by Calculated Risk on 11/16/2020 04:00:00 PM

Note: This is as of November 8th.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 5.47%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased for the 11th week in a row from 5.67% of servicers’ portfolio volume in the prior week to 5.47% as of November 8, 2020 – a 20-basis-point improvement. According to MBA’s estimate, 2.7 million homeowners are in forbearance plans.
...
“Declines in the share of loans in forbearance continued this week, with a significant increase in the rate of forbearance exits – particularly for portfolio and PLS loans,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “More than 76 percent of borrowers in forbearance are now in an extension, as we are well past the six-month point for most borrowers’ forbearance plans.”

Added Fratantoni, “While the rate of new forbearance requests has declined and exits are increasing, homeowners who continue to be impacted by hardships related to the pandemic should contact their servicer for relief.”
...
By stage, 21.68% of total loans in forbearance are in the initial forbearance plan stage, while 76.46% are in a forbearance extension. The remaining 1.86% are forbearance re-entries.
emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.  Most of the increase was in late March and early April, and has been trending down for the last few months.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.10% to 0.08%."

There wsan't a pickup in forbearance activity related to the end of the extra unemployment benefits.

by Calculated Risk on 11/16/2020 01:22:00 PM

The headline unemployment rate has fallen to 6.9%, but that significantly understates the current situation.  Note that the headline unemployment rate was 3.5% at the end of 2019.

Here is a table that shows the current number of unemployed and the unemployment rate. Then I calculated the unemployment rate by including the number of people that have left the labor force since February, and the expected growth in the labor force.

As the economy recovers, many of the people that left the labor force will probably return, and there will be more entrants into the labor force.   This will keep the unemployment rate elevated for some time, and suggests the need for more disaster relief.

	Number (000s)	Unemployment Rate
Unemployed	11,061	6.9%
Left Labor Force	3,679	9.0%
Expected Labor Force Growth	938	9.5%

This is just the headline unemployment rate. There are 2.3 million additional involuntary part time workers than a year ago (these workers are included in U-6).

Note: I'd be careful looking at the weekly initial claims report in addition to the BLS report. The weekly claims report suggests there are millions of workers receiving pandemic assistance, but this should be captured in the BLS household surveys (so I wouldn't add the numbers together).

by Calculated Risk on 11/16/2020 09:07:00 AM

From the NY Fed: Empire State Manufacturing Survey

Manufacturing activity in New York State expanded only to a small degree in November. After falling seven points last month, the general business conditions index fell four points to 6.3 this month, indicating that growth continued to slow.
...
The index for number of employees rose two points to 9.4, its highest level in nearly a year, indicating a modest increase in employment levels. After rising sharply last month, the average workweek index fell eleven points to 4.8, its positive value signaling a small increase in hours worked.
emphasis added

This was well below expectations, and showed activity "expanded slightly" in November.

by Calculated Risk on 11/16/2020 08:24:00 AM

These indicators are mostly for travel and entertainment.    It will interesting to watch these sectors recover as the vaccine is distributed.   

IMPORTANT: Be safe now - if all goes well, we could all be vaccinated by Q2 2021.

----- Airlines: Transportation Security Administration -----
The TSA is providing daily travel numbers.

Click on graph for larger image.

This data shows the seven day average of daily total traveler throughput from the TSA for 2019 (Blue) and 2020 (Red).

The dashed line is the percent of last year for the seven day average.

This data is as of Nov 15th.

The seven day average is down 65% from last year (35% of last year).

There has been a slow increase from the bottom, but has been weak lately.

----- Restaurants: OpenTable -----
The second graph shows the 7 day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities.

Thanks to OpenTable for providing this restaurant data:

This data is updated through November 14, 2020.

This data is "a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. For year-over-year comparisons by day, we compare to the same day of the week from the same week in the previous year."

Note that this data is for "only the restaurants that have chosen to reopen in a given market". Since some restaurants have not reopened, the actual year-over-year decline is worse than shown.

Note that dining is generally lower in the northern states - Illinois, Pennsylvania, and New York - and only down slightly in the southern states.

----- Movie Tickets: Box Office Mojo -----
This data shows domestic box office for each week (red) and the maximum and minimum for the previous four years.  Data is from BoxOfficeMojo through November 12th.

Note that the data is usually noisy week-to-week and depends on when blockbusters are released.

Movie ticket sales have picked up slightly over the last couple of months, and were at $13 million last week (compared to usually around $200 million per week in the Fall).

Some movie theaters have reopened (probably with limited seating).
----- Hotel Occupancy: STR -----
This graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

The red line is for 2020, dash light blue is 2019, blue is the median, and black is for 2009 (the worst year since the Great Depression for hotels - prior to 2020).

This data is through November 7th. Hotel occupancy is currently down 35.9% year-over-year.

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

Since there is a seasonal pattern to the occupancy rate, we can track the year-over-year change in occupancy to look for any improvement. This table shows the year-over-year change since the week ending Sept 19, 2020:

Week Ending	YoY Change, Occupancy Rate
9/19	-31.9%
9/26	-31.5%
10/3	-29.6%
10/10	-29.2%
10/17	-30.7%
10/24	-31.7%
10/31	-29.0%
11/7	-35.9%

This suggests no improvement over the last 8 weeks, and occupancy might be getting worse.

----- Gasoline Supplied: Energy Information Administration -----
This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week last year of .

At one point, gasoline supplied was off almost 50% YoY.

As of November 6th, gasoline supplied was off about 6.0% YoY (about 94.0% of last year).

Note: People driving instead of flying might have boosted gasoline consumption.

----- Transit: Apple Mobility -----
This graph is from Apple mobility. From Apple: "This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities." This is just a general guide - people that regularly commute probably don't ask for directions.

There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index. However the index is set "relative to its weekday-specific average over January–February", and is not seasonally adjusted, so we can't tell if an increase in mobility is due to recovery or just the normal increase in the Spring and Summer.

This data is through November 14th for the United States and several selected cities.

The graph is the running 7 day average to remove the impact of weekends.

IMPORTANT: All data is relative to January 13, 2020. This data is NOT Seasonally Adjusted. People walk and drive more when the weather is nice, so I'm just using the transit data.

According to the Apple data directions requests, public transit in the 7 day average for the US is at 51% of the January level. It is at 40% in Chicago, and 55% in Houston - and declining slightly recently.

----- Office Building Occupancy -----
Note: This graph is from Kastle, and the data isn't available online to do a 7-day average. Here is some interesting data from Kastle Systems on office occupancy.

This data is through November 8th.

Currently Office Occupancy appears to be stalling with the 10-city average down to 25.1% from 27.1% the previous week.

"View the average occupancy rate of commercial properties across 10 major U.S. cities, by each municipality and in aggregate, to show the pace of Americans returning to work based on daily unique access entries in Kastle-secured buildings across the nation."

----- New York City Subway Usage -----
Here is some interesting data on New York subway usage (HT BR).

This graph is from Todd W Schneider. This is daily data for this year.

This data is through Friday, November 13th.

Schneider has graphs for each borough, and links to all the data sources.

He notes: "Data updates weekly from the MTA’s public turnstile data, usually on Saturday mornings".

by Calculated Risk on 11/15/2020 09:59:00 PM

Weekend:
• Schedule for Week of November 15, 2020

Monday:
• At 8:30 AM ET, The New York Fed Empire State manufacturing survey for November. The consensus is for a reading of 13.8, up from 10.5.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 23 and DOW futures are up 179 (fair value).

Oil prices were up over the last week with WTI futures at $40.47 per barrel and Brent at $43.04 barrel. A year ago, WTI was at $57, and Brent was at $62 - so WTI oil prices are down over 30% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.12 per gallon. A year ago prices were at $2.61 per gallon, so gasoline prices are down $0.49 per gallon year-over-year.

by Calculated Risk on 11/15/2020 08:07:00 PM

The end of the pandemic is coming, possibly by Q2 2021! Please be careful, especially over the holidays. Thanksgiving, Christmas and New Years will be tough this year, but keep your guard up - plan now to have safe holidays.

The US is now averaging over 1 million tests per day. Based on the experience of other countries, for adequate test-and-trace (and isolation) to reduce infections, the percent positive needs to be well under 5% (probably close to 1%), so the US still needs to increase the number of tests per day significantly (or take actions to push down the number of new infections).

There were 1,169,428 test results reported over the last 24 hours.

There were 139,109 positive tests.  Highest for a Sunday.

Over 15,000 US deaths have been reported so far in November. See the graph on US Daily Deaths here.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 11.9% (red line is 7 day average).  The percent positive is calculated by dividing positive results by the sum of negative and positive results (I don't include pending).

And check out COVID Exit Strategy to see how each state is doing.

The second graph shows the 7 day average of positive tests reported and daily hospitalizations.

The dashed line is the previous hospitalization maximum.

Note that there were very few tests available in March and April, and many cases were missed, so the hospitalizations was higher relative to the 7-day average of positive tests in July. 

Now, there are many more tests, and many cases are being detected earlier - so hospitalizations have lagged.

• 7-day average cases are at a new record.

• Record Hospitalizations.

by Calculated Risk on 11/15/2020 01:41:00 PM

With the ten year yield at 0.89%, and based on an historical relationship, 30-year rates should currently be around 3.0%.

Mortgage News Daily reports that the most prevalent 30 year fixed rate is now at 2.94% for top tier scenarios. So mortgage rates are about as expected.

The graph shows the relationship between the monthly 10 year Treasury Yield and 30 year mortgage rates from the Freddie Mac survey.

Currently the 10 year Treasury yield is at 0.89%, and 30 year mortgage rates were at 2.84% according to the Freddie Mac survey last week - close to expected.

The record low in the Freddie Mac survey was 2.78% in the week ending November 5, 2020 (Survey started in 1971).

Freddie Mac has a similar graph here with a linear fit (using data since 1990).   Using their formula, 30 year rates would be around 2.77%.

by Calculated Risk on 11/14/2020 06:04:00 PM

The end of the pandemic is coming, possibly by Q2 2021! Please be careful, especially over the holidays. Thanksgiving, Christmas and New Years will be tough this year, but keep your guard up - plan now to have safe holidays.

The US is now averaging over 1 million tests per day. Based on the experience of other countries, for adequate test-and-trace (and isolation) to reduce infections, the percent positive needs to be well under 5% (probably close to 1%), so the US still needs to increase the number of tests per day significantly (or take actions to push down the number of new infections).

There were 1,343,467 test results reported over the last 24 hours.

There were 163,473 positive tests.

Over 14,500 US deaths have been reported so far in November. See the graph on US Daily Deaths here.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 12.2% (red line is 7 day average).  The percent positive is calculated by dividing positive results by the sum of negative and positive results (I don't include pending).

And check out COVID Exit Strategy to see how each state is doing.

The second graph shows the 7 day average of positive tests reported and daily hospitalizations.

The dashed line is the previous hospitalization maximum.

Note that there were very few tests available in March and April, and many cases were missed, so the hospitalizations was higher relative to the 7-day average of positive tests in July. 

Now, there are many more tests, and many cases are being detected earlier - so hospitalizations have lagged.   Hospitalizations are now at a new record.

This is a new record 7-day average cases for the USA.

by Calculated Risk on 11/14/2020 08:11:00 AM

The key economic reports this week are October Retail Sales, Housing Starts and Existing Home Sales.

For manufacturing, October industrial production, and the November New York, Philly and Kansas City Fed surveys, will be released this week.

----- Monday, November 16th -----
8:30 AM: The New York Fed Empire State manufacturing survey for November. The consensus is for a reading of 13.8, up from 10.5.

----- Tuesday, November 17th -----
8:30 AM ET: Retail sales for October will be released.

The consensus is for a 0.5% increase in retail sales.

This 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 6.8% on a YoY basis.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for October.

This graph shows industrial production since 1967.

The consensus is for a 1.0% increase in Industrial Production, and for Capacity Utilization to increase to 72.4%.

10:00 AM: The November NAHB homebuilder survey. The consensus is for a reading of  85, unchanged from 85. Any number above 50 indicates that more builders view sales conditions as good than poor.

11:00 AM: NY Fed: Q3 Quarterly Report on Household Debt and Credit

----- Wednesday, November 18th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: Housing Starts for October.

This graph shows single and total housing starts since 1968.

The consensus is for 1.460 million SAAR, up from 1.415 million SAAR.

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

----- Thursday, November 19th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is initial claims decreased to 700 thousand from 709 thousand last week.

8:30 AM: the Philly Fed manufacturing survey for November. The consensus is for a reading of 24.0, down from 32.3.

10:00 AM: Existing Home Sales for October from the National Association of Realtors (NAR). The consensus is for 6.45 million SAAR, down from 6.54 million in September.

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

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

----- Friday, November 20th -----
10:00 AM: State Employment and Unemployment (Monthly) for October 2019

by Calculated Risk on 11/13/2020 07:08:00 PM

The end of the pandemic is coming, possibly by Q2 2021! Please be careful, especially over the holidays. Thanksgiving, Christmas and New Years will be tough this year, but keep your guard up - plan now to have safe holidays.

The US is now averaging over 1 million tests per day. Based on the experience of other countries, for adequate test-and-trace (and isolation) to reduce infections, the percent positive needs to be well under 5% (probably close to 1%), so the US still needs to increase the number of tests per day significantly (or take actions to push down the number of new infections).

There were 1,383,088 test results reported over the last 24 hours.

There were 170,333 positive tests. This is a new record.

Over 13,000 US deaths have been reported so far in November. See the graph on US Daily Deaths here.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 12.3% (red line is 7 day average).  The percent positive is calculated by dividing positive results by the sum of negative and positive results (I don't include pending).

And check out COVID Exit Strategy to see how each state is doing.

The second graph shows the 7 day average of positive tests reported and daily hospitalizations.

The dashed line is the previous hospitalization maximum.

Note that there were very few tests available in March and April, and many cases were missed, so the hospitalizations was higher relative to the 7-day average of positive tests in July. 

Now, there are many more tests, and many cases are being detected earlier - so hospitalizations have lagged.   Hospitalizations are now at a new record.

This is a new record 7-day average cases for the USA.