by Calculated Risk on 3/30/2022 07:00:00 AM

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

Mortgage applications decreased 6.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 25, 2022.

... The Refinance Index decreased 15 percent from the previous week and was 60 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 10 percent lower than the same week one year ago.

“Mortgage rates jumped to their highest level in more than three years last week, as investors continue to price in the impact of a more restrictive monetary policy from the Federal Reserve. Not surprisingly, refinance application volume declined further, as fewer borrowers have an incentive to apply at rates that are significantly higher than a year ago. Refinance application volume is now 60 percent below last year’s levels, in line with MBA’s forecast for 2022,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Even with the ongoing climb in rates, purchase application volumes were little changed last week. This is particularly auspicious, as we are now in the beginning of the spring homebuying season, and those shopping for homes are struggling with not only higher and more volatile mortgage rates, but also an ongoing shortage of homes on the market. Given these hurdles, it appears to be promising news that purchase application volume has not declined, as many potential buyers are likely feeling the squeeze in their purchasing power from the jump in rates.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.80 percent from 4.50 percent, with points decreasing to 0.56 from 0.59 (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 higher mortgage rates, the refinance index has declined sharply over the last several months.

The refinance index is at the lowest level since May 2019.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 10% year-over-year unadjusted.

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

by Calculated Risk on 3/29/2022 09:01:00 PM

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

• At 8:15 AM, The ADP Employment Report for March. This report is for private payrolls only (no government). The consensus is for 438,000 payroll jobs added in March, down from 475,000 added in February.

• At 8:30 AM, Gross Domestic Product, 4th quarter 2021 (Third estimate). The consensus is that real GDP increased 7.1% annualized in Q4.

On COVID (focus on hospitalizations and deaths):

COVID Metrics
	Now	Week Ago	Goal
Percent fully Vaccinated	65.5%	---	≥70.0%1
Fully Vaccinated (millions)	217.5	---	≥2321
New Cases per Day3	26,190	27,282	≤5,0002
Hospitalized3	12,934	16,599	≤3,0002
Deaths per Day3	700	862	≤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.

Click on graph for larger image.

This graph shows the daily (columns) and 7-day average (line) of deaths reported.

New cases, hospitalizations and deaths are declining.

by Calculated Risk on 3/29/2022 05:21:00 PM

From Matthew Graham at MortgageNewsDaily: Here We Go Again: Mortgage Rates Making Another Recovery Attempt

Now today, we have another improvement in the bond market that looks quite similar to the one seen last week. This one arose due to hopes for some sort of de-escalation in Ukraine. The thought process is that de-escalation helps oil prices drop, thus easing upward pressure on inflation and allowing the Fed to be slightly less aggressive in making policy changes that are unfriendly to rates.

If recent instances of hope and the subsequent crushing of those hopes are any guide, this could certainly be another head fake. There's no way to tell how likely that is. What we can say is that it would take several more days with bigger improvements to alter the broader rising rate trend.

The average lender was closest to 5.0% on Friday and Monday for top tier conventional 30yr fixed scenarios. Today's number is closer to 4.875% for the same scenarios.

Click on graph for larger image.

This is a graph from Mortgage News Daily (MND) showing 30-year fixed rates from three sources (MND, MBA, Freddie Mac) since 2010.  

The 30-year fixed rate for top tier scenarios was 4.88% today, down from 4.95% on Monday.

Go to MND and you can adjust the graph for different time periods.

by Calculated Risk on 3/29/2022 10:45:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Case-Shiller National Index up 19.2% Year-over-year in January

Excerpt:

This graph below shows existing home months-of-supply (inverted, from the NAR) vs. the seasonally adjusted month-to-month price change in the Case-Shiller National Index (both since January 1999 through January 2022).

Note that the months-of-supply is not seasonally adjusted.

There is a clear relationship, and this is no surprise (but interesting to graph).  If months-of-supply is high, prices decline. If months-of-supply is very low (like now), prices rise quickly.

In January, the months-of-supply was at 1.6 months, and the Case-Shiller National Index (SA) increased 1.56% month-over-month.  The black arrow points to the January 2022 dot. In the February existing home sales report, the NAR reported months-of-supply increased to 1.7 months.

My sense is the Case-Shiller National annual growth rate of 19.98% in August was probably the peak YoY growth rate, however, since the normal level of inventory is probably in the 4 to 6 months range - we’d have to see a significant increase in inventory to sharply slow price increases, and that is why I’m focused on inventory!

Note: I’ll have more on real prices, price-to-rent and affordability tomorrow.emphasis added

There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/

by Calculated Risk on 3/29/2022 10:05:00 AM

From the BLS: Job Openings and Labor Turnover Summary

The number of job openings was little changed at 11.3 million on the last business day of February, the U.S. Bureau of Labor Statistics reported today. Hires edged up to 6.7 million while total separations were little changed at 6.1 million. Within separations, the quits rate was little changed at 2.9 percent and the layoffs and discharges rate was unchanged at 0.9 percent.
emphasis added

The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for February, the employment report this Friday will be for March.

Click on graph for larger image.

Note that hires (dark blue) and total separations (red and light blue columns stacked) are usually pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

The huge spike in layoffs and discharges in March 2020 are labeled, but off the chart to better show the usual data.

Jobs openings decreased slightly in February to 11.266 million from 11.283 million in January.

The number of job openings (yellow) were up 43% year-over-year. 

Quits were up 27% year-over-year. These are voluntary separations. (See light blue columns at bottom of graph for trend for "quits").

by Calculated Risk on 3/29/2022 09:16:00 AM

S&P/Case-Shiller released the monthly Home Price Indices for January ("January" is a 3-month average of November, December and January prices).

This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.

From S&P: S&P Corelogic Case-Shiller Index Reports 19.2% Annual Home Price Gain to Start 2022

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 19.2% annual gain in January, up from 18.9% in the previous month. The 10-City Composite annual increase came in at 17.5%, up from 17.1% in the previous month. The 20-City Composite posted a 19.1% year-over-year gain, up from 18.6% in the previous month.

Phoenix, Tampa, and Miami reported the highest year-over-year gains among the 20 cities in January. Phoenix led the way with a 32.6% year-over-year price increase, followed by Tampa with a 30.8% increase and Miami with a 28.1% increase. Sixteen of the 20 cities reported higher price increases in the year ending January 2022 versus the year ending December 2021.
...
Before seasonal adjustment, the U.S. National Index posted an 1.1% month-over-month increase in January, while the 10-City and 20-City Composites both posted increases of 1.4%.

After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.6%, and the 10-City and 20-City Composites both posted increases of 1.8%.

In January, all 20 cities reported increases before and after seasonal adjustments.

“Home price changes in January 2022 continued the strength we had observed for much of the prior year,” says Craig J. Lazzara, Managing Director at S&P DJI. “The National Composite Index recorded a gain of 19.2% for the 12 months ended in January 2022; the 10- and 20-City Composites rose 17.5% and 19.1%, respectively. All three composites reflect a small acceleration of price growth for January 2022.

“Last fall we observed that home prices, although continuing to rise quite sharply, had begun to decelerate. Even that modest deceleration was on pause in January. The 19.2% year-over-year change for January was the fourth-largest reading in 35 years of history.”
emphasis added

Click on graph for larger image.

The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

The Composite 10 index is up 1.4% in January (SA).

The Composite 20 index is up 1.4% (SA) in January.

The National index is 54% above the bubble peak (SA), and up 1.1% (SA) in January.  The National index is up 108% from the post-bubble low set in February 2012 (SA).

The second graph shows the year-over-year change in all three indices.

The Composite 10 SA is up 17.5% year-over-year.  The Composite 20 SA is up 19.1% year-over-year.

The National index SA is up 19.2% year-over-year.

Price increases were above expectations.  I'll have more later.

by Calculated Risk on 3/28/2022 07:11:00 PM

From Matthew Graham at Mortgage News Daily: Uneventful Start This Week as Rates Flirt With 5%

Last week's big news was the rapid jump in rates. In fact, it was right in line with the worst week in decades in terms of the total increase in the average 30yr fixed rate. On that note, June 17-21, 2013 saw rates rise 0.52% compared to last week's 0.49%. Because rates are quoted in 0.125% increments, this would be a hit of 0.50% to prospective borrowers in either case. ... In more specific terms, the average lender is effectively unchanged when it comes to top tier 30yr fixed scenarios with quotes currently ranging from 4.875 to 5.125% in a majority of cases. [30 year fixed 4.95%]
emphasis added

Tuesday:
• At 9:00 AM ET, S&P/Case-Shiller House Price Index for January. The consensus is for a 18.3% year-over-year increase in the Comp 20 index.

• Also at 9:00 AM, FHFA House Price Index for January 2021. This was originally a GSE only repeat sales, however there is also an expanded index.

• At 10:00 AM, Job Openings and Labor Turnover Survey for February from the BLS.

On COVID (focus on hospitalizations and deaths):

COVID Metrics
	Now	Week Ago	Goal
Percent fully Vaccinated	65.5%	---	≥70.0%1
Fully Vaccinated (millions)	217.4	---	≥2321
New Cases per Day3🚩	27,775	27,104	≤5,0002
Hospitalized3	12,487	17,168	≤3,0002
Deaths per Day3	690	927	≤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.

Click on graph for larger image.

This graph shows the daily (columns) and 7-day average (line) of deaths reported.

New cases have stopped declining.

by Calculated Risk on 3/28/2022 09:40:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Housing Inventory Has Bottomed

A brief excerpt:

Altos Research reports inventory up 2.4% last week ...

As of March 25th, inventory was at 253 thousand (7-day average), compared to 248 thousand the prior week. Inventory was UP 2.4% from the previous week.

Last year inventory bottomed seasonally in April 2021 - very late in the year. This year, by this measure, inventory bottomed seasonally at the beginning of March.

Inventory is still very low. Compared to the same week in 2021, inventory is down 19.0%, and compared to the same week in 2020, and inventory is down 66.1% from 747 thousand.

One of the keys will be to watch the year-over-year change each week to see if the declines are decreasing. Here is a table of the year-over-year change by week since the beginning of the year.

Week Ending	YoY Change
12/31/2021	-30.0%
1/7/2022	-26.0%
1/14/2022	-28.6%
1/21/2022	-27.1%
1/28/2022	-25.9%
2/4/2022	-27.9%
2/11/2022	-27.5%
2/18/2022	-25.8%
2/25/2022	-24.9%
3/4/2022	-24.2%
3/11/2022	-21.7%
3/18/2022	-21.7%
3/25/2022	-19.0%

Now we need to watch if the YoY change continues to decrease. Based on the current trend, it is possible inventory will be up YoY sometime in the second half of 2022.

Altos Research CEO Mike Simonsen discusses this data regularly on Youtube.

There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/

by Calculated Risk on 3/28/2022 08:39:00 AM

These indicators are mostly for travel and entertainment.    It is interesting to watch these sectors recover as the pandemic subsides.

----- Airlines: Transportation Security Administration -----
The TSA is providing daily travel numbers.

This data is as of March 27th.

Click on graph for larger image.

This data shows the 7-day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Black), 2021 (Blue) and 2022 (Red).

The dashed line is the percent of 2019 for the seven-day average.

The 7-day average is down 10.6% from the same day in 2019 (89.4% of 2019).  (Dashed line) 

Air travel was picking up over the last month.

----- Restaurants: OpenTable -----
The second graph shows the 7-day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities.

IMPORTANT: OpenTable notes that all data is compared to 2019. Thanks!

Thanks to OpenTable for providing this restaurant data:

This data is updated through March 26, 2022.

This data is "a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. For year-over-year comparisons by day, we compare to the same day of the week from the same week in the previous year."

Dining was mostly moving sideways but declined during the winter wave of COVID and is now increasing.  The 7-day average for the US is down 4% compared to 2019.

----- Movie Tickets: Box Office Mojo -----
This data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue).  

Black is 2020, Blue is 2021 and Red is 2022.  

The data is from BoxOfficeMojo through March 24th.

Note that the data is usually noisy week-to-week and depends on when blockbusters are released.  

Movie ticket sales were at $102 million last week, down about 46% from the median for the week. 

----- Hotel Occupancy: STR -----
This graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.

The red line is for 2022, black is 2020, blue is the median, and dashed light blue is for 2021.

This data is through March 19th. The occupancy rate was down 3.7% compared to the same week in 2019.

The 4-week average of the occupancy rate is close to the median rate for the previous 20 years (Blue).

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

The 4-week average of the occupancy rate will increase seasonally over the next few weeks.

----- Transit: Apple Mobility -----
This graph is from Apple mobility. From Apple: "This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities." This is just a general guide - people that regularly commute probably don't ask for directions.

This data is through March 26th 

for the United States and several selected cities.

The graph is the running 7-day average to remove the impact of weekends.

IMPORTANT: All data is relative to January 13, 2020. This data is NOT Seasonally Adjusted. People walk and drive more when the weather is nice, so I'm just using the transit data.

According to the Apple data directions requests, public transit in the 7-day average for the US is at 126% of the January 2020 level. 

----- New York City Subway Usage -----
Here is some interesting data on New York subway usage (HT BR).

This graph is from Todd W Schneider. 

This graph shows how much MTA traffic has recovered in each borough (Graph starts at first week in January 2020 and 100 = 2019 average).

Manhattan is at about 38% of normal.

This data is through Friday, March 25th.

He notes: "Data updates weekly from the MTA’s public turnstile data, usually on Saturday mornings".

by Calculated Risk on 3/27/2022 09:15:00 PM

Weekend:
• Schedule for Week of March 27, 2022

Monday:
• At 10:30 AM ET, Dallas Fed Survey of Manufacturing Activity for March. This is the last of the regional surveys for March.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 15 and DOW futures are down 100 (fair value).

Oil prices were up over the last week with WTI futures at $109.92 per barrel and Brent at $116.63 per barrel. A year ago, WTI was at $61, and Brent was at $64 - so WTI oil prices are up 80% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $4.22 per gallon. A year ago prices were at $2.84 per gallon, so gasoline prices are up $1.38 per gallon year-over-year.