by Calculated Risk on 4/16/2024 10:17:00 AM
Tuesday, April 16, 2024
Single Family Starts Up 22% Year-over-year in March; Multi-Family Starts Down Sharply
Today, in the Calculated Risk Real Estate Newsletter: Single Family Starts Up 22% Year-over-year in March; Multi-Family Starts Down Sharply
A brief excerpt:
Total housing starts in March were well below expectations, however, starts in January and February were revised up.
The third graph shows the month-to-month comparison for total starts between 2023 (blue) and 2024 (red).
Total starts were down 4.3% in March compared to March 2023.
Starts were down year-over-year (YoY) in March following 4 consecutive months with starts up YoY. The YoY decline is due to the sharp decrease in multi-family starts.
Industrial Production Increased 0.4% in March
by Calculated Risk on 4/16/2024 09:15:00 AM
From the Fed: Industrial Production and Capacity Utilization
Industrial production rose 0.4 percent in March but declined at an annual rate of 1.8 percent in the first quarter. Manufacturing output increased 0.5 percent in March, boosted in part by a gain of 3.1 percent in motor vehicles and parts; factory output excluding motor vehicles and parts moved up 0.3 percent. The index for mining fell 1.4 percent, and the index for utilities gained 2 percent. At 102.7 percent of its 2017 average, total industrial production in March was unchanged compared with its year-earlier level. Capacity utilization moved up to 78.4 percent in March, a rate that is 1.2 percentage points below its long-run (1972–2023) average.Click on graph for larger image.
emphasis added
This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and above the level in February 2020 (pre-pandemic).
Capacity utilization at 78.4% is 1.2% below the average from 1972 to 2022. This was below consensus expectations.
Note: y-axis doesn't start at zero to better show the change.
The second graph shows industrial production since 1967.
Industrial production increased to 102.7. This is above the pre-pandemic level.
Industrial production was at consensus expectations.
Housing Starts Decreased to 1.321 million Annual Rate in March
by Calculated Risk on 4/16/2024 08:30:00 AM
From the Census Bureau: Permits, Starts and Completions
Housing Starts:Click on graph for larger image.
Privately‐owned housing starts in March were at a seasonally adjusted annual rate of 1,321,000. This is 14.7 percent below the revised February estimate of 1,549,000 and is 4.3 percent below the March 2023 rate of 1,380,000. Single‐family housing starts in March were at a rate of 1,022,000; this is 12.4 percent below the revised February figure of 1,167,000. The March rate for units in buildings with five units or more was 290,000.
Building Permits:
Privately‐owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,458,000. This is 4.3 percent below the revised February rate of 1,523,000, but is 1.5 percent above the March 2023 rate of 1,437,000. Single‐family authorizations in March were at a rate of 973,000; this is 5.7 percent below the revised February figure of 1,032,000. Authorizations of units in buildings with five units or more were at a rate of 433,000 in March.
emphasis added
The first graph shows single and multi-family housing starts since 2000.
Multi-family starts (blue, 2+ units) decreased in March compared to February. Multi-family starts were down 44.3% year-over-year in March.
Single-family starts (red) decreased in March and were up 21.2% year-over-year.
The second graph shows single and multi-family housing starts since 1968.
This shows the huge collapse following the housing bubble, and then the eventual recovery - and the recent collapse and recovery in single-family starts.
Total housing starts in March were well below expectations, however, starts in January and February were revised up.
I'll have more later …
Monday, April 15, 2024
Tuesday: Housing Starts, Industrial Production
by Calculated Risk on 4/15/2024 07:18:00 PM
From Matthew Graham at Mortgage News Daily: After Months of Relative Calm, Rates are Starting to Look Panicked Again
In 2023, there were multiple examples of mortgage rates moving up by roughly half a percent in a relatively short amount of time (1-3 weeks). Since the big shift in November, we've only seen one similar example and it was more of a technicality (a sharp drop in rates followed by a correction in early Feb), until today.Tuesday:
...
The culprit was economic data ... this data does not line up with the notion of Fed rate cuts in the near term. It also had an immediate negative impact on the rest of the bond market, including the bonds that most directly dictate mortgage rates.
The average lender is now back into the mid 7s for a top tier, conventional 30yr fixed scenario. [30 year fixed 7.44%]
emphasis added
• At 8:30 AM ET, Housing Starts for March. The consensus is for 1.480 million SAAR, down from 1.521 million SAAR in February.
• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for March. The consensus is for a 0.4% increase in Industrial Production, and for Capacity Utilization to increase to 78.5%.
3rd Look at Local Housing Markets in March
by Calculated Risk on 4/15/2024 12:49:00 PM
Today, in the Calculated Risk Real Estate Newsletter: 3rd Look at Local Housing Markets in March
A brief excerpt:
NOTE: The tables for active listings, new listings and closed sales all include a comparison to March 2019 for each local market (some 2019 data is not available).There is much more in the article.
This is the third look at several early reporting local markets in March. I’m tracking about 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.
Closed sales in March were mostly for contracts signed in January and February when 30-year mortgage rates averaged 6.44% and 6.78%, respectively. This is down from the 7%+ mortgage rates in the August through November period (although rates are now back in the 7%+ range again).
...
And a table of March sales.
In March, sales in these markets were down 9.2% YoY. In February, these same markets were up 2.2% year-over-year Not Seasonally Adjusted (NSA).
Sales in most of these markets are down compared to January 2019.
...
Many more local markets to come!
NAHB: Builder Confidence Unchanged in April
by Calculated Risk on 4/15/2024 10:00:00 AM
The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 51, unchanged from 51 last month. Any number above 50 indicates that more builders view sales conditions as good than poor.
From the NAHB: Builder Sentiment Unchanged in April
Builder sentiment was flat in April as mortgage rates remained close to 7% over the past month and the latest inflation data failed to show improvement during the first quarter of 2024.Click on graph for larger image.
Builder confidence in the market for newly built single-family homes was 51 in April, unchanged from March, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. This breaks a four-month period of gains for the index, which nonetheless remains above the key breakeven point of 50.
“With many frustrated buyers back on the fence waiting for interest rates to fall, policymakers can help ease affordability challenges by reducing inefficient regulatory rules that raise housing costs and limit supply,” said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan.
“April’s flat reading suggests potential for demand growth is there, but buyers are hesitating until they can better gauge where interest rates are headed,” said NAHB Chief Economist Robert Dietz. “With the markets now adjusting to rates being somewhat higher due to recent inflation readings, we still anticipate the Federal Reserve will announce future rate cuts later this year, and that mortgage rates will moderate in the second half of 2024.”
The April HMI survey also revealed that 22% of builders cut home prices this month, down from 24% in March and 36% in December 2023. However, the average price reduction in April held steady at 6% for the 10th straight month. Meanwhile, the use of sales incentives ticked down to 57% in April from a reading of 60% in March.
...
The HMI index charting current sales conditions in April increased one point to 57 and the component gauging traffic of prospective buyers also edged one point higher to 35. The component measuring sales expectations in the next six months fell two points to 60.
Looking at the three-month moving averages for regional HMI scores, the Northeast increased four points to 63, the Midwest gained five points to 46, the South rose one point to 51 and the West registered a four-point gain to 47.
emphasis added
This graph shows the NAHB index since Jan 1985.
This was at the consensus forecast.
Retail Sales Increased 0.7% in March
by Calculated Risk on 4/15/2024 08:37:00 AM
On a monthly basis, retail sales were up 0.7% from February to March (seasonally adjusted), and sales were up 4.0 percent from March 2023.
From the Census Bureau report:
Advance estimates of U.S. retail and food services sales for March 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $709.6 billion, up 0.7 percent from the previous month, and up 4.0 percent above March 2023. ... The January 2024 to February 2024 percent change was revised from up 0.6 percent to up 0.9 percent.Click on graph for larger image.
emphasis added
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 were up 0.6% in March.
The second 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 4.4% on a YoY basis.
The increase in sales in March was above expectations, and, sales in January and February were revised up.
Housing April 15th Weekly Update: Inventory up 2.6% Week-over-week, Up 29.6% Year-over-year
by Calculated Risk on 4/15/2024 08:01:00 AM
Click on graph for larger image.
This inventory graph is courtesy of Altos Research.
Sunday, April 14, 2024
Monday: Retail Sales, NY Fed Mfg, Homebuilder Survey
by Calculated Risk on 4/14/2024 11:57:00 PM
Weekend:
• Schedule for Week of April 14, 2024
Monday:
• At 8:30 AM ET, Retail sales for March is scheduled to be released. The consensus is for a 0.3% increase in retail sales.
• Also at 8:30 AM, The New York Fed Empire State manufacturing survey for April. The consensus is for a reading of -9.0, up from -20.9.
• At 10:00 AM, The April NAHB homebuilder survey. The consensus is for a reading of 51, unchanged from 51. Any number above 50 indicates that more builders view sales conditions as good than poor.
From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 14 and DOW futures are up 78 (fair value).
Oil prices were up over the last week with WTI futures at $85.66 per barrel and Brent at $90.45 per barrel. A year ago, WTI was at $83, and Brent was at $87 - so WTI oil prices are up slightly year-over-year.
Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.61 per gallon. A year ago, prices were at $3.65 per gallon, so gasoline prices are down $0.04 year-over-year.
Saturday, April 13, 2024
By Request: Public and Private Sector Payroll Jobs During Presidential Terms
by Calculated Risk on 4/13/2024 09:25:00 PM
Note: I used to post this monthly, but I stopped during the COVID-19 pandemic. I've received a number of requests lately to post this again, so here is another update of tracking employment during Presidential terms. We frequently use Presidential terms as time markers - we could use Speaker of the House, Fed Chair, or any other marker.
Important: There are many differences between these periods. Overall employment was smaller in the '80s, however the participation rate was increasing in the '80s (younger population and women joining the labor force), and the participation rate is generally declining now. But these graphs give an overview of employment changes.
The first graph shows the change in private sector payroll jobs from when each president took office until the end of their term(s). Presidents Carter, George H.W. Bush and Trump only served one term.
Mr. G.W. Bush (red) took office following the bursting of the stock market bubble and left during the bursting of the housing bubble. Mr. Obama (dark blue) took office during the financial crisis and great recession. There was also a significant recession in the early '80s right after Mr. Reagan (dark red) took office.
There was a recession towards the end of President G.H.W. Bush (light purple) term, and Mr. Clinton (light blue) served for eight years without a recession. And there was a pandemic related recession in 2020.
First, here is a table for private sector jobs. The previous top two private sector terms were both under President Clinton.
Term | Private Sector Jobs Added (000s) |
---|---|
Biden | 13,7351 |
Clinton 1 | 10,876 |
Clinton 2 | 10,094 |
Obama 2 | 9,926 |
Reagan 2 | 9,351 |
Carter | 9,039 |
Reagan 1 | 5,363 |
Obama 1 | 1,907 |
GHW Bush | 1,507 |
GW Bush 2 | 443 |
GW Bush 1 | -820 |
Trump | -2,192 |
1After 38 months. |
Click on graph for larger image.
The first graph is for private employment only.
Private sector employment increased by 9,039,000 under President Carter (dashed green), by 14,714,000 under President Reagan (dark red), 1,507,000 under President G.H.W. Bush (light purple), 20,970,000 under President Clinton (light blue), lost 377,000 under President G.W. Bush, and gained 11,833,000 under President Obama (dark dashed blue). During Trump's term (Orange), the economy lost 2,135,000 private sector jobs.
A big difference between the presidencies has been public sector employment. Note: the bumps in public sector employment due to the decennial Census in 1980, 1990, 2000, 2010 and 2020.
The public sector grew during Mr. Carter's term (up 1,304,000), during Mr. Reagan's terms (up 1,414,000), during Mr. G.H.W. Bush's term (up 1,127,000), during Mr. Clinton's terms (up 1,934,000), and during Mr. G.W. Bush's terms (up 1,744,000 jobs). However, the public sector declined significantly while Mr. Obama was in office (down 263,000 jobs). During Trump's term, the economy lost 528,000 public sector jobs.
Term | Public Sector Jobs Added (000s) |
---|---|
Biden | 1,4821 |
Reagan 2 | 1,438 |
Carter | 1,304 |
Clinton 2 | 1,242 |
GHW Bush | 1,127 |
GW Bush 1 | 900 |
GW Bush 2 | 844 |
Clinton 1 | 692 |
Obama 2 | 447 |
Reagan 1 | -24 |
Trump | -528 |
Obama 1 | -710 |
1After 36 months. |
Real Estate Newsletter Articles this Week: Current State of the Housing Market
by Calculated Risk on 4/13/2024 02:11:00 PM
At the Calculated Risk Real Estate Newsletter this week:
• Current State of the Housing Market; Overview for mid-April 2024
• Part 2: Current State of the Housing Market; Overview for mid-April 2024
• 2nd Look at Local Housing Markets in March
• An Update on the House Price Battle Royale: Low Inventory vs Affordability
• 1st Look at Local Housing Markets in March
This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.
Schedule for Week of April 14, 2024
by Calculated Risk on 4/13/2024 08:11:00 AM
The key reports this week are March Retail Sales, Housing Starts and Existing Home Sales.
For manufacturing, the March Industrial Production report, and NY and Philly Fed surveys will be released this week.
8:30 AM: Retail sales for March is scheduled to be released. The consensus is for a 0.3% 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 2.0% on a YoY basis in February.
8:30 AM: The New York Fed Empire State manufacturing survey for April. The consensus is for a reading of -9.0, up from -20.9.
10:00 AM: The April NAHB homebuilder survey. The consensus is for a reading of 51, unchanged from 51. Any number above 50 indicates that more builders view sales conditions as good than poor.
8:30 AM ET: Housing Starts for March.
This graph shows single and multi-family housing starts since 1968.
The consensus is for 1.480 million SAAR, down from 1.521 million SAAR in February.
9:15 AM: The Fed will release Industrial Production and Capacity Utilization for March.
This graph shows industrial production since 1967.
The consensus is for a 0.4% increase in Industrial Production, and for Capacity Utilization to increase to 78.5%.
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
2:00 PM: the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 217 thousand initial claims, up from 211 thousand last week.
8:30 AM: the Philly Fed manufacturing survey for April. The consensus is for a reading of 0.0, down from 3.2.
10:00 AM: Existing Home Sales for March from the National Association of Realtors (NAR). The consensus is for 4.20 million SAAR, down from 4.38 million.
The graph shows existing home sales from 1994 through the report last month.
10:00 AM: State Employment and Unemployment (Monthly) for March 2024
Friday, April 12, 2024
April 12th COVID Update: Weekly Deaths Decreased
by Calculated Risk on 4/12/2024 07:22:00 PM
Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.
COVID Metrics | ||||
---|---|---|---|---|
Now | Week Ago | Goal | ||
Hospitalized2 | 6,576 | 7,510 | ≤3,0001 | |
Deaths per Week2 | 961 | 1,030 | ≤3501 | |
1my goals to stop weekly posts, 2Weekly for Currently Hospitalized, and Deaths 🚩 Increasing number weekly for Hospitalized and Deaths ✅ Goal met. |
Click on graph for larger image.
This graph shows the weekly (columns) number of deaths reported.
This appears to be a leading indicator for COVID hospitalizations and deaths.
Part 2: Current State of the Housing Market; Overview for mid-April 2024
by Calculated Risk on 4/12/2024 12:55:00 PM
Today, in the Calculated Risk Real Estate Newsletter: Part 2: Current State of the Housing Market; Overview for mid-April 2024
A brief excerpt:
On Wednesday, in Part 1: Current State of the Housing Market; Overview for mid-April 2024 I reviewed home inventory, housing starts and sales.There is much more in the article.
In Part 2, I will look at house prices, mortgage rates, rents and more.
...
Other measures of house prices suggest prices will be up about the same YoY in the February Case-Shiller index. The NAR reported median prices were up 5.7% YoY in February, up from 4.9% YoY in January. ICE reported prices were up 5.7% YoY in February, down from 5.8% YoY in January, and Freddie Mac reported house prices were up 5.9% YoY in February, down from 6.2% YoY in January.
The FMHPI and the NAR median prices appear to be leading indicators for Case-Shiller. Based on recent monthly data, and the FMHPI, the YoY change in the Case-Shiller index will likely be about the same YoY in February as in January.
Price increases have slowed! Over the last 3 months, this FMHPI has only increased at a 1.7% annual rate.
Q1 GDP Tracking: Around 2%
by Calculated Risk on 4/12/2024 11:04:00 AM
From BofA:
Since our update last week, 1Q GDP tracking is down one-tenth to 1.9% q/q saar. [Apr 12th estimate]From Goldman:
emphasis added
We left our Q1 GDP tracking estimate unchanged at +2.5% (qoq ar) and our Q1 domestic final sales forecast unchanged at +2.6% (qoq ar). [Apr 10th estimate]And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2024 is 2.4 percent on April 10, down from 2.5 percent on April 4. [April 10th estimate]
Hotels: Occupancy Rate Increased 4.7% Year-over-year
by Calculated Risk on 4/12/2024 08:11:00 AM
U.S. hotel performance showed mixed results from the previous week but positive comparisons year over year, according to CoStar’s latest data through 6 April. ...The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.
31 March through 6 April 2024 (percentage change from comparable week in 2023):
• Occupancy: 64.1% (+4.7%)
• Average daily rate (ADR): US$156.96 (+2.1%)
• Revenue per available room (RevPAR): US$100.59 (+6.9%)
emphasis added
The red line is for 2024, black is 2020, blue is the median, and dashed light blue is for 2023. Dashed purple is for 2018, the record year for hotel occupancy.
Thursday, April 11, 2024
Realtor.com Reports Active Inventory UP 30.4% YoY; New Listings Up 30.1% YoY
by Calculated Risk on 4/11/2024 02:11:00 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 March, Realtor.com reported inventory was up 23.5% YoY, but still down almost 38% compared to March 2017 to 2019 levels.
Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View—Data Week Ending April 6, 2024
• Active inventory increased, with for-sale homes 30.4% above year ago levels.Here is a graph of the year-over-year change in inventory according to realtor.com.
For an 22nd straight week, active listings registered above prior year level, which means that today’s home shoppers are able to consider more options for existing homes for sale. However, the number of homes on the market is still down 37.9% compared to what was typical in 2017 to 2019.
• New listings–a measure of sellers putting homes up for sale–were up this week, by 30.1% from one year ago.
Listing activities rebounded significantly after a dip during the Easter holiday, reaching the highest growth rate after April 2021.However, it’s crucial to acknowledge that some of this increase can be attributed to the reduced number of listings during this same week last year, likely due to the impact of the Easter holiday.
Inventory was up year-over-year for the 22nd consecutive week following 20 consecutive weeks with a YoY decrease in inventory.
2nd Look at Local Housing Markets in March
by Calculated Risk on 4/11/2024 10:44:00 AM
Today, in the Calculated Risk Real Estate Newsletter: 2nd Look at Local Housing Markets in March
A brief excerpt:
NOTE: The tables for active listings, new listings and closed sales all include a comparison to March 2019 for each local market (some 2019 data is not available).There is much more in the article.
This is the second look at several early reporting local markets in March. I’m tracking about 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.
Closed sales in March were mostly for contracts signed in January and February when 30-year mortgage rates averaged 6.44% and 6.78%, respectively. This is down from the 7%+ mortgage rates in the August through November period (although rates are now back in the 7%+ range again).
...
And a table of March sales.
In March, sales in these markets were down 9.6% YoY. In February, these same markets were up 3.1% year-over-year Not Seasonally Adjusted (NSA).
Sales in most of these markets are down compared to January 2019.
...
Many more local markets to come!
Weekly Initial Unemployment Claims Decrease to 211,000
by Calculated Risk on 4/11/2024 08:30:00 AM
The DOL reported:
In the week ending April 6, the advance figure for seasonally adjusted initial claims was 211,000, a decrease of 11,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 221,000 to 222,000. The 4-week moving average was 214,250, a decrease of 250 from the previous week's revised average. The previous week's average was revised up by 250 from 214,250 to 214,500.The following graph shows the 4-week moving average of weekly claims since 1971.
emphasis added
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 decreased to 214,250.
The previous week was revised up.
Weekly claims were lower than the consensus forecast.
Wednesday, April 10, 2024
Thursday: Unemployment Claims, PPI
by Calculated Risk on 4/10/2024 07:15:00 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 225 thousand initial claims, up from 221 thousand last week.
• Also at 8:30 AM, The Producer Price Index for March from the BLS. The consensus is for a 0.2% increase in PPI, and a 0.3% increase in core PPI.