by Calculated Risk on 9/27/2021 12:48:00 PM

Today, in the Newsletter: Mortgage Rates Increasing

Excerpt:

With the ten year yield close to 1.50%, and based on an historical relationship, 30-year rates should currently be around 3.4%.

Mortgage News Daily reports that the most prevalent 30 year fixed rate is now at 3.13% for top tier scenarios. So mortgage rates are a little lower than expected.

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

by Calculated Risk on 9/27/2021 10:41:00 AM

Tracking existing home inventory will be very important this year.

Click on graph for larger image in graph gallery.

This inventory graph is courtesy of Altos Research.

As of September 24th, inventory was at 433 thousand (7 day average), compared to 568 thousand for the same week a year ago.  That is a decline of 23.8%.

Compared to the same week in 2019, inventory is down 55% from 963 thousand.

A week ago, inventory was at 436 thousand, and was down 23.8% YoY.   Three weeks ago inventory was at 437 thousand (the peak for the year so far).

Seasonally, inventory bottomed in April (usually inventory bottoms in January or February).  Now inventory may be peaking for the year.   Inventory was about 41.1% above the record low in early April.

Key question: Usually inventory peaks in the Summer, and then declines into the Fall.  Will inventory follow the normal seasonal pattern, or will inventory continue to increase over the coming months?  This will be important to watch for house prices and housing activity.  

Mike Simonsen discusses this data regularly on Youtube.  

Altos Research has also seen a significant pickup in price decreases - now well above the level of a year ago - but still below a normal rate for September.

by Calculated Risk on 9/27/2021 08:34:00 AM

These indicators are mostly for travel and entertainment.    It will interesting to watch these sectors recover as the pandemic subsides.

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

This data is as of September 26th.

Click on graph for larger image.

This data shows the 7-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.

The 7-day average is down 24.5% from the same day in 2019 (75.5% of 2019).  (Dashed line)

Note that the dashed line hit a pandemic high over the Labor Day weekend - probably due to leisure travel, but is now below pre-holiday levels.

The red line usually increases seasonally after Labor Day.  But, so far, it appears business traffic is soft.

----- 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!

Thanks to OpenTable for providing this restaurant data:

This data is updated through September 25, 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 for the Labor Day weekend, but declined after the holiday.  The 7-day average for the US is down 11% compared to 2019.

----- Movie Tickets: Box Office Mojo -----
This 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 September 23rd.

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

Movie ticket sales were at $63 million last week, down only about 55% from the median for the week.

----- Hotel Occupancy: STR -----
This 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, dashed purple is 2019, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020).

This data is through September 18th. The occupancy rate was down 11.6% compared to the same week in 2019. The comparison to 2019 was difficult this week due to the timing of Labor Day.

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

With solid leisure travel, the Summer months had decent occupancy - but it is uncertain what will happen in the Fall with business travel - usually weekly occupancy increases to around 70% in the weeks following Labor Day due to renewed business travel.

----- 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 of 2019.

Blue is for 2020.  Red is for 2021.

As of September 10th, gasoline supplied was down 4.8% compared to the same week in 2019.

There have been five weeks so far this year when gasoline supplied was up compared to the same week in 2019.

----- 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 September 25th 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 119% of the January 2020 level. 

New York City is doing well by this metric, but subway usage in NYC is down sharply (next graph).

----- 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 weekly data since 2015. 

Most weeks are between 30 and 35 million entries, and currently there are clsoe to 15 million subway turnstile entries per week - and moving up recently.

This data is through Friday, September 24th.

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 9/26/2021 07:10:00 PM

Weekend:
• Schedule for Week of September 26, 2021

• The Home ATM

Monday:
• 8:30 AM ET, Durable Goods Orders for August from the Census Bureau. The consensus is for a 0.7% increase in durable goods orders.

• 10:30 AM, Dallas Fed Survey of Manufacturing Activity for September.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 7 and DOW futures are up 92 (fair value).

Oil prices were up over the last week with WTI futures at $74.53 per barrel and Brent at $78.55 per barrel. A year ago, WTI was at $40, and Brent was at $41 - so WTI oil prices are UP 90% year-over-year (oil prices collapsed at the beginning of the pandemic).

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.18 per gallon. A year ago prices were at $2.18 per gallon, so gasoline prices are up $1.00 per gallon year-over-year.

by Calculated Risk on 9/26/2021 04:06:00 PM

In the Newsletter I have The Home ATM

Excerpt:

In Q2 2021, mortgage debt increased $223 billion, the largest quarterly increase since 2006.
...
The bottom line is the recent increase in MEW is not concerning - it is far less as a percent of disposable personal income than during the bubble, and most homeowners have substantial equity.

by Calculated Risk on 9/25/2021 02:11:00 PM

At the Calculated Risk Newsletter this week:

• Comments on August New Home Sales; Record 105 thousand homes have not been started

• Existing Homes: Some Regional Differences Appear; Final August Update for Local Housing Markets

• Existing-Home Sales Decreased to 5.88 million in August; Sales will be down year-over-year for the remainder of 2021

• Housing Starts increased to 1.615 Million Annual Rate in August; Most Multi-Family Units Under Construction Since 1974

This will usually be published several times a week, and will provide more in-depth analysis of the housing market.

The blog will continue as always!

You can subscribe at https://calculatedrisk.substack.com/ (Currently all content is available for free, but please subscribe).

by Calculated Risk on 9/25/2021 08:11:00 AM

The key reports this week are the third estimate of Q2 GDP, the September ISM manufacturing index, September auto sales, Personal Income and Outlays for August and Case-Shiller house prices for July.

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

Fed Chair Powell testifies on Coronavirus and CARES Act this week.

----- Monday, September 27th -----
8:30 AM: Durable Goods Orders for August from the Census Bureau. The consensus is for a 0.7% increase in durable goods orders.

10:30 AM: Dallas Fed Survey of Manufacturing Activity for September.

----- Tuesday, September 28th -----
9:00 AM: FHFA House Price Index for July. This was originally a GSE only repeat sales, however there is also an expanded index.

9:00 AM: S&P/Case-Shiller House Price Index for July.

This graph shows the year-over-year change in the seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the most recent report (the Composite 20 was started in January 2000).

The consensus is for a 20.0% year-over-year increase in the Comp 20 index for July.

10:00 AM: the Richmond Fed manufacturing survey for September. This is the last of the regional surveys for September.

10:00 AM, Testimony, Fed Chair Powell, Coronavirus and CARES Act, Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs

----- Wednesday, September 29th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM: Pending Home Sales Index for August. The consensus is 1.3% increase in the index.

11:45 AM: Discussion, Fed Chair Powell, Policy Panel Discussion, At the European Central Bank Forum on Central Banking

----- Thursday, September 30th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 335 thousand initial claims, down from 351 thousand last week.

8:30 AM: Gross Domestic Product, 2nd quarter 2021 (Third estimate). The consensus is that real GDP increased 6.7% annualized in Q2, revised up from the second estimate of 6.6%.

9:45 AM: Chicago Purchasing Managers Index for September. The consensus is for a reading of 65.0, down from 66.8 in August.

----- Friday, October 1st -----
8:30 AM: Personal Income and Outlays for August. The consensus is for a 0.3% increase in personal income, and for a 0.6% increase in personal spending. And for the Core PCE price index to increase 0.2%.

10:00 AM: ISM Manufacturing Index for September. The consensus is for a reading of 59.5, down from 59.9 in August. 

10:00 AM: Construction Spending for August. The consensus is for a 0.3% increase.

All day: Light vehicle sales for September.

The consensus is for sales of 13.4 million SAAR, up from 13.1 million SAAR in August (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the current sales rate.

by Calculated Risk on 9/24/2021 04:18:00 PM

Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.

This data is as of September 21st.

From Andy Walden at Black Knight: Little Movement in Forbearance Volumes This Week

The number of active forbearance plans fell by 18,000 (-1.4%) this week, leaving 1.58 million U.S. homeowners in COVID-19 forbearance as of September [21].

Declines of 11,000 and 10,000 among FHA/VA and GSE loans respectively were partially offset by a 3,000 rise in PLS/portfolio plans. Overall, forbearances are now down 182,000 (-10%) from the same time last month, with the strongest decline (-13%) seen among GSE plans.

The population of mortgage holders in COVID-19 related forbearance plans represents 3% of all active mortgages, including 1.7% of GSE, 5.2% of FHA/VA and 3.8% of portfolio held and privately securitized loans.

In terms of forbearance plan starts, 15,000 new plans were initiated since last Tuesday – down slightly from last week’s 16,000 starts – while 34,000 plans were restarted, compared to last week’s volume of 35,000. Meanwhile, in typical mid-month behavior, plan exits dipped slightly this week, but are expected to ramp up in coming weeks.

Click on graph for larger image.

More than 460,000 plans are still slated for review for extension/removal over the final week of September, with some 300,000 set to reach their final expirations based on current allowable forbearance term lengths. This could lead to significant movement in volumes entering early October.
emphasis added

by Calculated Risk on 9/24/2021 04:13:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 388,567,109, as of a week ago 383,994,877, or 0.65 million doses per day.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	55.1%	54.4%	≥70.0%1
Fully Vaccinated (millions)	183.0	180.6	≥2321
New Cases per Day3	117,066	142,885	≤5,0002
Hospitalized3	80,957	89,248	≤3,0002
Deaths per Day3🚩	1,559	1,553	≤502
1 Minimum to achieve "herd immunity" (estimated between 70% and 85%). 2my goals to stop daily posts, 37 day average for Cases, Currently Hospitalized, and Deaths 🚩 Increasing 7 day average week-over-week for Cases, Hospitalized, and Deaths ✅ Goal met.

IMPORTANT: For "herd immunity" most experts believe we need 70% to 85% of the total population fully vaccinated (or already had COVID).  

KUDOS to the residents of the 13 states that have achieved 60% of total population fully vaccinated: Vermont at 69.2%, Connecticut, Maine, Rhode Island, Massachusetts, New Jersey, Maryland, New York, New Mexico, New Hampshire, Oregon, Washington, and Virginia at 60.0%.

The following 19 states and D.C. have between 50% and 59.9% fully vaccinated: District of Columbia at 59.6%, Colorado, California, Minnesota, Hawaii, Pennsylvania, Delaware, Florida, Wisconsin, Nebraska, Iowa, Illinois, Michigan, Kentucky, South Dakota, Texas, Arizona, Kansas, Nevada, and Utah at 50.2%.

Next up (total population, fully vaccinated according to CDC) are Ohio at 49.9%, Alaska at 49.7%, North Carolina 49.2%, Indiana at 48.1% and Montana at 48.1%.

Click on graph for larger image.

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

by Calculated Risk on 9/24/2021 12:32:00 PM

GDP forecasts had been downgraded sharply for Q3 due to COVID, but now seem to have stabilized. 

Here is a table of some of the forecasts over the last two months.

	Merrill	Goldman	GDPNow
7/30/21	7.0%	9.0%	6.1%
8/20/21	4.5%	5.5%	6.1%
9/10/21	4.5%	3.5%	3.7%
9/17/21	4.5%	4.5%	3.6%
9/24/21	4.5%	4.5%	3.7%

From BofA Merrill Lynch:

We continue to track 4.5% qoq saar for 3Q GDP. [Sept 24 estimate]
emphasis added

From Goldman Sachs:

We left our Q3 GDP tracking estimate unchanged at +4.5% (qoq ar). [Sept 24 estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2021 is 3.7 percent on September 21, up from 3.6 percent on September 16. [Sept 21 estimate]