by Calculated Risk on 11/12/2021 08:29:00 AM

This data is as of November 9th.

From Andy Walden at Black Knight: Mortgage Loans in Forbearance Drop Below 2% Entering November

Forbearance plan exit volumes increased week-over-week heading into November as the share of mortgage loans in forbearance fell below 2% for the first time since the early stages of the pandemic.

According to our McDash Flash daily mortgage performance dataset, the number of loans in active forbearance fell 123,000 (-10.8%). The week’s strongest declines were among loans held in bank portfolios and private label securities, which recorded a reduction of 59,000 (-15.9%). FHA/VA plans also showed significant improvement, declining by 48,000 (-11.3), while GSE loans in forbearance plans decreased by 16,000 (-4.8%).

As of November 9, 1.01 million mortgage holders remain in COVID-19 related forbearance plans, representing 1.9% of all active mortgages, including 1.2% of GSE, 3.1% of FHA/VA and 2.4% of portfolio/PLS loans.

Click on graph for larger image.

Nearly 300,000 borrowers have left their plans over the past two weeks down from 455,000 over the same two-week period last month as we hit the downslope of exit activity. That said, more than 250,000 plans are still listed with October/November reviews for extension/removal. Half of those are expected to reach final expiration, which could lead to continued improvement, albeit at a slower pace, in the weeks ahead.

Plan entries were down 9% from a week ago, logging one of the lowest weeks in terms of new entries since the onset of the pandemic.
emphasis added

by Calculated Risk on 11/11/2021 08:01:00 PM

Friday:
• At 10:00 AM ET, Job Openings and Labor Turnover Survey for September from the BLS. Jobs openings decreased in August to 10.439 million from 11.098 million in July.

• Also at 10:00 AM, University of Michigan's Consumer sentiment index (Preliminary for November).

by Calculated Risk on 11/11/2021 01:36:00 PM

Today, in the Real Estate Newsletter: 3rd Look at Local Housing Markets in October

Excerpt:

This is the third look at local markets in October. This update adds Albuquerque, Atlanta, Colorado, Houston, Jacksonville, Minnesota, Portland, Sacramento and Santa Clara.
...
Here is a summary of active listings for the housing markets that have reported so far in October. For these markets, inventory was down 7.9% in October MoM from September, and down 25.1% YoY.

Of the markets that have reported so far, inventories in Jacksonville and San Diego are at record lows. Sacramento is the only market so far with inventory up YoY in October.

Inventory almost always declines seasonally in October, so the MoM decline is not a surprise. Last month, these markets were down 22.9% YoY, so the YoY decline in October is slightly larger than in September. This is not indicating a slowing market.

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

by Calculated Risk on 11/11/2021 11:12:00 AM

Note: Since occupancy declined sharply at the onset of the pandemic, CoStar is comparing to 2019.

From CoStar: STR: Weekly US Hotel Occupancy Drops Below 60%

U.S. hotel performance increased slightly from the previous week, according to STR‘s latest data through November 6.

October 31 through November 6, 2021 (percentage change from comparable week in 2019*):

• Occupancy: 59.8% (-13.0%)
• Average daily rate (ADR): $128.14 (-3.2%)
• Revenue per available room (RevPAR): $76.61 (-15.8%)

*Due to the steep, pandemic-driven performance declines of 2020, STR is measuring recovery against comparable time periods from 2019.
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, dashed purple is 2019, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020).

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

The occupancy rate will now decline seasonally into the new year.

by Calculated Risk on 11/11/2021 08:50:00 AM

This morning, in the Real Estate Newsletter: "The deal of the Century ..."

A few real estate words of wisdom from my dad, and a salute to all veterans!

by Calculated Risk on 11/10/2021 04:20:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 434,486,889, as of a week ago 423,942,794, or 1.51 million doses per day.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	58.5%	58.1%	≥70.0%1
Fully Vaccinated (millions)	194.4	192.7	≥2321
New Cases per Day3🚩	74,584	70,960	≤5,0002
Hospitalized3	39,852	42,552	≤3,0002
Deaths per Day3	1,078	1,125	≤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).  Note: COVID will probably stay endemic (at least for some time).

KUDOS to the residents of the 5 states that have achieved 70% of total population fully vaccinated: Vermont at 71.8%, Rhode Island, Connecticut, Maine, and Massachusetts at 70.2% .

KUDOS also to the residents of the 16 states and D.C. that have achieved 60% of total population fully vaccinated: New York at 67.3%, , New Jersey, Maryland, Washington, Virginia, New Hampshire, Oregon, District of Columbia, New Mexico, Colorado, California, Minnesota, Pennsylvania,  Illinois, Delaware, Florida, and Hawaii at 60.2%.

The following 19 states have between 50% and 59.9% fully vaccinated: Wisconsin at 58.8%, Nebraska, Iowa, Utah, Michigan, Texas, Kansas, Arizona, Nevada, South Dakota, North Carolina, Alaska, Ohio, Kentucky, Montana, Oklahoma, South Carolina, Missouri and Indiana at 50.1%.

Next up (total population, fully vaccinated according to CDC) are Georgia at 48.8%, Tennessee at 48.7%, Arkansas at 48.5%, Louisiana at 48.1% and North Dakota at 48.0%.

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 11/10/2021 02:01:00 PM

Today, in the Real Estate Newsletter: Inventory will Tell the Tale

Excerpt:

We are being flooded with housing stories. Will house prices decline or will price growth just slow? Does the US have a housing shortage? If mortgage rates rise to 4%, will that “halt the housing market” as Ivy Zelman said on CNBC?

Although my crystal ball is cloudy at this point, I believe inventory will tell the tale. That is why I watch inventory closely. Not just the monthly existing home sales report from the National Association of Realtors (NAR) and the monthly new home sales report from the Census Bureau. I also use weekly data from Altos Research (See Altos’ Mike Simonsen’s weekly presentation on YouTube).

And I track inventory and sales for 30+ local markets each month.
...
My Spidey senses are tingling, however it isn't obvious why this time - or what the outcome will be.

But I believe one thing is certain: inventory will tell the tale!

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

by Calculated Risk on 11/10/2021 11:56:00 AM

The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.6% in October. The 16% trimmed-mean Consumer Price Index increased 0.7% in October. "The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report".

Note: The Cleveland Fed released the median CPI details for September here. "Fuel oil and other fuels" were up 193% annualized.

Note that Owners' Equivalent Rent and Rent of Primary Residence account for almost 1/3 of median CPI, and these measures were up over 5% annualized in October.

Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. 

On a year-over-year basis, the median CPI rose 3.1%, the trimmed-mean CPI rose 4.1%, and the CPI less food and energy rose 4.6%. Core PCE is for September and increased 3.6% year-over-year.

by Calculated Risk on 11/10/2021 10:11:00 AM

From the MBA: Mortgage Delinquencies Decrease in the Third Quarter of 2021

The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 4.88 percent of all loans outstanding at the end of the third quarter of 2021, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

For the purposes of the survey, MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage. The delinquency rate was down 59 basis points from the second quarter of 2021 and down 277 basis points from one year ago.

“For the fifth consecutive quarter, the mortgage delinquency rate declined, commensurate with a decline in the U.S. unemployment rate over the same time period,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The improvement was driven entirely by a decline in later-stage delinquent loans – those loans that are 90 days or past due, but not in foreclosure. By the end of the third quarter, many borrowers were approaching the 18-month expiration point of their forbearance terms and were being placed in permanent home retention solutions, such as modifications and loan deferrals.”

Walsh added, “Once these borrowers entered permanent post-forbearance workouts and resumed payments, they moved from delinquent to current status.”
emphasis added

Click on graph for larger image.

This graph shows the percent of loans delinquent by days past due.  Overall delinquencies decreased in Q3.

From the MBA:

Compared to last quarter, the seasonally adjusted mortgage delinquency rate decreased for all loans outstanding. By stage, the 30-day delinquency rate increased 10 basis points to 1.51 percent, the 60-day delinquency rate remained unchanged at 0.52 percent, and the 90-day delinquency bucket decreased 68 basis points to 2.85 percent.
...
The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the third quarter was 0.46 percent, down 5 basis points from the second quarter of 2021 and 13 basis points lower than one year ago. This is the lowest foreclosure inventory rate since the fourth quarter of 1981. The percentage of loans on which foreclosure actions were started in the third quarter fell by 1 basis point to 0.03 percent, which is the lowest starts rate reported in the survey and consistent with the last three quarters of 2020.

This sharp increase last year in the 90-day bucket was due to loans in forbearance (included as delinquent, but not reported to the credit bureaus).

The percent of loans in the foreclosure process declined further, and was at the lowest level since 1981.

by Calculated Risk on 11/10/2021 08:37:00 AM

The DOL reported:

In the week ending November 6, the advance figure for seasonally adjusted initial claims was 267,000, a decrease of 4,000 from the previous week's revised level. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The previous week's level was revised up by 2,000 from 269,000 to 271,000. The 4-week moving average was 278,000, a decrease of 7,250 from the previous week's revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week's average was revised up by 500 from 284,750 to 285,250.
emphasis added

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 decreased to 278,000.

The previous week was revised up.

Regular state continued claims increased to 2,160,000 (SA) from 2,101,000 (SA) the previous week.

Weekly claims were above consensus forecast.