (ADR): US$162.14 (+4.4%)
• Revenue per available room (RevPAR): US$107.24 (+6.6%)
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 2024, black is 2020, blue is the median, and dashed light blue is for 2023.  Dashed purple is for 2018, the record year for hotel occupancy. 

The 4-week average of the occupancy rate is tracking last year, and slightly above the median rate for the period 2000 through 2023 (Blue).

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

The 4-week average of the occupancy rate will move mostly sideways seasonally until the summer travel season.

by Calculated Risk on 5/17/2024 09:43:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Lawler: Early Read on Existing Home Sales in April & 3rd Look at Local Housing Markets

A brief excerpt:

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 4.23 million in April, up 1.0% from March’s preliminary pace and up 0.2% from last April’s seasonally adjusted pace.  Unadjusted sales should show a significantly larger YOY % increase, as there were two more business days this April compared to last April.

  Local realtor/MLS reports suggest that the median existing single-family home sales price last month was up by about 6% from last April.

CR Note: The NAR is scheduled to release April existing home sales on Wednesday, May 22nd. The consensus is for 4.18 million SAAR, down from 4.19 million in March.
...
This is a year-over-year increase NSA for these markets. However, there were two more working days in April 2024 compared to April 2023, so sales Seasonally Adjusted will be lower year-over-year than Not Seasonally Adjusted sales.

If sales increased YoY in April, this will be the first YoY increase since August 2021, following 31 consecutive months with a YoY decline in sales.

There is much more in the article.

by Calculated Risk on 5/17/2024 08:23:00 AM

From BofA:

2Q US GDP tracking is down a tenth from our official forecast of 2.0% q/q saar to 1.9% q/q saar [May 17th estimate]
emphasis added

From Goldman:

We raised our Q2 GDP tracking estimate by 0.2pp to +3.2% (qoq ar) and our domestic final sales estimate by 0.1pp to +2.5%, but we lowered our past-quarter GDP tracking estimate for Q1 by 0.1pp to +1.2% (vs. +1.6% originally reported). [May 16th estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 3.6 percent on May 16, down from 3.8 percent on May 15. [May 16th estimate]

by Calculated Risk on 5/16/2024 05:07:00 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 April, Realtor.com reported inventory was up 30.4% YoY, but still down almost 36% compared to April 2017 to 2019 levels. 

 Now - on a weekly basis - inventory is up 35.0% 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 11, 2024

• Active inventory increased, with for-sale homes 35.0% above year-ago levels.

For the 27th straight week, there were more homes listed for sale versus the prior year, giving homebuyers more options. In fact, last week saw the highest number of homes for sale since August 2020, a significant milestone. Though new listing activity has softened, the recent strength in listing activity means buyers are seeing more homes for sale than they have in almost 4 years. Though buyers are seeing more options at a national level, inventory abundance varies geographically. The South leads the way in inventory growth, with a 43.0% increase in inventory annually in April, while the Northeast saw inventory increase just 4.0%.

• New listings–a measure of sellers putting homes up for sale–were up this week, by 6.6% from one year ago.

Seller activity continued to climb annually last week and accelerated relative to the previous week’s growth. However, the annual increase in new listings was lower than almost every week back to early February, signifying a slowdown in new listings growth. .

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

Inventory was up year-over-year for the 27th consecutive week.  

However, inventory is still historically very low.

New listings remain below typical pre-pandemic levels although up year-over-year.

by Calculated Risk on 5/16/2024 12:01:00 PM

Today, in the Calculated Risk Real Estate Newsletter: MBA: Mortgage Delinquencies Increased Slightly in Q1 2024

A brief excerpt:

From the MBA: Mortgage Delinquencies Increase Slightly in the First Quarter of 2024

The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 3.94 percent of all loans outstanding at the end of the first quarter of 2024, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The following graph shows the percent of loans delinquent by days past due. Overall delinquencies increased slightly in Q1. The sharp increase in 2020 in the 90-day bucket was due to loans in forbearance (included as delinquent, but not reported to the credit bureaus).

The percent of loans in the foreclosure process decreased year-over-year from 0.57 percent in Q1 2023 to 0.46 percent in Q1 2024 (red), even with the end of the foreclosure moratoriums, and remains historically low.
...
The primary concern is the increase in 30- and 60-day delinquency rates, and even though the rate is historically low, it has increased from 2.32% in Q1 2023 to 2.92% in Q1 2024. I don’t think this increase is much of a worry, but it is something to watch.

There is much more in the article.

by Calculated Risk on 5/16/2024 09:35:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Single Family Starts Up 18% Year-over-year in March; Multi-Family Starts Down Sharply YoY

A brief excerpt:

Total housing starts in April were above expectations, however, starts in February and March were revised down.

The third graph shows the month-to-month comparison for total starts between 2023 (blue) and 2024 (red).

Total starts were down 0.6% in April compared to April 2023.

The YoY decline was due to the sharp YoY decrease in multi-family starts.

by Calculated Risk on 5/16/2024 09:15:00 AM

From the Fed: Industrial Production and Capacity Utilization

Industrial production was little changed in April. Manufacturing output decreased 0.3 percent; excluding motor vehicles and parts, manufacturing output edged down 0.1 percent. The index for mining fell 0.6 percent, and the index for utilities rose 2.8 percent. At 102.8 percent of its 2017 average, total industrial production in April was 0.4 percentage point lower than its year-earlier level. Capacity utilization moved down to 78.4 percent in April, a rate that is 1.2 percentage points below its long-run (1972–2023) 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 above the level in February 2020 (pre-pandemic).

Capacity utilization at 78.4% is 1.2% below the average from 1972 to 2022.  This was at 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 was unchanged at 102.8. This is above the pre-pandemic level.

Industrial production was below consensus expectations.

by Calculated Risk on 5/16/2024 08:32:00 AM

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately‐owned housing starts in April were at a seasonally adjusted annual rate of 1,360,000. This is 5.7 percent above the revised March estimate of 1,287,000, but is 0.6 percent below the April 2023 rate of 1,368,000. Single‐family housing starts in April were at a rate of 1,031,000; this is 0.4 percent below the revised March figure of 1,035,000. The April rate for units in buildings with five units or more was 322,000.

Building Permits:
Privately‐owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,440,000. This is 3.0 percent below the revised March rate of 1,485,000 and is 2.0 percent below the April 2023 rate of 1,470,000. Single‐family authorizations in April were at a rate of 976,000; this is 0.8 percent below the revised March figure of 984,000. Authorizations of units in buildings with five units or more were at a rate of 408,000 in April.
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) increased in April compared to March.   Multi-family starts were down 33.1% year-over-year.

Single-family starts (red) decreased slightly in April and were up 17.7% 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 April were above expectations, however, starts in February and March were revised down.

I'll have more later …

by Calculated Risk on 5/16/2024 08:30:00 AM

The DOL reported:

In the week ending May 11, the advance figure for seasonally adjusted initial claims was 222,000, a decrease of 10,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 231,000 to 232,000. The 4-week moving average was 217,750, an increase of 2,500 from the previous week's revised average. The previous week's average was revised up by 250 from 215,000 to 215,250.
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 increased to 217,750.

The previous week was revised up.

Weekly claims were at the consensus forecast.

by Calculated Risk on 5/15/2024 07:01:00 PM

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

Thursday:
• At 8:30 AM ET, Housing Starts for April. The consensus is for 1.410 million SAAR, up from 1.321 million SAAR in March.

• Also at 8:30 AM, The initial weekly unemployment claims report will be released.  The consensus is for 222 thousand initial claims, down from 231 thousand last week.

• Also at 8:30 AM, the Philly Fed manufacturing survey for May. The consensus is for a reading of 8.0, down from 15.5.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for April. The consensus is for a 0.2% increase in Industrial Production, and for Capacity Utilization to be unchanged at 78.4%.

by Calculated Risk on 5/15/2024 11:58:00 AM

The Cleveland Fed released the median CPI and the trimmed-mean CPI.

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% in April. The 16% trimmed-mean Consumer Price Index increased 0.3%. "The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report".

Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. 

On a year-over-year basis, the median CPI rose 4.5% (down from 4.6% in March), the trimmed-mean CPI rose 3.5% (down from 3.6%), and the CPI less food and energy rose 3.6% (down from 3.8%). 

Core PCE is for March was up 2.8% YoY, down slightly from 2.8% in February.

Note: The Cleveland Fed released the median CPI details. Rent and Owner's equivalent rent are still very high, and if we exclude rent, median CPI would be around 2% year-over-year. 

by Calculated Risk on 5/15/2024 10:00:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 45, down from 51 last month. Any number below 50 indicates that more builders view sales conditions as poor than good.

From the NAHB: Higher Mortgage Rates Hammer Builder Confidence in May

With mortgage rates averaging above 7% for the past four weeks per data from Freddie Mac, builder sentiment posted its first decline since November 2023.

Builder confidence in the market for newly built single-family homes was 45 in May, down six points from April, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today.

“The market has slowed down since mortgage rates increased and this has pushed many potential buyers back to the sidelines,” said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan. “We are also concerned about the recent codes rules that require HUD and USDA to insure mortgages for new single-family homes only if they are built to the 2021 International Energy Conservation Code. This will further increase the cost of construction in a market that sorely needs more inventory for first-time and first-generation buyers.”

“A lack of progress on reducing inflation pushed long-term interest rates higher in the first quarter and this is acting as a drag on builder sentiment,” said NAHB Chief Economist Robert Dietz. “The last leg in the inflation fight is to reduce shelter inflation, and this can only occur if builders are able to construct more attainable, affordable housing.”

The May HMI survey also revealed that 25% of builders cut home prices to bolster sales in May, ending four months of consecutive declines in this metric. However, the average price reduction in May held steady at 6% for the 11th straight month. Meanwhile, the use of sales incentives ticked up to 59% in May from a reading of 57% in April.
...
All three HMI component indices posted declines in May. The HMI index charting current sales conditions in May fell six points to 51, the component measuring sales expectations in the next six months fell nine points to 51 and the gauge charting traffic of prospective buyers declined four points to 30.

Looking at the three-month moving averages for regional HMI scores, the Midwest increased three points to 49, the Northeast fell two points to 61, the South dropped two points to 49 and the West posted a four-point decline to 43.
emphasis added

Click on graph for larger image.

This graph shows the NAHB index since Jan 1985.

This was below the consensus forecast.

by Calculated Risk on 5/15/2024 09:02:00 AM

Here are a few measures of inflation:

The first graph is the one Fed Chair Powell had mentioned when services less rent of shelter was up around 8% year-over-year.  This declined, but has turned up recently, and is now up 4.9% YoY.

Click on graph for larger image.

This graph shows the YoY price change for Services and Services less rent of shelter through April2024.

Services were up 5.2% YoY as of April 2024, down from 5.3% YoY in March.

Services less rent of shelter was up 4.9% YoY in April, up from 4.8% YoY in March.

The second graph shows that goods prices started to increase year-over-year (YoY) in 2020 and accelerated in 2021 due to both strong demand and supply chain disruptions.

Durables were at -3.2% YoY as of April 2024, down from -2.1% YoY in March.

Commodities less food and energy commodities were at -1.2% YoY in April, down from -0.7% YoY in March.

Here is a graph of the year-over-year change in shelter from the CPI report (through April) and housing from the PCE report (through March)

Shelter was up 5.5% year-over-year in April, down from 5.6% in March. Housing (PCE) was up 5.79% YoY in March, down slightly from 5.85% in February.

This is still catching up with private data.  The BLS noted this morning: "The index for shelter rose in April, as did the index for gasoline. Combined, these two indexes contributed over seventy percent of the monthly increase in the index for all items."

Core CPI ex-shelter was up 2.1% YoY in April, down from 2.4% in March.

by Calculated Risk on 5/15/2024 08:41:00 AM

On a monthly basis, retail sales were "virtually unchanged" from March to April (seasonally adjusted), and sales were up 3.0 percent from April 2023.

From the Census Bureau report:

Advance estimates of U.S. retail and food services sales for April 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $705.2 billion, virtually unchanged from the previous month, but up 3.0 percent above April 2023. ... The February 2024 to March 2024 percent change was revised from up 0.7 percent to up 0.6 percent (±0.1 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 were down 0.2% in April.

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 3.0% on a YoY basis.

The change in sales in April was below expectations, and, sales in February and March were revised down.

by Calculated Risk on 5/15/2024 08:30:00 AM

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis, after rising 0.4 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.4 percent before seasonal adjustment.

The index for shelter rose in April, as did the index for gasoline. Combined, these two indexes contributed over seventy percent of the monthly increase in the index for all items. The energy index rose 1.1 percent over the month. The food index was unchanged in April. The food at home index declined 0.2 percent, while the food away from home index rose 0.3 percent over the month.

The index for all items less food and energy rose 0.3 percent in April, after rising 0.4 percent in each of the 3 preceding months. Indexes which increased in April include shelter, motor vehicle insurance, medical care, apparel, and personal care. The indexes for used cars and trucks, household furnishings and operations, and new vehicles were among those that decreased over the month.

The all items index rose 3.4 percent for the 12 months ending April, a smaller increase than the 3.5-percent increase for the 12 months ending March. The all items less food and energy index rose 3.6 percent over the last 12 months. The energy index increased 2.6 percent for the 12 months ending April. The food index increased 2.2 percent over the last year.
emphasis added

The change in both CPI and core CPI were at expectations. I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.