by Calculated Risk on 7/23/2024 02:29:00 PM

From WardsAuto: July U.S. Light-Vehicle Sales Tracking to Strongest SAAR So Far in 2024 (pay content).  Brief excerpt:

An expected boost to volume in July from lost sales in June, caused by a cyberattack affecting dealer management systems, will not be as big as initially expected. Dealers apparently were quite adept at finding alternative ways to reporting sales and lost volume was less than thought. Still, July’s forecast SAAR of 16.1 million units is the highest for any month this year and inventory will enter August at a five-year high for the period.
emphasis added

Click on graph for larger image.

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

On a seasonally adjusted annual rate basis, the Wards forecast of 16.1 million SAAR, would be up 5.3% from last month, and up 1.0% from a year ago.

by Calculated Risk on 7/23/2024 10:53:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: NAR: Existing-Home Sales Decreased to 3.89 million SAAR in June

Excerpt:

Sales Year-over-Year and Not Seasonally Adjusted (NSA)

The fourth graph shows existing home sales by month for 2023 and 2024.

Sales declined 5.4% year-over-year compared to June 2023. This was the thirty-fourth consecutive month with sales down year-over-year.

There is much more in the article.

by Calculated Risk on 7/23/2024 10:00:00 AM

From the NAR: Existing-Home Sales Slipped 5.4% in June; Median Sales Price Jumps to Record High of $426,900

Existing-home sales fell in June as the median sales price climbed to the highest price ever recorded for the second consecutive month, according to the National Association of REALTORS®. All four major U.S. regions posted sales declines. Year-over-year, sales waned in the Northeast, Midwest and South but were unchanged in the West.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – receded 5.4% from May to a seasonally adjusted annual rate of 3.89 million in June. Year-over-year, sales also dropped 5.4% (down from 4.11 million in June 2023).
...
Total housing inventory registered at the end of June was 1.32 million units, up 3.1% from May and 23.4% from one year ago (1.07 million). Unsold inventory sits at a 4.1-month supply at the current sales pace, up from 3.7 months in May and 3.1 months in June 2023. The last time unsold inventory posted a four-month supply was May 2020 (4.5 months).
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 June (3.89 million SAAR) were down 5.4% from the previous month and were 5.4% below the June 2023 sales rate.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 1.32 million in June from 1.28 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 23.4% year-over-year (blue) in June compared to June 2023.

Months of supply (red) increased to 4.1 months in June from 3.7 months the previous month.

The sales rate was lower than the consensus forecast.  I'll have more later. 

by Calculated Risk on 7/22/2024 04:38:00 PM

From the MBA: Share of Mortgage Loans in Forbearance Increases to 0.23% in June

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance increased to 0.23% as of June 30, 2024. According to MBA’s estimate, 115,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 8.2 million borrowers since March 2020.

The share of Fannie Mae and Freddie Mac loans in forbearance increased 1 basis point to 0.11% in June 2024. Ginnie Mae loans in forbearance increased by 5 basis points to 0.44%, and the forbearance share for portfolio loans and private-label securities (PLS) stayed flat at 0.31%.

“The number of loans in forbearance increased in June for the first time since October of 2022,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Furthermore, the performance of both loan workouts and overall servicing portfolios weakened, particularly for government loans.”

Added Walsh, “There were several factors that impacted homeowners, including the uptick of severe weather events that hit multiple regions of the country as well as early signs of consumer distress that could potentially impact borrowers’ ability to pay their mortgages. Additionally, June’s month-end fell on a Sunday, and the weekend timing typically leads to higher mortgage defaults in any given month.”
emphasis added

At the end of June, there were about 115,000 homeowners in forbearance plans.

by Calculated Risk on 7/22/2024 03:21:00 PM

From ICE: ICE First Look at Mortgage Performance: June Sees Calendar-Driven Spike in Delinquencies; Foreclosures Remain Historically Low

• Coming off a near-record low in May and with June ending on a Sunday, the national delinquency rate jumped +14.5% (+45 basis points) to 3.49%, its second highest level in 18 months

• Sunday month-ends often lead to sharp, but typically temporary, spikes in delinquent mortgages, as payments made on the last day of a given month are not processed until the following month

• As such, June saw a +19.6% increase in the number of borrowers a single payment past due – the highest inflow since May 2020 – while 60-day delinquencies rose 11.8% to a five-month high

• Though up 5.1% from May, serious delinquencies (loans 90+ days past due but not in active foreclosure) were still down 8.5% year over year and 10.1% below pre-pandemic levels

• Foreclosure starts declined 6.2% in June – pushing active foreclosure inventory to its lowest point since the end of COVID-era moratoriums, now 34% below pre-pandemic levels

• 5.3K foreclosure sales were completed nationally in June, representing a -14.9% month-over-month decrease to their lowest level since February 2022, still well below pre-pandemic norms

• Prepayments eased -7.6% from May, breaking a six-month streak of increasing prepay activity as we near the typical seasonal peak of home sales, and affordability and rate constraints persist
emphasis added

Click on graph for larger image.

Here is a table from ICE.

by Calculated Risk on 7/22/2024 11:20:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: NMHC: "Apartment Market Conditions Continue to Loosen"

Excerpt:

From the NMHC: From the NMHC: Apartment Market Conditions Continue to Loosen, Though Deal Flow Increased for the Second Straight Quarter Amidst More Favorable Conditions for Debt Financing

Apartment market conditions came in mixed in the National Multifamily Housing Council’s (NMHC’s) Quarterly Survey of Apartment Market Conditions for July 2024. While the Debt Financing (63) and Sales Volume (57) indexes indicated more favorable conditions this quarter, Equity Financing (49) and Market Tightness (47) came in below the breakeven level (50).
...
“Concessions have become commonplace in markets with elevated levels of deliveries, as survey respondents reported overall looser market conditions for the eighth consecutive quarter,” noted NMHC Economist and Senior Director of Research, Chris Bruen.
...

• The Market Tightness Index came in at 47 this quarter – below the breakeven level of 50 – indicating looser market conditions for the eighth consecutive quarter. Half of respondents, though, thought market conditions were unchanged compared to three months ago while 27% thought markets have become looser, down from 37% in April. Twenty-two percent of respondents reported tighter markets than three months ago.

The quarterly index increased to 47 in July from 41 in April. Any reading below 50 indicates looser conditions from the previous quarter.

This index has been an excellent leading indicator for rents and vacancy rates, and this suggests higher vacancy rates and a further weakness in asking rents. This is the eighth consecutive quarter with looser conditions than the previous quarter.

There is much more in the article.

by Calculated Risk on 7/22/2024 08:11:00 AM

Altos reports that active single-family inventory was up 2.6% week-over-week. Inventory is now up 35.3% from the February seasonal bottom.

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of July 19th, inventory was at 668 thousand (7-day average), compared to 651 thousand the prior week.   

Inventory is still far below pre-pandemic levels. 

The second graph shows the seasonal pattern for active single-family inventory since 2015.

The red line is for 2024.  The black line is for 2019.  Note that inventory is up 75% from the record low for the same week in 2021, but still well below normal levels.

Inventory was up 39.1% compared to the same week in 2023 (last week it was up 38.1%), and down 30.3% compared to the same week in 2019 (last week it was down 31.5%). 

Inventory is now above 2020 levels for the same week.

Back in June 2023, inventory was down almost 54% compared to 2019, so the gap to more normal inventory levels is slowly closing.

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 7/21/2024 06:41:00 PM

Weekend:
• Schedule for Week of July 21, 2024

Monday:
• At 8:30 AM ET, Chicago Fed National Activity Index for June. This is a composite index of other data.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 12 and DOW futures are up 36 (fair value).

Oil prices were lower over the last week with WTI futures at $80.13 per barrel and Brent at $82.63 per barrel. A year ago, WTI was at $77, and Brent was at $81 - so WTI oil prices are up about 5% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.46 per gallon. A year ago, prices were at $3.56 per gallon, so gasoline prices are down $0.10 year-over-year.

by Calculated Risk on 7/21/2024 10:16:00 AM

For house prices, probably the key number in the existing home sales report on Tuesday will be months-of-supply.

It is likely month-of-supply will be close to 4 months in the June report, the highest level since the start of the pandemic. In June 2019, months-of-supply peaked for the year at 4.3 months.

As I mentioned in a recent interview with Lance Lambert at ResiClub:

"I expect this measure to continue to increase, and be over 4 months soon – and to be above 2019 levels in a few months. This doesn’t mean national price declines, but it suggests price growth will slow significantly later this year. We might see national price decline with months-of-supply above 5 (as opposed to 6) since most potential sellers have substantial equity and might be willing to sell for a little less."

by Calculated Risk on 7/20/2024 02:21:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Single Family Starts Up Year-over-year in June; Multi-Family Starts Down 23% YoY

• Lawler: Early Read on Existing Home Sales in June

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

• California Home Sales Down 3% SA YoY in June; 4th Look at Local Housing Markets in June

• 3rd Look at Local Housing Markets in June

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

by Calculated Risk on 7/20/2024 09:32:00 AM

The key report this week is the advance estimate of Q2 GDP.

Other key reports include June Existing Home Sales, New Home Sales, and Personal Income and Outlays.

For manufacturing, the July Richmond and Kansas City Fed manufacturing surveys will be released.

----- Monday, July 22nd -----
8:30 AM ET: Chicago Fed National Activity Index for June. This is a composite index of other data.

----- Tuesday, July 23rd -----
10:00 AM: Existing Home Sales for June from the National Association of Realtors (NAR). The consensus is for 4.00 million SAAR, down from 4.11 million last month.

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

Housing economist Tom Lawler expects the NAR to report sales of 3.93 million SAAR for June.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for July.

----- Wednesday, July 24th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM: New Home Sales for June 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 640 thousand SAAR, up from 619 thousand in May.

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

----- Thursday, July 25th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 238 thousand initial claims, down from 243 thousand last week.

8:30 AM: Gross Domestic Product, 2nd quarter (advance estimate), and annual update. The consensus is that real GDP increased 1.8% annualized in Q2, up from 1.4% in Q1.

8:30 AM: Durable Goods Orders for June from the Census Bureau. The consensus is for a 0.5% increase in durable goods orders.

11:00 AM: Kansas City Fed Survey of Manufacturing Activity for July.

----- Friday, July 26th -----
8:30 AM ET: Personal Income and Outlays, June 2024. The consensus is for a 0.4% increase in personal income, and for a 0.2% increase in personal spending. And for the Core PCE price index to increase 0.2%.  PCE prices are expected to be up 2.6% YoY, and core PCE prices up 2.6% YoY.

10:00 AM: University of Michigan's Consumer sentiment index (Final for July). The consensus is for a reading of 66.0.

by Calculated Risk on 7/19/2024 07:01:00 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🚩	385	342	≤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.

Although weekly deaths met the original goal to stop posting, I'm going to continue to post now that deaths are increasing again.  

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

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

COVID in wastewater is increasing - especially in the West and South - and unfortunately this suggests weekly deaths will increase further. 

by Calculated Risk on 7/19/2024 12:13:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Lawler: Early Read on Existing Home Sales in June

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 3.93 million in June, down 4.4%  from May’s preliminary pace and down 4.4% from last June’s seasonally adjusted pace.

Unadjusted sales should show a materially larger YOY % decline, reflecting this June’s two fewer business days compared to last June.

There is much more in the article.

by Calculated Risk on 7/19/2024 09:58:00 AM

Today, in the Calculated Risk Real Estate Newsletter: California Home Sales Down 3% SA YoY in June; 4th Look at Local Housing Markets in June

A brief excerpt:

The National Association of Realtors (NAR) is scheduled to release June Existing Home Sales on Tuesday July 23rd at 10 AM ET. The early consensus is for 4.00 million SAAR, down from 4.11 million in May, and down from 4.11 million in June 2023.
...
In June, sales in these markets were down 12.7% YoY. Last month, in May, these same markets were down 0.6% year-over-year Not Seasonally Adjusted (NSA).
...
This is a year-over-year decrease NSA for these early reporting markets. However, there were two fewer working days in June 2024 compared to June 2023 (19 vs 21), so seasonally adjusted sales will be much higher than the NSA data suggests.
...
More local markets to come!

There is much more in the article.

by Calculated Risk on 7/19/2024 07:59:00 AM

The advance estimate of 2nd quarter GDP will be released next week.

From BofA:

Our 2Q GDP tracking estimate is up two-tenths to 2.4% q/q saar since our last publication, largely due to higher-than-expected industrial production (IP) and housing starts and permits [July 18th estimate]
emphasis added

From Goldman:

We boosted our Q2 GDP tracking estimate by 0.3pp to +2.6% (qoq ar) and our Q2 domestic final sales forecast by 0.1pp to 2.2%. [July 17th 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 2.7 percent on July 17, up from 2.5 percent on July 16. After this morning's housing starts report from the US Census Bureau and industrial production report from the Federal Reserve Board of Governors, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth increased from 2.1 percent and 7.7 percent, respectively, to 2.2 percent and 8.9 percent. [July 17th estimate]

by Calculated Risk on 7/18/2024 03:54:00 PM

From STR: U.S. hotel results for week ending 13 July

The U.S. hotel industry reported higher performance results than the previous week but lower comparisons year over year, according to CoStar’s latest data through 13 July. ...

7-13 July 2024 (percentage change from comparable week in 2023):

• Occupancy: 69.2% (-3.7%)
• Average daily rate (ADR): US$158.21 (-1.5%)
• Revenue per available room (RevPAR): US$109.51 (-5.2%)
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, 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 just behind last year and is below 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 increase seasonally due to summer recreational travel.  So far, the summer leisure travel season has disappointed.

by Calculated Risk on 7/18/2024 01:41:00 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 June, Realtor.com reported inventory was up 36.7% YoY, but still down 32.4% compared to April 2017 to 2019 levels. 

 Now - on a weekly basis - inventory is up 35.8% 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 July 13, 2024

• Active inventory increased, with for-sale homes 35.8% above year-ago levels.

For the 36th week in a row, the number of for-sale homes grew compared with one year ago. This past week, the inventory of homes for sale grew by 35.8% compared with last year, slightly higher than the rate observed in the previous week. Despite nearly 8 months of building inventory, buyers still see more than 30% fewer homes for sale compared with pre-pandemic.

• New listings–a measure of sellers putting homes up for sale–were up this week by 8.8% from one year ago.

This week marks 14 out of the past 15 weeks with new listings growth and at 8.8% year-over-year it is slightly above the 2024 weekly average of 8.7%. However, the share of active listings comprising new listings fell from the same last year by just under a percentage point. While newly listed homes increased by 6.3% annually in June, this rate is roughly half of what it was two months ago. Broadly speaking, the number of new homes for sale remains historically low and is still below the 2017-2022 levels, even with recent improvements.

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

Inventory was up year-over-year for the 36th consecutive week.  

However, inventory is still historically low.

New listings remain below typical pre-pandemic levels.

by Calculated Risk on 7/18/2024 11:15:00 AM

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12-month average.

Click on graph for larger image.

On a rolling 12-month basis, inbound traffic increased 1.7% in June compared to the rolling 12 months ending in May.   Outbound traffic increased 0.7% compared to the rolling 12 months ending the previous month.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in the Winter depending on the timing of the Chinese New Year.  

Imports were up 20% YoY in June, and exports were up 9% YoY.    

In general, it appears port traffic is returning to the pre-pandemic patterns.

by Calculated Risk on 7/18/2024 08:30:00 AM

The DOL reported:

In the week ending July 13, the advance figure for seasonally adjusted initial claims was 243,000, an increase of 20,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 222,000 to 223,000. The 4-week moving average was 234,750, an increase of 1,000 from the previous week's revised average. The previous week's average was revised up by 250 from 233,500 to 233,750.
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 234,750.

The previous week was revised up.

Weekly claims were higher than the consensus forecast.

by Calculated Risk on 7/17/2024 07:31:00 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 228 thousand initial claims, up from 222 thousand last week.

• Also at 8:30 AM, the Philly Fed manufacturing survey for July. The consensus is for a reading of 2.9, up from 1.0.