by Calculated Risk on 11/20/2021 02:58:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• The "Household Conundrum" And Early Read on Existing Home Sales in October

• 5th Look at Local Housing Markets in October No Signs of Slowing

• Housing Predictions: Guesses and the Data What could cause inventories to increase?

• Most Housing Units Under Construction Since 1974 Housing Starts Decreased to 1.520 Million Annual Rate in October

• October California Home Sales Sales Down 10.4% YoY. Active Listings down 18.3%

• 4th Look at Local Housing Markets in October Adding Des Moines, Maryland, South Carolina, and Washington, D.C.

This is usually published several times a week, and provides more in-depth analysis of the housing market.

The blog will continue as always!

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by Calculated Risk on 11/20/2021 08:11:00 AM

The key reports this week are October New Home sales, Existing Home sales, the second estimate of Q3 GDP, and Personal Income and Outlays for October.

For manufacturing, the Richmond Fed manufacturing survey will be released this week.

----- Monday, November 22nd -----
8:30 AM ET: Chicago Fed National Activity Index for October. This is a composite index of other data.

10:00 AM: Existing Home Sales for October from the National Association of Realtors (NAR). The consensus is for 6.20 million SAAR, down from 6.29 million in September.

The graph shows existing home sales from 1994 through the report last month.

Housing economist Tom Lawler expects the NAR to report 6.34 million SAAR.

----- Tuesday, November 23rd -----
10:00 AM: Richmond Fed Survey of Manufacturing Activity for November.

----- Wednesday, November 24th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 270 thousand initial claims, up from 268 thousand last week.

8:30 AM: Gross Domestic Product, 3nd quarter 2020 (Second estimate). The consensus is that real GDP increased 2.1% annualized in Q3, up from 2.0% in the advance estimate of GDP.

8:30 AM: Durable Goods Orders for October from the Census Bureau. The consensus is for a 0.2% increase in durable goods orders.

10:00 AM: Personal Income and Outlays for October. The consensus is for a 0.2% increase in personal income, and for a 1.0% increase in personal spending. And for the Core PCE price index to increase 0.4%.

10:00 AM: New Home Sales for October from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the sales rate for last month.

The consensus is for 801 thousand SAAR, up from 800 thousand in September.

10:00 AM: University of Michigan's Consumer sentiment index (Final for November). The consensus is for a reading of 66.8.

2:00 PM: FOMC Minutes, Meeting of November 2-3, 2021

----- Thursday, November 25th -----
All US markets will be closed in observance of the Thanksgiving Day Holiday.

----- Friday, November 26th -----
The NYSE and the NASDAQ will close early at 1:00 PM ET.

by Calculated Risk on 11/19/2021 07:26:00 PM

Today, in the Real Estate Newsletter: The "Household Conundrum"

Excerpt:

Housing economist Tom Lawler discusses the “household conundrum” - why it is unclear how many households there are in the U.S..
...
One of the challenges facing housing analysts in trying to assess the current and future state of the US housing market is the lack of timely and reliable estimates of the number of and characteristics of US households. This challenge has become even more acute since the onset of the pandemic, as significant declines in response rates to government surveys of households have adversely affected the accuracy of already imperfect household estimates. The lack of reliable household data makes it difficult to assess how much of the astonishing strength in the housing market since the middle of last year has been related to “demographics,” as opposed to behavioral and preference changes associated with the pandemic and, more recently, the surge in investor purchases of single-family homes.
...
While HVS household estimates have always been volatile (partly related to the small sample size of the CPS), and have not matched decennial Census results, the estimates produced since the onset of the pandemic have been … well … ridiculous. Below is a table of the HVS estimates of total and owner-occupied households.

As the table indicates, the number of households estimated from the HVS exploded upward following the onset of the pandemic, and the number of owner-occupied households rose by an astonishing and completely unbelievable amount. And following that surge the HVS estimates of total households fell, and the number of owner-occupied households plummeted!

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by Calculated Risk on 11/19/2021 07:19:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 448,155,906, as of a week ago 437,352,000, or 1.54 million doses per day.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	59.0%	58.7%	≥70.0%1
Fully Vaccinated (millions)	195.9	194.7	≥2321
New Cases per Day3🚩	94,260	73,366	≤5,0002
Hospitalized3🚩	40,579	40,221	≤3,0002
Deaths per Day3🚩	1,069	1,024	≤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 72.4%, Rhode Island, Connecticut, Maine, and Massachusetts at 70.6% .

KUDOS also to the residents of the 16 states and D.C. that have achieved 60% of total population fully vaccinated: New York at 67.9%, New Jersey, Maryland, Washington, Virginia, New Hampshire, Oregon, District of Columbia, New Mexico, Colorado, California, Minnesota, Pennsylvania,  Illinois, Delaware, Florida, and Hawaii at 60.6%.

The following 19 states have between 50% and 59.9% fully vaccinated: Wisconsin at 59.1%, Nebraska, Iowa, Utah, Michigan, Texas, Kansas, Arizona, Nevada, South Dakota, North Carolina, Alaska, Ohio, Kentucky, Montana, Oklahoma, South Carolina, Missouri and Indiana at 50.4%.

Next up (total population, fully vaccinated according to CDC) are Tennessee at 49.2%, Georgia at 49.1%, Arkansas at 48.9%, Louisiana at 48.5% and North Dakota at 48.4%.

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 11/19/2021 04:00:00 PM

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 6.34 million in October, up 0.8% from September’s preliminary pace and down 5.8% from last October’s seasonally adjusted pace. Unadjusted sales should show a larger YOY decline, reflecting this October’s lower business day count relative to last October’s.

Local realtor reports, as well as reports from national inventory trackers, suggest that the YOY decline in the inventory of existing homes for sale was slightly larger than was the case in September.

Finally, local realtor/MLS reports suggest the median existing single-family home sales price last month was up by about 12.9% from last October.

CR Note: The National Association of Realtors (NAR) is scheduled to release October existing home sales on Monday, November 22, 2021 at 10:00 AM ET. The consensus is for 6.20 million SAAR.   Take the over.

Note that the NAR reported median prices were up 23.6% Year-over-year (YoY) in May, 23.4% in June, 17.8% in July, 14.9% in August and 13.3% in September. And it appears the YoY growth slowed a little more in October.

by Calculated Risk on 11/19/2021 12:55:00 PM

Today, in the Real Estate Newsletter: 5th Look at Local Housing Markets in October

Excerpt:

This is the fifth look at local markets in October. This update adds Alabama, Austin, Boston, Charlotte, Indiana, Minneapolis, Phoenix, and Rhode Island.
...
Here is a summary of active listings for the housing markets that have reported so far in October. For these markets, inventory was down 6.5% in October MoM from September, and down 24.1% YoY.

Of the markets that have reported so far, inventories in Jacksonville and San Diego are at record lows. Sacramento and Washington, D.C. are the only markets so far with inventory up YoY in October (Austin is essentially unchanged YoY).

Inventory almost always declines seasonally in October, so the MoM decline is not a surprise. Last month, these markets were down 22.1% YoY, so the YoY decline in October is slightly larger than in September. This is not indicating a slowing market.

In California, the C.A.R. reported inventory was down 18.3% YoY, but this isn’t included in the table below since C.A.R. doesn’t report monthly numbers.

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by Calculated Risk on 11/19/2021 11:18:00 AM

From BofA:

We continue to track 6% qoq saar for 4Q GDP growth. [November 19 estimate]
emphasis added

From Goldman Sachs

We left our Q4 GDP tracking estimate unchanged on a rounded basis at +5.0% (qoq ar). [November 17 estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2021 is 8.2 percent on November 17, down from 8.7 percent on November 16. [November 17 estimate]

by Calculated Risk on 11/19/2021 08:14:00 AM

This data is as of November 16th.

From Andy Walden at Black Knight: Mid-November Forbearance Exits Low and Slow

In what has become a familiar pattern, the number of active forbearance plans held relatively steady entering the third week of November.

According to our McDash Flash daily forbearance tracking dataset, the number of active forbearance plans increased by 2,000 (0.2%) this week. Modest declines among FHA/VA loans (-2,000) and GSE (-1,000) were offset by a 5,000 rise in plan volumes among portfolio and PLS mortgages as plan activity hit its lowest level since mid-August. Start volumes edged higher, driven by an increase in new plans among FHA/VA loans, which hit their highest level since early October.

As of November 16, 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 held and privately securitized loans.

Click on graph for larger image.

Overall, the number of forbearance plans is still down by 230,000 (-18%) from the same time last month, with the potential for additional improvements as we enter December. More than 200,000 plans remain with October/November reviews for extension/removal and nearly 300,000 more are slated for review in December – half of which are expected to be reaching their final expirations.
emphasis added

by Calculated Risk on 11/18/2021 08:18:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 446,250,342, as of a week ago 434,486,889, or 1.47 million doses per day.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	58.9%	58.5%	≥70.0%1
Fully Vaccinated (millions)	195.7	194.4	≥2321
New Cases per Day3🚩	88,482	76,223	≤5,0002
Hospitalized3🚩	40,579	40,221	≤3,0002
Deaths per Day3	1,032	1,057	≤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 72.2%, Rhode Island, Connecticut, Maine, and Massachusetts at 70.6% .

KUDOS also to the residents of the 16 states and D.C. that have achieved 60% of total population fully vaccinated: New York at 67.8%, New Jersey, Maryland, Washington, Virginia, New Hampshire, Oregon, District of Columbia, New Mexico, Colorado, California, Minnesota, Pennsylvania,  Illinois, Delaware, Florida, and Hawaii at 60.5%.

The following 19 states have between 50% and 59.9% fully vaccinated: Wisconsin at 59.1%, Nebraska, Iowa, Utah, Michigan, Texas, Kansas, Arizona, Nevada, South Dakota, North Carolina, Alaska, Ohio, Kentucky, Montana, Oklahoma, South Carolina, Missouri and Indiana at 50.3%.

Next up (total population, fully vaccinated according to CDC) are Tennessee at 49.1%, Georgia at 49.1%, Arkansas at 48.8%, Louisiana at 48.4% and North Dakota at 48.3%.

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 11/18/2021 04:50:00 PM

Notes: The expansion to the Panama Canal was completed in 2016 (As I noted a few years ago), and some of the traffic that used the ports of Los Angeles and Long Beach is probably going through the canal. This might be impacting TEUs on the West Coast.

Also, incoming port traffic is backed up significantly in the LA area with numerous ships at anchor waiting to unload.

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Click on graph for larger image.

On a rolling 12 month basis, inbound traffic was down 0.5% in October compared to the rolling 12 months ending in September.   Outbound traffic was down 1.4% compared to the rolling 12 months ending the previous month.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year.

2021 started off incredibly strong for imports - and with the backlog of ships, will probably continue strong into 2022 (no break again in February or March).

Imports were down 6% YoY in October (recovered last year following the early months of the pandemic), and exports were down 15% YoY.