by Calculated Risk on 11/14/2014 08:43:00 AM

On a monthly basis, retail sales decreased 0.3% from September to October (seasonally adjusted), and sales were up 4.1% from October 2013. Sales in September were unrevised at a 0.3% decrease.

From the Census Bureau report:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for October, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $444.5 billion, an increase of 0.3 percent from the previous month, and 4.1 percent above October 2013. ... The August to September 2014 percent change was unrevised from -0.3%.

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 increase 0.5%.

Retail sales ex-autos increased 0.3%. 

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail sales ex-gasoline increased by 5.1% on a YoY basis (4.1% for all retail sales).

The increase in October was above consensus expectations of a 0.2% increase.

Overall this was a solid report.

by Calculated Risk on 11/13/2014 07:01:00 PM

One of the keys in the retail sales report will be sales ex-gasoline. From the WSJ: On Your Shopping List: Three Things to Watch in the Retail Sales Report

[C]onsider retail performance excluding gasoline stations. Retail sales are reported nominally and gas prices have plummeted since June. That means a clearer picture of the consumer sector will come from looking at retail sales excluding gas stations.

There are two reasons for that. The first is obvious: If gas sales are falling, sales excluding gas are doing better than total sales.

The second reason is that cheaper gas frees up money that can be spent elsewhere. If nongas sales don’t post a solid gain in October, consumers may be saving that extra money.

Friday:
• At 8:30 AM ET, Retail sales for October will be released. The consensus is for retail sales to increase 0.2% in October, and to increase 0.2% ex-autos.

• At 9:55 AM, the Reuter's/University of Michigan's Consumer sentiment index (preliminary for November). The consensus is for a reading of 87.5, up from 86.9 in October.

• At 10:00 AM, the Mortgage Bankers Association (MBA) Q3 2014 National Delinquency Survey (NDS).

• Also at 10:00 AM, the Manufacturing and Trade: Inventories and Sales (business inventories) report for September. The consensus is for a 0.3% increase in inventories.

by Calculated Risk on 11/13/2014 05:03:00 PM

From Freddie Mac: Fixed Mortgage Rates Hovering Near 2014 Lows

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates little changed from the previous week with the 30-year mortgage still hovering around 4 percent.

30-year fixed-rate mortgage (FRM) averaged 4.01 percent with an average 0.5 point for the week ending November 13, 2014, down from last week when it averaged 4.02 percent. A year ago at this time, the 30-year FRM averaged 4.35 percent.

Click on graph for larger image.

Here is a graph of 30 year fixed mortgage rates - according to the PMMS® - for 2010 through 2014 (red).

Mortgage rates are lower this year than last year (blue), and at about the same level as in 2011.

Note: Looking at daily rates from Mortgage News Daily, 30 year rates are at 4.05% today, down from 4.46% one year ago. The MND data is based on actual lender rate sheets, and is mostly "the average no-point, no-origination rate for top-tier borrowers with flawless scenarios". (this tracks the Freddie Mac series very well).

by Calculated Risk on 11/13/2014 02:14:00 PM

From DataQuick: San Francisco Bay Area Home Sales Edge Higher; Price Growth Ratchets Down Again

The Bay Area housing market posted another modest uptick in sales during October but activity remained below average as cash purchases continued to taper off and buyers faced a limited inventory as well as affordability and mortgage availability challenges. Home prices appear to have plateaued in recent months, although the October median sale price was still about 11 percent higher than a year earlier.

A total of 7,693 new and resale houses and condos sold in the nine-county San Francisco Bay Area in October 2014. That was up 3.4 percent from 7,443 in September and up 1.3 percent from 7,595 in October 2013, according to CoreLogic DataQuick data..

A small gain in sales from September to October is normal for the season. The October sales count was the highest for that month since 7,902 homes sold in October 2012. October sales have ranged from a low of 5,486 in 2007 to a high of 13,392 in 2003. October 2014 sales were 9.7 percent below the October average of 8,521 sales since 1988, when CoreLogic DataQuick’s data began.
...
“After hitting what many view as a stratospheric level, Bay Area home prices have shown signs of leveling off,” said Andrew LePage, data analyst for CoreLogic DataQuick. “To some extent it’s the result of sticker shock and a modest pickup in inventory."
...
Foreclosure resales accounted for 2.7 percent of resales in October, down from a revised 2.8 percent the month before, and down from 3.7 percent a year ago. Foreclosure resales in the Bay Area peaked at 52.0 percent in February 2009, while the monthly average since 1995 is 9.7 percent. Foreclosure resales are homes that had been foreclosed on in the prior 12 months.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 3.5 percent of Bay Area resales in October. That was down from an estimated 3.8 percent in September and down from 7.3 percent in October 2013.
emphasis added

A few key year-over-year trends: 1) declining distressed sales (can't decline much further!), 2) generally declining investor buying, 3) mostly flat total sales (up 1.3% year-over-year in October), 4) an increase in non-distressed sales.

by Calculated Risk on 11/13/2014 12:27:00 PM

From HotelNewsNow.com: STR: US results for week ending 8 November

The U.S. hotel industry recorded positive results in the three key performance measurements during the week of 2-8 November 2014, according to data from STR, Inc.

In year-over-year measurements, the industry’s occupancy rose 3.5 percent to 66.2 percent. Average daily rate increased 5.4 percent to finish the week at US$117.48. Revenue per available room for the week was up 9.1 percent to finish at US$77.74.
emphasis added

Note: ADR: Average Daily Rate, RevPAR: Revenue per Available Room.

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

Business travel has peaked for the Fall season, and now hotels are heading into the slow period.

Click on graph for larger image.

The red line is for 2014, blue is the median, and black is for 2009 - the worst year since the Great Depression for hotels.  Purple is for 2000.

The 4-week average of the occupancy rate is solidly above the median for 2000-2007, and since mid-June, the 4-week average of the occupancy rate has been a little higher than for the same week in 2000.

Right now it looks like 2014 will be the best year since 2000 for hotels.  And since it takes some time to plan and build hotels, I expect 2015 will be even better for hotel occupancy.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com