by Calculated Risk on 3/24/2021 04:12:00 PM

According to the CDC, 130.5 million doses have been administered. 17.9% of the population over 18 is fully vaccinated, and 33% of the population over 18 has had at least one dose.

And check out COVID Act Now to see how each state is doing. (updated link to new site)

Over 29,000 US deaths have been reported in March due to COVID.

Click on graph for larger image.

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

This data is from the CDC.

The 7-day average is 56,225, up from 55,262 yesterday, and well above the low following the summer surge of 35,000.

The second graph shows the number of people hospitalized.

This 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 33,001, down from 33,009 yesterday, but well above the post-summer surge low of 23,000.

by Calculated Risk on 3/24/2021 12:30:00 PM

Long term readers will remember me mentioning my friend "Jim the Realtor" in San Diego during the housing bubble and bust.

Jim wrote a post today about the number of offers for listings in San Diego: Number of Offers

[H]ere’s a review of properties that have gone pending this week ... They had EIGHTEEN OFFERS on this one, because it checks most of the boxes. Well-priced single-level with nice private yard that’s been tastefully renovated. The 17 other buyers will be battling it out for months on these!

CR Note: I'd call this a hot seller's market.

by Calculated Risk on 3/24/2021 09:42:00 AM

This will be something to watch as the economy recovers.

The Department of Transportation (DOT) reported:

Travel on all roads and streets changed by -11.3% (-28.4 billion vehicle miles) for January 2021 as compared with January 2020. Travel for the month is estimated to be 223.3 billion vehicle miles.

The seasonally adjusted vehicle miles traveled for January 2021 is 247.1 billion miles, a -9.6% (-26.2 billion vehicle miles) decline from January 2020. It also represents 1.2% increase (2.8 billion vehicle miles) compared with December 2020.

Cumulative Travel for 2021 changed by -11.3% (-28.4 billion vehicle miles). The cumulative estimate for the year is 223.3 billion vehicle miles of travel.
emphasis added

Click on graph for larger image.

This graph shows the rolling 12 month total vehicle miles driven to remove the seasonal factors.

Miles driven declined during the great recession, and the rolling 12 months stayed below the previous peak for a record 85 months.

Miles driven declined sharply in March, and really collapsed in April.

by Calculated Risk on 3/24/2021 07:00:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 2.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 19, 2021.

... The Refinance Index decreased 5 percent from the previous week and was 13 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 26 percent higher than the same week one year ago.

“The 30-year fixed mortgage rate increased to 3.36 percent last week and has now risen 50 basis points since the beginning of the year, in turn shutting off refinance incentives for many borrowers. Refinance activity dropped to its slowest pace since September 2020, with declines in both conventional and government applications. Mortgage rates have moved higher in tandem with Treasury yields, as the outlook for the U.S. economy continues to improve amidst the faster vaccine rollout and states easing pandemic-related restrictions,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase applications were strong over the week, driven both by households seeking more living space and younger households looking to enter homeownership. The purchase index increased for the fourth consecutive week and was up 26 percent from last year’s pace. The average purchase loan balance increased again, both by quickening home-price growth and a rise in higher-balance conventional applications.”

Added Kan, “Inadequate housing inventory continues to put upward pressure on home prices. As both home-price growth and mortgage rates continue this upward trend, we may see affordability challenges become more severe if new and existing supply does not significantly pick up.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.36 percent from 3.28 percent, with points increasing to 0.42 from 0.41 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.


The first graph shows the refinance index since 1990.

With low rates, the index remains elevated, but falling as rates rise.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is up 26% year-over-year unadjusted.

Note: For the next 8 or 9 weeks, the MBA index will be up sharply year-over-year since purchase activity collapsed in late March 2020 in the early weeks of the pandemic.

Note: Red is a four-week average (blue is weekly).

by Calculated Risk on 3/23/2021 09:11:00 PM

On Thursday, from 11:30 AM - 12:30 PM (PST), UCI Professor Chris Schwarz talks on the economy and financial markets. This webinar is free for all and brought to you by UCI's Paul Merage School of Business and Center for Investment and Wealth Management as well as the Newport Beach Chamber of Commerce.

Chris' presentations are great. This is free. Register here

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

• At 8:30 AM, Durable Goods Orders for February from the Census Bureau. The consensus is for a 0.8% increase in durable goods orders.

• At 10:00 AM, Testimony, Fed Chair Powell, Coronavirus Aid, Relief, and Economic Security Act, Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate

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

by Calculated Risk on 3/23/2021 05:13:00 PM

According to the CDC, 128.2 million doses have been administered. 17.6% of the population over 18 is fully vaccinated, and 32.4% of the population over 18 has had at least one dose.

And check out COVID Act Now to see how each state is doing. (updated link to new site)

Over 28,000 US deaths have been reported in March due to COVID.

Click on graph for larger image.

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

This data is from the CDC.

The 7-day average is 55,083, up from 54,241 yesterday, and well above the low following the summer surge of 35,000.

The second graph shows the number of people hospitalized.

This 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 33,009, down from 33,302 yesterday, but well above the post-summer surge low of 23,000.

by Calculated Risk on 3/23/2021 01:29:00 PM

As part of the new home sales report released this morning, the Census Bureau reported the number of homes sold by price and the average and median prices.

From the Census Bureau: "The median sales price of new houses sold in February 2021 was $349,400. The average sales price was $416,000."

The following graph shows the median and average new home prices.

Click on graph for larger image.

During the housing bust, the builders had to build smaller and less expensive homes to compete with all the distressed sales.  When housing started to recovery - with limited finished lots in recovering areas - builders moved to higher price points to maximize profits.

Then the average and median house prices have mostly moved sideways since 2017 due to home builders offering more lower priced homes.  Prices picked up again during the pandemic.

The average price in February 2021 was $416,000, up 7.7% year-over-year.  The median price was $349,400, up 5.3% year-over-year.

The second graph shows the percent of new homes sold by price.

Very few new homes sold were under $150K in February 2021 ("Less than 500 units" in February 2021, rounded down to zero).  This is down from 30% in 2002.  In general, the under $150K and under $200K brackets are going away.   

The $400K+ bracket increased significantly after the housing recovery started, but has been holding steady recently.  A majority of new homes (about 63%) in the U.S., are in the $200K to $400K range.

by Calculated Risk on 3/23/2021 12:07:00 PM

New home sales for February were reported at 775,000 on a seasonally adjusted annual rate basis (SAAR). Sales for the previous three months were revised up significantly.

This was well below consensus expectations for February.   The weather was harsh in February - and probably played a role in the decline in sales - but the large year-over-year declines were in the West and Northeast.  If the sales decline in February had been mostly weather related, we'd expect large declines in the mid-West and South regions (but sales were up year-over-year in those regions).

Still, the last nine months saw the highest sales rates since 2006.  Clearly low mortgages rates, low existing home supply, and favorable demographics have boosted sales.  A surging stock market has probably helped new home sales too.

Earlier: New Home Sales decrease to 775,000 Annual Rate in February.

Click on graph for larger image.

This graph shows new home sales for 2020 and 2021 by month (Seasonally Adjusted Annual Rate).

The year-over-year comparisons are easy in early 2021 - especially in March and April.

However, sales will likely be down year-over-year in August through October - since the selling season was delayed in 2020.

And on inventory: note that completed inventory (3rd graph) is near record lows, but inventory under construction is closer to normal.

On inventory, according to the Census Bureau:

"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."

Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed.

This graph shows the months of supply by stage of construction..

The inventory of completed homes for sale was at 40 thousand in February was just above the record low of 37 thousand in 2013 (when sales were much lower).  That is about 0.6 months of completed supply.

The inventory of new homes under construction, and not started, is about 4.2 months - close to normal.

by Calculated Risk on 3/23/2021 10:13:00 AM

The Census Bureau reports New Home Sales in February were at a seasonally adjusted annual rate (SAAR) of 775 thousand.

The previous three months were revised up.

Sales of new single-family houses in February 2021 were at a seasonally adjusted annual rate of 775,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 18.2 percent below the revised January rate of 948,000, but is 8.2 percent above the February 2020 estimate of 716,000.
emphasis added

Click on graph for larger image.

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

The last nine months saw the highest sales rates since 2006.   This was decent year-over-year growth.

The second graph shows New Home Months of Supply.

The months of supply increased in February to 4.8 months from 3.8 months in January.

The all time record high was 12.1 months of supply in January 2009. The all time record low is 3.5 months, most recently in October 2020.

This is in the normal range (about 4 to 6 months supply is normal).

"The seasonally-adjusted estimate of new houses for sale at the end of February was 312,000. This represents a supply of 4.8 months at the current sales rate. "

On inventory, according to the Census Bureau:

"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."

Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed.

The third graph shows the three categories of inventory starting in 1973.

The inventory of completed homes for sale is low, and the combined total of completed and under construction is a little lower than normal.

The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).

In February 2021 (red column), 64 thousand new homes were sold (NSA). Last year, 63 thousand homes were sold in February

The all time high for February was 109 thousand in 2005, and the all time low for February was 22 thousand in 2011.

This was well below expectations, however sales in the three previous months were revised up. I'll have more later today.

by Calculated Risk on 3/23/2021 09:03:00 AM

Note: Loans in forbearance are counted as delinquent in this survey, but those loans are not reported as delinquent to the credit bureaus.

From Black Knight: Black Knight’s First Look: Mortgage Delinquencies Rise for the First Time in Nine Months; Increase Largely Calendar-Driven but Bears Watching

• After eight consecutive months of improvement, the national mortgage delinquency rate rose in February from 5.85% to 6.0%

• The rise was largely calendar-related, as February is both a short month and ended on a Sunday – cutting the days on which payments can be processed – which has historically impacted performance metrics

• Delinquency rate increases were seen broadly across portfolios, geographies and asset classes

• The increase was primarily seen in early-stage delinquencies, while the number of loans 90 or more days past due but not yet in foreclosure (including those in active forbearance) saw a modest decline

• Prepayment activity edged upward in February as well, but recent 30-year interest rate increases are likely to put downward pressure on prepayment rates in the coming months

• Both foreclosure starts and active foreclosure inventory again hit new record lows, as recently extended foreclosure moratoriums continue to suppress activity
emphasis added

According to Black Knight's First Look report, the percent of loans delinquent increased 2.6% in February compared to January, and increased 83% year-over-year.

The percent of loans in the foreclosure process decreased 1.1% in February and were down 30% over the last year.

Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 6.00% in February, up from 5.85% in January.

The percent of loans in the foreclosure process decreased slightly in February to 0.32%, from 0.32% in January.

The number of delinquent properties, but not in foreclosure, is up 1,449,000 properties year-over-year, and the number of properties in the foreclosure process is down 71,000 properties year-over-year.

Black Knight: Percent Loans Delinquent and in Foreclosure Process
	Feb  2021	Jan 2020	Feb 2020	Feb 2019
Delinquent	6.00%	5.85%	3.28%	3.89%
In Foreclosure	0.32%	0.32%	0.45%	0.51%
Number of properties:
Number of properties that are delinquent, but not in foreclosure:	3,186,000	3,130,000	1,737,000	2,019,000
Number of properties in foreclosure pre-sale inventory:	168,000	171,000	239,000	264,000
Total Properties	3,354,000	3,301,000	1,976,000	2,284,000