Monday, May 03, 2021

Tuesday: Trade Deficit

by Calculated Risk on 5/03/2021 09:00:00 PM

From Matthew Graham at Mortgage News Daily: MBS RECAP: Logical Reaction to Data Sets Stage For Interesting Week

The week began with bond markets reacting to weaker economic data with a logical rally. That's the sort of quintessential connection that's been fairly elusive for most of the post-pandemic era. Last month's super strong jobs report (and subsequent bond losses) suggested that trend may be changing. ... [30 year fixed 3.10%]
emphasis added
• At 8:00 AM ET, Corelogic House Price index for March.

• At 8:30 AM, Trade Balance report for March from the Census Bureau. The consensus is the trade deficit to be $74.0 billion.  The U.S. trade deficit was at $71.1 Billion in February.

May 3rd COVID-19 Vaccinations, New Cases, Hospitalizations

by Calculated Risk on 5/03/2021 06:33:00 PM

Note: I'm looking forward to not posting this daily! I've been posting this data daily for over a year, and I'll stop once all three of these criteria are met:
1) 70% of the population over 18 has had at least one dose of vaccine, and
2) new cases are under 5,000 per day, and
3) hospitalizations are below 3,000.

According to the CDC, 246.8 million doses have been administered. 40.6% of the population over 18 is fully vaccinated, and 56.3% of the population over 18 has had at least one dose (145.3 million people over 18 have had at least one dose).

And check out COVID Act Now to see how each state is doing. 

Over 1,000 US deaths were reported so far in May due to COVID.

COVID-19 Positive Tests per DayClick on graph for larger image.

This graph shows the daily (columns) 7 day average (line) of positive tests reported.

Note: The ups and downs during the Winter surge were related to reporting delays due to the Thanksgiving and Christmas holidays.

This data is from the CDC.

The 7-day average is 48,165, down from 49,456 yesterday, and down from the recent peak of 69,881 on April 13, 2021. This is the lowest since October 8, 2020, but well above the post-summer surge low of 34,668.

The second graph shows the number of people hospitalized.

COVID-19 HospitalizedThis data is also from the CDC.

The CDC cautions that due to reporting delays, the area in grey will probably increase.

The current 7-day average is 34,012, down from 36,000 reported yesterday, but well above the post-summer surge low of 23,000.

MBA Survey: "Share of Mortgage Loans in Forbearance Slightly Decreases to 4.47%"

by Calculated Risk on 5/03/2021 04:00:00 PM

Note: This is as of April 25th.

From the MBA: Share of Mortgage Loans in Forbearance Slightly Decreases to 4.47%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 2 basis points from 4.49% of servicers’ portfolio volume in the prior week to 4.47% as of April 25, 2021. According to MBA’s estimate, 2.23 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 points to 2.42%. Ginnie Mae loans in forbearance decreased 7 basis points to 6.02%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 13 basis points to 8.55%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 2 basis points to 4.70%, and the percentage of loans in forbearance for depository servicers also declined 2 basis points to 4.62%.

"The share of loans in forbearance decreased for the ninth straight week, dropping by 2 basis points. The rate of exits has slowed the past two weeks, with this week’s exit rate reaching the lowest since February,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “The increase in the forbearance share for portfolio and PLS loans highlights both the ongoing buyouts of delinquent loans from Ginnie Mae pools as well as an increased forbearance share for other loans that are not federally backed.”

Added Fratantoni, “Job market and housing market data remain strong. We expect that further gains in hiring will help to support many homeowners as they exit forbearance in the months ahead.”
emphasis added
MBA Forbearance Survey 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 trended down since then.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.06% to 0.05%."

Fed Survey: Banks reported Eased Standards, Increased Demand for Residential Real Estate Loans

by Calculated Risk on 5/03/2021 02:13:00 PM

From the Federal Reserve: The April 2021 Senior Loan Officer Opinion Survey on Bank Lending Practices

Regarding loans to businesses, respondents to the April survey indicated that, on balance, they eased their standards on commercial and industrial (C&I) loans to firms of all sizes over the first quarter. Banks reported weaker demand, on net, for C&I loans to large and middle-market firms, and demand for C&I loans from small firms remained basically unchanged. Standards on commercial real estate (CRE) loans secured by nonfarm nonresidential properties remained basically unchanged, while banks tightened standards on construction and land development loans and eased standards on multifamily loans. Banks reported stronger demand for construction and land development and multifamily loans and reported weaker demand for nonfarm nonresidential loans.

For loans to households, banks eased standards across most categories of residential real estate (RRE) loans, on net, and reported stronger demand for most types of RRE loans over the first quarter. Banks also eased standards across all three consumer loan categories—credit card loans, auto loans, and other consumer loans. Meanwhile, demand for credit card and other consumer loans remained basically unchanged, and demand for auto loans moderately strengthened.
emphasis added
Senior Loan Officer Survey, CRE Click on graph for larger image.

This graph on Residnetial Real Estate lending is from the Senior Loan Officer Survey Charts.

This shows that banks have eased standards (tightened for subprime), and that there is increased demand for RRE loans.

Housing Inventory May 3rd Update: At Record Lows

by Calculated Risk on 5/03/2021 10:39:00 AM

One of the key questions for 2021 is: Will inventory increase as the pandemic subsides, or will inventory decrease further in 2021?

Tracking inventory will be very important this year.

Lumcber PricesClick on graph for larger image in graph gallery.

This inventory graph is courtesy of Altos Research.

As of April 30th, inventory was at 307 thousand (7 day average), compared to 738 thousand the same week a year ago.  That is a decline of 58%.

A week ago, inventory was at 310 thousand, and was down 58% YoY.  Seasonally, inventory might be at a bottom - this is the same level as three weeks ago at 307 thousand.

Mike Simonsen discusses this data regularly on Youtube.

Construction Spending increased 0.2% in March

by Calculated Risk on 5/03/2021 10:18:00 AM

From the Census Bureau reported that overall construction spending decreased:

Construction spending during March 2021 was estimated at a seasonally adjusted annual rate of $1,513.1 billion, 0.2 percent above the revised February estimate of $1,509.9 billion. The March figure is 5.3 percent above the March 2020 estimate of $1,436.7 billion.
emphasis added
Private spending increased and public spending decreased:
Spending on private construction was at a seasonally adjusted annual rate of $1,169.2 billion, 0.7 percent above the revised February estimate of $1,160.9 billion. ...

In March, the estimated seasonally adjusted annual rate of public construction spending was $343.9 billion, 1.5 percent below the revised February estimate of $349.0 billion.
Construction Spending Click on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Residential spending is 7% above the bubble peak (in nominal terms - not adjusted for inflation).

Non-residential spending is 7% above the previous peak in January 2008 (nominal dollars), but has been weak recently.

Public construction spending is 6% above the previous peak in March 2009, and 31% above the austerity low in February 2014.

Year-over-year Construction SpendingThe second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is up 23.3%. Non-residential spending is down 9.1% year-over-year. Public spending is down 4.6% year-over-year.

Construction was considered an essential service in most areas and did not decline sharply like many other sectors, but it seems likely that non-residential will be under pressure. For example, lodging is down 24% YoY, multi-retail down 31.5% YoY, and office down 4.2% YoY.

This was well below consensus expectations of a 2.0% increase in spending, and construction spending for the previous two months was revised down.

ISM® Manufacturing index Decreased to 60.7% in April

by Calculated Risk on 5/03/2021 10:04:00 AM

(Posted with permission). The ISM manufacturing index indicated expansion in April. The PMI® was at 60.7% in April, down from 64.7% in March. The employment index was at 55.1%, down from 59.6% last month, and the new orders index was at 64.3%, down from 68.0%.

From ISM: April 2021 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector grew in April, with the overall economy notching an 11th consecutive month of growth, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:

The April Manufacturing PMI® registered 60.7 percent, a decrease of 4 percentage points from the March reading of 64.7 percent. This figure indicates expansion in the overall economy for the 11th month in a row after contraction in April 2020. The New Orders Index registered 64.3 percent, declining 3.7 percentage points from the March reading of 68 percent. The Production Index registered 62.5 percent, a decrease of 5.6 percentage points compared to the March reading of 68.1 percent. The Backlog of Orders Index registered 68.2 percent, 0.7 percentage point higher compared to the March reading of 67.5 percent. The Employment Index registered 55.1 percent, 4.5 percentage points lower than the March reading of 59.6 percent. The Supplier Deliveries Index registered 75 percent, down 1.6 percentage points from the March figure of 76.6 percent. The Inventories Index registered 46.5 percent, 4.3 percentage points lower than the March reading of 50.8 percent. The Prices Index registered 89.6 percent, up 4 percentage points compared to the March reading of 85.6 percent. The New Export Orders Index registered 54.9 percent, an increase of 0.4 percentage point compared to the March reading of 54.5 percent. The Imports Index registered 52.2 percent, a 4.5-percentage point decrease from the March reading of 56.7 percent.”
emphasis added
This was well below expectations.

This suggests manufacturing expanded at a slower pace in April than in March.

Seven High Frequency Indicators for the Economy

by Calculated Risk on 5/03/2021 08:30:00 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, everyone could be vaccinated by June.

----- Airlines: Transportation Security Administration -----

The TSA is providing daily travel numbers.

TSA Traveler Data Click on graph for larger image.

This data shows the seven day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Blue) and 2021 (Red).

The dashed line is the percent of 2019 for the seven day average.

This data is as of May 2nd.

The seven day average is down 40.6% from the same day in 2019 (59.4% of 2019).  (Dashed line)

There was a slow increase from the bottom, with ups and downs due to the holidays - and TSA data has picked up in 2021, but mostly sideways over the last several weeks.

----- 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.

IMPORTANT: OpenTable notes: "we’ve updated the data including downloadable dataset from January 1, 2021 onward to compare seated diners from 2021 to 2019, as opposed to year over year." Thanks!

Move Box OfficeThanks to OpenTable for providing this restaurant data:

This data is updated through May 1, 2021.

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.

Dining picked up during the holidays, then slumped with the huge winter surge in cases.  Dining was picking up again, but has moved up and down over the last couple of weeks.  Florida and Texas are above 2019 levels.

----- Movie Tickets: Box Office Mojo -----

Move Box OfficeThis data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue).  

Blue is 2020 and Red is 2021.  

The data is from BoxOfficeMojo through Apr 29th.

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

Movie ticket sales were at $61 million last week,  down about 79% from the median for the week.

----- Hotel Occupancy: STR -----

Hotel Occupancy RateThis graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

The red line is for 2021, black is 2020, blue is the median, and dashed light blue is for 2009 (the worst year since the Great Depression for hotels - before 2020).

Occupancy is now above the horrible 2009 levels.

This data is through April 24th. Hotel occupancy is currently down 17% compared to same week in 2019). Note: Occupancy was up year-over-year, since occupancy declined sharply at the onset of the pandemic. However, occupancy is still down significantly from normal levels.

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

----- Gasoline Supplied: Energy Information Administration -----

gasoline ConsumptionThis graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019.

Blue is for 2020.  Red is for 2021.

As of April 23rd, gasoline supplied was off about 3.4% (about 96.6% of the same week in 2019).

Gasoline supplied was up year-over-year, since at one point, gasoline supplied was off almost 50% YoY in 2020.

----- 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.

Apple Mobility Data This data is through May 1st 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 68% of the January 2020 level. It is at 67% in Chicago, and 60% in Houston - and moving up recently.

----- New York City Subway Usage -----

Here is some interesting data on New York subway usage (HT BR).

New York City Subway UsageThis graph is from Todd W Schneider. This is weekly data since 2015. 

Most weeks are between 30 and 35 million entries, and currently there more than 10 million subway turnstile entries per week - and increasing.

This data is through Friday, April 30th.

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".

Sunday, May 02, 2021

Goldman on Housing: Double-digit price gains in 2021 and 2022

by Calculated Risk on 5/02/2021 11:00:00 PM

A few brief excerpts from a Goldman Sachs research note on housing:

Strong demand for housing looks sustainable. Even before the pandemic, demographic tailwinds and historically-low mortgage rates had pushed demand to high levels. ... consumer surveys indicate that household buying intentions are now the highest in 20 years. ... mortgage lending standards have remained fairly tight. With demographic trends still strong, mortgage rates very low, housing affordability still high, and household wealth as a share of income at the highest level in US history, demand should remain strong.

The supply picture offers no quick fixes to the shortage of available homes ... The resulting picture is one of a persistent supply-demand imbalance in the years ahead. ... [Our] model suggests that rising prices will only gradually reduce affordability enough to dampen demand and mitigate the supply-demand imbalance. As a result, the model projects double-digit price gains both this year and next.

Monday: ISM Mfg, Construction Spending, Vehicle Sales and More

by Calculated Risk on 5/02/2021 06:29:00 PM

Schedule for Week of May 2, 2021

Q1 2021 GDP Details on Residential and Commercial Real Estate

• At 10:00 AM ET, ISM Manufacturing Index for April. The consensus is for the ISM to be at 65.0, up from 64.7 in March.

• Also at 10:00 AM, Construction Spending for March. The consensus is for a 2.0% increase in construction spending.

• All day, Light vehicle sales for April. The expectation is for light vehicle sales to be 17.9 million SAAR in April, unchanged from 17.85 million in March (Seasonally Adjusted Annual Rate).

• At 2:00 PM, Senior Loan Officer Opinion Survey on Bank Lending Practices for April.

• At 2:20 PM, Speech, Fed Chair Jerome Powell, Community Development, At the National Community Reinvestment Coalition’s 2021 Just Economy Conference (via livestream)

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 10, and DOW futures are up 68 (fair value).

Oil prices were up over the last week with WTI futures at $63.56 per barrel and Brent at $66.73 per barrel. A year ago, WTI was at $20, and Brent was at $18 - so WTI oil prices are UP sharply year-over-year (oil prices collapsed at the beginning of the pandemic).

Here is a graph from for nationwide gasoline prices. Nationally prices are at $2.89 per gallon. A year ago prices were at $1.75 per gallon, so gasoline prices are up $1.14 per gallon year-over-year.