by Calculated Risk on 4/29/2022 10:17:00 PM

On COVID (focus on hospitalizations and deaths):

COVID Metrics
	Now	Week Ago	Goal
Percent fully Vaccinated	66.1%	---	≥70.0%1
Fully Vaccinated (millions)	219.6	---	≥2321
New Cases per Day3🚩	54,696	40,713	≤5,0002
Hospitalized3🚩	10,991	9,997	≤3,0002
Deaths per Day3	311	340	≤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.

Deaths are declining week-over-week, but new cases have more than doubled from the recent low, and hospitalizations are increasing.

Average daily deaths bottomed in July 2021 at 214 per day.

by Calculated Risk on 4/29/2022 04:09:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency decreased to 1.01% in March from 1.11% in February. The serious delinquency rate is down from 2.58% in March 2021.

These are mortgage loans that are "three monthly payments or more past due or in foreclosure".

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble and peaked at 3.32% in August 2020 during the pandemic.

Click on graph for larger image

By vintage, for loans made in 2004 or earlier (1% of portfolio), 3.12% are seriously delinquent (down from 3.30% in February). 

For loans made in 2005 through 2008 (2% of portfolio), 5.14% are seriously delinquent (down from 5.46%), 

 For recent loans, originated in 2009 through 2021 (97% of portfolio), 0.81% are seriously delinquent (down from 0.89%). So, Fannie is still working through a few poor performing loans from the bubble years.

Mortgages in forbearance are counted as delinquent in this monthly report, but they will not be reported to the credit bureaus.

The pandemic related increase in delinquencies was very different from the increase in delinquencies following the housing bubble.   Lending standards had been fairly solid over the previous decade, and most of these homeowners had equity in their homes - and the vast majority of these homeowners have been able to restructure their loans once they were employed.

Freddie Mac reported earlier.

by Calculated Risk on 4/29/2022 02:32:00 PM

From CoStar: STR: US Weekly Hotel Rates Exceed Pre-Pandemic Numbers by 15%

U.S. hotel performance increased from the previous week, according to STR‘s latest data through April 23.

April 17-23, 2022 (percentage change from comparable week in 2019*):

• Occupancy: 65.8% (-4.2%)
• Average daily rate (ADR): $148.35 (+15.4%)
• Revenue per available room (RevPAR): $97.66 (+10.5%)

*Due to the pandemic impact, 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 2022, black is 2020, blue is the median, and dashed light blue is for 2021.  Dashed purple is 2019 (STR is comparing to a strong year for hotels).

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

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

The 4-week average of the occupancy rate will now mostly move sideways seasonally until the summer.

by Calculated Risk on 4/29/2022 11:46:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Realtor.com Reports Weekly Inventory down only 6% Year-over-year

Excerpt:

Realtor.com has monthly and weekly data on the existing homes. Here is their most recent weekly report released yesterday: Weekly Housing Trends View — Data Week Ending April 23, 2022. They have data on list prices, new listing and more, but this focus is on inventory.

• Active inventory is down just 6 percent from a year ago.

The number of homes for sale is past this year’s seasonal low, which was also a record low, which means the number of homes for sale is climbing week to week and month to month as it typically does in spring. While the market has not yet caught up to last year’s level, this week marked a big jump forward. The gap between this year’s homes for sale and last year’s is one-fifth the size that it was at the beginning of the year. The catch up is likely to continue, as we noted last week, as new listings grow and home sales slow, and we expect active inventory to surpass year ago levels in the next few months. This growth will mean more options for shoppers than they’ve had in a while, even though inventory continues to lag pre-pandemic normal.

Here is a graph of the year-over-year change in inventory according to realtor.com. Note: I corrected a sign error in the data for Feb 26, 2022.

The previous week, inventory was down 12.6% YoY according to Realtor.com. That is close to the 11.2% that Altos reported. I expect Altos to report a single digit year-over-year decline in inventory on Monday.

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

by Calculated Risk on 4/29/2022 08:38:00 AM

The BEA released the Personal Income and Outlays report for March:

Personal income increased $107.2 billion (0.5 percent) in March, according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $89.7 billion (0.5 percent) and personal consumption expenditures (PCE) increased $185.0 billion (1.1 percent).

Real DPI decreased 0.4 percent in March and Real PCE increased 0.2 percent; goods decreased 0.5 percent and services increased 0.6 percent. The PCE price index increased 0.9 percent. Excluding food and energy, the PCE price index increased 0.3 percent
emphasis added

The March PCE price index increased 6.6 percent year-over-year and the PCE price index, excluding food and energy, increased 5.2 percent year-over-year.

The following graph shows real Personal Consumption Expenditures (PCE) through March 2022 (2012 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income was slightly above expectations, and the increase in PCE was above expectations.

by Calculated Risk on 4/28/2022 09:15:00 PM

Friday:
• At 8:30 AM ET: Personal Income and Outlays, March 2021. The consensus is for a 0.4% increase in personal income, and for a 0.6% increase in personal spending. And for the Core PCE price index to increase 0.3%.  PCE prices are expected to be up 6.4% YoY, and core PCE prices up 5.3% YoY.

• At 9:45 AM, Chicago Purchasing Managers Index for April. The consensus is for a reading of 62.0, down from 62.9 in March.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Final for April). The consensus is for a reading of 65.7.

On COVID (focus on hospitalizations and deaths):

COVID Metrics
	Now	Week Ago	Goal
Percent fully Vaccinated	66.1%	---	≥70.0%1
Fully Vaccinated (millions)	219.6	---	≥2321
New Cases per Day3🚩	53,133	42,426	≤5,0002
Hospitalized3🚩	10,803	9,909	≤3,0002
Deaths per Day3	334	352	≤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.

Deaths are declining week-over-week, but new cases and hospitalizations are increasing.

Average daily deaths bottomed in July 2021 at 214 per day.

by Calculated Risk on 4/28/2022 03:05:00 PM

From the National Multifamily Housing Council (NMHC): Apartment Demand Continues to Grow, but Investors Face Tougher Financing Conditions

Apartment markets tightened further according to the National Multifamily Housing Council’s Quarterly Survey of Apartment Market Conditions for April 2022, while financing became more costly. The Market Tightness (60) index was the only index to come in above the breakeven level (50) this quarter; the Sales Volume (50) index came in at exactly 50, with much disagreement among respondents; while both the Equity Financing (35) and Debt Financing (9) indexes indicated weaker conditions compared to three months prior.

“Demand for apartments continues to exceed supply, resulting in the fifth straight quarter of tightening markets,” noted NMHC’s Chief Economist, Mark Obrinsky. “Yet, even as rent growth and occupancy remain elevated, developers are struggling to build more housing due to the increasing cost of materials, a lack of available labor, continued obstructionism from NIMBYs, and, because of rising interest rates, an increasing cost of capital.”
...
The Market Tightness Index came in at 60 this quarter – above the breakeven level of 50 – indicating that market conditions have become tighter. While less than one-third (30 percent) of respondents reported markets to be tighter than three months ago, an even smaller share (10 percent) thought that markets have become looser. A majority of respondents (59 percent), meanwhile, thought that apartment market conditions were unchanged from last quarter.

Click on graph for larger image.

This graph shows the quarterly Apartment Tightness Index. Any reading above 50 indicates tighter conditions from the previous quarter. 

Even though the index declined in April, this indicates market conditions tightened further in April for the fifth consecutive quarter, after being especially weak during the early months of the pandemic.

by Calculated Risk on 4/28/2022 02:38:00 PM

From the Las Vegas Visitor Authority: March 2022 Las Vegas Visitor Statistics

The positive visitation trajectory continued in March as Las Vegas hosted more than 3.3M visitors, nearly 50% ahead of last March and roughly 10% shy of March 2019.

With meetings returning across the destination along with tradeshows such as ASD Las Vegas, Nat'l Automobile Dealers Assn, Bar & Restaurant Expo, and Int'l Pizza Expo, the convention segment saw continued improvement, reaching an est. 495k attendees for the month, roughly 90% of pre‐COVID levels of Mar 2019. Overall hotel occupancy reached 80.6%, up approx. 25 pts YoY and down only 10.9 pts vs. March 2019. Weekend occupancy exceeded 92% (up 14.4 pts YoY and down 5.0 pts vs. March 2019) and Midweek occupancy reached 76.6% (up 28.8 pts YoY and down 12.3 pts vs. March 2019).

ADR exceeded $163, well ahead of last March (+63.0%) and March 2019 (+21.8%) while RevPAR reached $131.49 for the month, dramatically ahead of March 2021 (+136.7%) and 7.3% over March 2019 levels

Click on graph for larger image.

The first graph shows visitor traffic for 2019 (dark blue), 2020 (light blue), 2021 (yellow) and 2022 (red)

Visitor traffic was down 9.8% compared to the same month in 2019.

Visitor traffic was up 50% compared to last March.

The second graph shows convention traffic.

Convention traffic was down 10.5% compared to March 2019.

Note: There was almost no convention traffic from April 2020 through May 2021.

by Calculated Risk on 4/28/2022 12:22:00 PM

Earlier from the BEA: Gross Domestic Product, Fourth Quarter and Year 2021 (Advance Estimate)

Real gross domestic product (GDP) decreased at an annual rate of 1.4 percent in the first quarter of 2022, according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 6.9 percent....

The decrease in real GDP reflected decreases in private inventory investment, exports, federal government spending, and state and local government spending, while imports, which are a subtraction in the calculation of GDP, increased. Personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment increased.
emphasis added

The advance Q1 GDP report, at -1.4% annualized, was below expectations, primarily due to a negative impact from trade and a decrease in inventories. 

Personal consumption expenditures (PCE) increased at a 2.7% annualized rate in Q1.

The graph below shows the contribution to GDP from residential investment, equipment and software, and nonresidential structures (3 quarter trailing average). This is important to follow because residential investment tends to lead the economy, equipment and software is generally coincident, and nonresidential structure investment trails the economy.

In the graph, red is residential, green is equipment and software, and blue is investment in non-residential structures. So, the usual pattern - both into and out of recessions is - red, green, blue.

Of course - with the sudden economic stop due to COVID-19 - the usual pattern didn't apply.

The dashed gray line is the contribution from the change in private inventories.

Click on graph for larger image.

Residential investment (RI) increased at a 2.1% annual rate in Q1.  Equipment investment increased at a 15.3% annual rate, and investment in non-residential structures increased at a 9.2% annual rate.

The contribution to Q1 GDP from investment in private inventories was -0.84 percentage points.

On a 3-quarter trailing average basis, RI (red) is unchanged, equipment (green) is up, and nonresidential structures (blue) is still down.

I'll post more on the components of non-residential investment once the supplemental data is released.

The second graph shows residential investment as a percent of GDP.

Residential Investment as a percent of GDP increased in Q1.

I'll break down Residential Investment into components after the GDP details are released.

Note: Residential investment (RI) includes new single-family structures, multifamily structures, home improvement, broker's commissions, and a few minor categories.

The third graph shows non-residential investment in structures, equipment and "intellectual property products".  

Investment in non-residential structures increased in Q1 as a percent GDP.

by Calculated Risk on 4/28/2022 08:41:00 AM

The DOL reported:

In the week ending April 23, the advance figure for seasonally adjusted initial claims was 180,000, a decrease of 5,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 184,000 to 185,000. The 4-week moving average was 179,750, an increase of 2,250 from the previous week's revised average. The previous week's average was revised up by 250 from 177,250 to 177,500.
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 increased to 179,750.

The previous week was revised up.

Weekly claims were close to the consensus forecast.