by Calculated Risk on 4/08/2021 04:09:00 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,
2) new cases are under 5,000 per day, and
3) hospitalizations are below 3,000.

According to the CDC, 174.9 million doses have been administered. 25.6% of the population over 18 is fully vaccinated, and 43.2% of the population over 18 has had at least one dose (111.4 million people have had at least one dose).

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

Almost 5,000 US deaths were reported so far in April due to COVID.

Click 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 64,151, up from 63,407 yesterday, and close to the summer surge peak of 67,337 on July 23, 2020.

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 34,883, up from 34,613 reported yesterday, and well above the post-summer surge low of 23,000.

by Calculated Risk on 4/08/2021 02:38:00 PM

Note: I'm posting data for many local markets around the U.S. The story is the same everywhere ... inventory is at record lows.

From the New Hampshire Realtors for the entire state:

Closed sales Single family and Condos in March 2021 were 1,481, down 0.9% from 1,494 in March 2020.

Active Listings Single family and Condos in March 2021 were 1,576, down 64.3% from 4,414 in March 2020.

Months of Supply for Single family and Condos in March 2021 was 0.7 months, down from 2.2 months in March 2020.

by Calculated Risk on 4/08/2021 01:22:00 PM

From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission.

When the pandemic first began around mid-March 2020, firms across the country and across industries shut down or drastically reduced operations, leading to sharply lower volumes for many rail traffic categories. A year later, rail traffic has rebounded, leading to year-over-year volume percentage gains that in some cases reflect easier comparisons more than underlying market factors.

March’s rail traffic numbers are impacted by the easier comparisons. Total U.S. carloads were up 4.1% in March 2021 over March 2020, their first year-over-year monthly gain since January 2019. Total carloads in the last two weeks of March were up 7.3% over the comparable weeks of 2020.

For intermodal, U.S. volume in March 2021 was up 24.0% over March 2020. That’s the biggest monthly gain ever for intermodal; it includes a 28% increase in the last two weeks of March. March’s intermodal gains are not solely a function of easy comparisons, though: March 2021 was the highest volume March ever for intermodal and the sixth-best intermodal month overal
emphasis added

Click on graph for larger image.

This graph from the Rail Time Indicators report shows the six week average of U.S. Carloads in 2019, 2020 and 2021:

Total carloads averaged 231,232 in March 2021. That’s a higher weekly average than March 2020, but otherwise it’s the lowest weekly average for any March since 1988, when our data begin. For the first three months of 2021, total U.S. rail carloads were 2.6% (77,267 carloads) lower than they were in the first three months of 2020.

The second graph shows the six week average of U.S. intermodal in 2019, 2020 and 2021: (using intermodal or shipping containers):

U.S. intermodal originations totaled 1.43 million in March 2021, up 24.0%, or 276,781 containers and trailers, over March 2020 and up 8.0% over March 2019. March 2021 marks the eighth-straight year-over-year gain for intermodal following 18 straight declines.

Note that rail traffic was weak prior to the pandemic, however intermodal has come back strong.

by Calculated Risk on 4/08/2021 11:30:00 AM

Note: The year-over-year occupancy comparisons are easy, since occupancy declined sharply at the onset of the pandemic. However, occupancy is still down significantly from normal levels.

The occupancy rate is down 16% compared to the same week in 2019.

From CoStar: STR: US Hotel Occupancy Flat From Prior Week

U.S. hotel occupancy remained flat from the previous week, while the country’s ADR and RevPAR levels were its highest since the beginning of March 2020, according to STR‘s latest weekly data through April 3, 2021.

March 28 through April 3, 2021:

• Occupancy: 57.9%
• Average daily rate (ADR): US$112.76
• Revenue per available room (RevPAR): US$65.33

The occupancy level was 1 point below the pandemic peak reached two weeks prior. The RevPAR value represented 73.1% of the comparable 2019 level, which is the closest the U.S. has come to RevPAR recovery territory in STR’s Market Recovery Monitor.
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Click on graph for larger image.

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 prior to 2020).

Occupancy has increased to 2009 levels - and 2009 was horrible for hotels.

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

by Calculated Risk on 4/08/2021 08:38:00 AM

The DOL reported:

In the week ending April 3, the advance figure for seasonally adjusted initial claims was 744,000, an increase of 16,000 from the previous week's revised level. The previous week's level was revised up by 9,000 from 719,000 to 728,000. The 4-week moving average was 723,750, an increase of 2,500 from the previous week's revised average. The previous week's average was revised up by 2,250 from 719,000 to 721,250.
emphasis added

This does not include the 151,752 initial claims for Pandemic Unemployment Assistance (PUA) that was down from 237,065 the previous week.

The following graph shows the 4-week moving average of weekly claims since 1971.

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 increased to 723,750.

The previous week was revised up.

Regular state continued claims decreased to 4,067,784 (SA) from 4,200,238 (SA) the previous week.

Note: There are an additional 7,553,628 receiving Pandemic Unemployment Assistance (PUA) that increased from 7,350,339 the previous week (there are questions about these numbers). This is a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance.  And an additional 5,633,595 receiving Pandemic Emergency Unemployment Compensation (PEUC) up from 5,516,487.

Weekly claims were higher than the consensus forecast.

by Calculated Risk on 4/07/2021 09:00:00 PM

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for a decrease to 700 thousand from 719 thousand last week.

• AT 12:00 PM, Discussion, Fed Chair Jerome Powell, The Global Economy, At the International Monetary Fund Debate on the Global Economy (Watch live)

by Calculated Risk on 4/07/2021 04:50:00 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,
2) new cases are under 5,000 per day, and
3) hospitalizations are below 3,000.

According to the CDC, 171.5 million doses have been administered. 24.9% of the population over 18 is fully vaccinated, and 42.4% of the population over 18 has had at least one dose (109.4 million people have had at least one dose).

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

Over 4,000 US deaths were reported so far in April due to COVID.

Click 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 63,407, down from 63,617 yesterday, and close to the summer surge peak of 67,337 on July 23, 2020.

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 34,613, up from 34,279 reported yesterday, and well above the post-summer surge low of 23,000.

by Calculated Risk on 4/07/2021 03:39:00 PM

From the Fed: Minutes of the Federal Open Market Committee, March 16-17, 2021. A few excerpts:

In their discussion of current conditions, participants noted that the COVID-19 pandemic was causing tremendous human and economic hardship across the United States and around the world. Following a moderation in the pace of the recovery, indicators of economic activity and employment had turned up recently, although the sectors most adversely affected by the pandemic remained weak. Inflation continued to run below 2 percent. Overall financial conditions remained accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. Participants noted that the path of the economy would depend significantly on the course of the virus, including progress on vaccinations, and that the ongoing public health crisis would continue to weigh on economic activity, employment, and inflation and posed considerable risks to the economic outlook.
...
Participants judged that the Committee's current guidance for the federal funds rate and asset purchases was serving the economy well. They noted that a benefit of the outcome-based guidance was that it did not need to be recalibrated often in response to incoming data or the evolving outlook. Participants also noted the importance of communicating to the public that the existing guidance, together with the new monetary policy framework as delineated in the revised Statement on Longer-Run Goals and Monetary Policy Strategy, meant that the path of the federal funds rate and the balance sheet depend on actual progress toward reaching the Committee's maximum-employment and inflation goals. In particular, various participants noted that changes in the path of policy should be based primarily on observed outcomes rather than forecasts.

Participants agreed that overall financial conditions were accommodative. They noted that the Federal Reserve's asset purchases since last March had materially eased financial conditions and were providing substantial support to the economy. Participants noted that it would likely be some time until substantial further progress toward the Committee's maximum-employment and price-stability goals would be realized and that, consistent with the Committee's outcome-based guidance, asset purchases would continue at least at the current pace until then. A number of participants highlighted the importance of the Committee clearly communicating its assessment of progress toward its longer-run goals well in advance of the time when it could be judged substantial enough to warrant a change in the pace of asset purchases. The timing of such communications would depend on the evolution of the economy and the pace of progress toward the Committee's goals.
emphasis added

by Calculated Risk on 4/07/2021 01:39:00 PM

Note: Inventory is down sharply in the Northwest almost everywhere except Seattle. And inventory is low in Seattle too, but was even lower a year ago.

The Northwest Multiple Listing Service reported Northwest MLS brokers say bidding wars, escalating prices, and buyer fatigue are widespread

“There’s no April fooling when it comes to how hot the housing market is right now,” commented J. Lennox Scott, chairman and CEO of John L Scott Real Estate. “In King, Snohomish, Pierce and Kitsap counties, the current spring market we’re seeing is one of the best on record.”

James Young, director of the Washington Center for Real Estate Research at the University of Washington, agreed, noting March marked the first post-COVID/pre-COVID comparison. “It is very difficult to compare year-on-year results once lockdown started in late March 2020,” he stated.

“The drop in the number of active listings between now and last year is extraordinary,” Young exclaimed. NWMLS statistics show a 55.9% decline in total active listings, shrinking from 9,418 at the end of March 2020 to 4,153 at month end. Young noted the decrease is even more pronounced in “peripheral counties.” Six counties (Clallam, Clark, Island, Kittitas, Mason, and San Juan) experienced year-over-year declines of 69% or higher, according to the latest report from Northwest MLS.
emphasis added

The press release is for the Northwest MLS area. There were 7,803 closed sales in March 2021, up 15.9% from 6,735 sales in March 2020.  Active inventory for the Northwest is down 55.9%.

In King County, sales were up 20.7% year-over-year, and active inventory was down 37.1% year-over-year.

In Seattle, sales were up 33.5% year-over-year, and inventory was UP 7.3% year-over-year. (inventory in Seattle was extremely low last year).  This puts the months-of-supply in Seattle at just 0.95 months.

by Calculated Risk on 4/07/2021 11:09:00 AM

Currently "For Sale" housing inventories are at record low levels. What could lead to more supply in the short term? 

Here are the organic reasons.

First, as the pandemic subsides, potential sellers will be more willing to list their homes (and allow strangers into their homes).  So I expect more inventory later this year (See Some thoughts on Housing Inventory)

Second, an increase in mortgage rates (if this continues) would likely slow demand (usually demand picks up when interest rates first start to increase, as buyers are afraid of missing out on low rates).  But if 30 year fixed rate mortgages move up closer to 4% (from the current 3.34%), this will probably slow demand.

Third, homebuilders are responding to demand, and ramping up production.

What else could lead to more supply?

Government policy could help.

In many higher priced areas, people stay in their large homes to avoid paying capital gains.   A one time waiving of all capital gains on a primary residence (for seniors), would bring more supply to the market.   These seniors could then move down or into retirement communities.

Some people would argue this would only help wealthier people, but that is incorrect.

Click on graph for larger image.

Supply at the higher end, would allow people to move up - and that would free up mid-level homes, and down the housing chain.  (See this post from 2009 on the housing chain)

I put this graphic together in 2007 to explain the missing move up buyer, but it would also apply if we could free up higher end homes.

Another policy that would help would be to offer a tax break to landlords of single family homes and condos, if they sell a rental property this year.

A large number of single family home and condos were converted to rental units. In 2015, housing economist Tom Lawler estimated there were 17.5 million renter occupied single family homes in the U.S., up from 10.7 million in 2000. Many of these houses were purchased by investors. Most of these rental conversions were at the lower end, and that limited the supply for first time buyers.

A limited time tax break for these landlords would free up homes for first time buyers.

I expect inventory to increase later this year, but policy could help.