RSS Feed by Calculated Risk on 10/10/2022 08:45:00 AM
Monday, October 10, 2022
Housing October 10th Weekly Update: Inventory Increased Slightly; Now Above Same Week in 2020
Inventory is now above the levels for the same week in 2020 (milestone 3 below).
2022: +0.1K
2021: -2.2K
2020: -7.7K
2019: -8.4K
Inventory bottomed seasonally at the beginning of March 2022 and is now up 133% since then. Altos reports inventory is up 31.8% year-over-year.
Click on graph for larger image.
This inventory graph is courtesy of Altos Research.
Click on graph for larger image.This inventory graph is courtesy of Altos Research.
As of October 7th, inventory was at 561 thousand (7-day average), compared to 561 thousand the prior week.
Compared to the same week in 2021, inventory is up 31.8% from 426 thousand, and compared to the same week in 2020 inventory is up 1.1% from 555 thousand. Compared to 3 years ago, inventory is down 40.7% from 947 thousand.
Here are the inventory milestones I’m watching for with the Altos data:
1. The seasonal bottom (happened on March 4, 2022, for Altos) ✅
2. Inventory up year-over-year (happened on May 13, 2022, for Altos) ✅
3. Inventory up compared to two years ago (happened on October 9, 2022, for Altos) ✅
4. Inventory up compared to 2019 (currently down 40.7%).
1. The seasonal bottom (happened on March 4, 2022, for Altos) ✅
2. Inventory up year-over-year (happened on May 13, 2022, for Altos) ✅
3. Inventory up compared to two years ago (happened on October 9, 2022, for Altos) ✅
4. Inventory up compared to 2019 (currently down 40.7%).
Here is a graph of the inventory change vs 2021 (milestone 2 above), 2020 (milestone 3) and 2019 (milestone 4).
The blue line is the year-over-year data, the red line is compared to two years ago, and dashed purple is compared to 2019.
Two years ago (in 2020) inventory was declining all year. Inventory is now up compared to the same week in 2020!
A key will be if inventory increases in the Fall this year.
Mike Simonsen discusses this data regularly on Youtube.
Four High Frequency Indicators for the Economy
by Calculated Risk on 10/10/2022 08:21:00 AM
These indicators are mostly for travel and entertainment. It is interesting to watch these sectors recover as the pandemic subsides.
The TSA is providing daily travel numbers.
This data is as of October 8th.
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 9.1% from the same day in 2019 (90.9% of 2019). (Dashed line)
Air travel - as a percent of 2019 - had picked up towards the end of Summer, but is now, off about 10% from 2019 like earlier in the year.
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 October 6th.
Note that the data is usually noisy week-to-week and depends on when blockbusters are released.
Movie ticket sales were at $88 million last week, down about 35% from the median for the week.
Note that the data is usually noisy week-to-week and depends on when blockbusters are released.
Movie ticket sales were at $88 million last week, down about 35% from the median for the week.
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. Dashed purple is 2019 (STR is comparing to a strong year for hotels).
This data is through Oct 1st. The occupancy rate was down 2.4% 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.
Notes: Y-axis doesn't start at zero to better show the seasonal change.
This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019.
Blue is for 2020. Purple is for 2021, and Red is for 2022.
As of September 30th, gasoline supplied was up 3.6% compared to the same week in 2019.
Recently gasoline supplied has been running below 2019 and 2021 levels - and sometimes below 2020. This is only the 2nd week this year that gasoline supplied was above 2019 levels.
Sunday, October 09, 2022
Sunday Night Futures
by Calculated Risk on 10/09/2022 06:55:00 PM
Weekend:
• Schedule for Week of October 9, 2022
Monday:
• Columbus Day Holiday: Banks will be closed in observance of Columbus Day. The stock market will be open. No economic releases are scheduled.
• At 1:35 PM ET, Speech, Fed Vice Chair Lael Brainard, Restoring Price Stability in an Uncertain Economic Environment, At the National Association for Business Economics (NABE) Annual Meeting, Chicago, Ill.
From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 26 and DOW futures are down 174 (fair value).
Oil prices were up over the last week with WTI futures at $92.64 per barrel and Brent at $97.92 per barrel. A year ago, WTI was at $80, and Brent was at $82 - so WTI oil prices are up 15% year-over-year.
Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.91 per gallon. A year ago, prices were at $3.25 per gallon, so gasoline prices are up $0.66 per gallon year-over-year. NOTE: Gasoline prices in Los Angeles have spiked to a near record $6.40 per gallon due to refinery issues.
Housing Discussion with Fortune's Lance Lambert
by Calculated Risk on 10/09/2022 11:37:00 AM
On Friday, Fortune’s Lance Lambert and I discussed the US housing market.
Click here for audio
One of the key topics was household formation. Here is an excellent summary article by Katie McKellar at desert.com: The most ‘underreported’ factor influencing housing market, according to Calculated Risk
Bill McBride, author of the economics blog Calculated Risk, said there’s a key reason why both rent and home price growth is slowing amid the U.S. housing correction playing out today.
In a live Twitter Space hosted by Fortune Magazine on Friday, McBride called it the most “underreported” factor.
What is it? Household formation — both because of how much it accelerated amid the COVID-19 pandemic and how it’s slowing down now.
Wholesale Used Car Prices Declined in September; Prices Down Slightly Year-over-year
by Calculated Risk on 10/09/2022 08:11:00 AM
From Manheim Consulting on Friday: Wholesale Used-Vehicle Prices See Large Decline Again in September
Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) decreased 3.0% in September from August. The Manheim Used Vehicle Value Index declined to 204.5 and is now down 0.1% from a year ago. The non-adjusted price change in September was a decline of 2.1% compared to August, moving the unadjusted average price down 2.3% year over year.
emphasis added
Click on graph for larger image.This index from Manheim Consulting is based on all completed sales transactions at Manheim’s U.S. auctions.
The Manheim index suggests used car prices decreased in September and were down 0.1% year-over-year (YoY).
This also suggests the consumer price index for used cars and trucks will be down again in September.
It is likely this index will be down more than 10% YoY in October.
Saturday, October 08, 2022
Real Estate Newsletter Articles this Week: 7 Years in Purgatory
by Calculated Risk on 10/08/2022 02:11:00 PM
At the Calculated Risk Real Estate Newsletter this week:
• House Prices: 7 Years in Purgatory
• Black Knight Mortgage Monitor: "Home Prices Down Again in August ... Now 2% Off June Peak"
• "For many [home] sellers, it likely feels like the rug has been pulled out from underneath them"
• Apartments: Net Absorption Very Low in Q3, New Construction Deliveries Even Lower
This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.
You can subscribe at https://calculatedrisk.substack.com/
Most content is available for free (and no Ads), but please subscribe!
Schedule for Week of October 9, 2022
by Calculated Risk on 10/08/2022 08:11:00 AM
The key economic reports this week are September CPI and Retail Sales.
Columbus Day Holiday: Banks will be closed in observance of Columbus Day. The stock market will be open. No economic releases are scheduled.
1:35 PM: Speech, Fed Vice Chair Lael Brainard, Restoring Price Stability in an Uncertain Economic Environment, At the National Association for Business Economics (NABE) Annual Meeting, Chicago, Ill.
6:00 AM: NFIB Small Business Optimism Index for September.
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
8:30 AM: The Producer Price Index for September from the BLS. The consensus is for a 0.2% increase in PPI, and a 0.3% increase in core PPI.
2:00 PM: FOMC Minutes, Meeting of September 20-21, 2022
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for an increase to 225 thousand from 219 thousand last week (likely impact from Hurricane Ian).
8:30 AM: The Consumer Price Index for September from the BLS. The consensus is for a 0.2% increase in CPI, and a 0.5% increase in core CPI. The consensus is for CPI to be up 8.1% year-over-year and core CPI to be up 6.5% YoY.
8:30 AM ET: Retail sales for September will be released. The consensus is for a 0.2% increase in retail sales.This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).
10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for October).
Friday, October 07, 2022
COVID Oct 7 2022, Update on Cases, Hospitalizations and Deaths
by Calculated Risk on 10/07/2022 09:45:00 PM
NOTE: Starting this week, COVID stats will only be updated on Fridays.
On COVID (focus on hospitalizations and deaths):
NOTE: Cases have declined by two-thirds from the recent peak, and deaths lag cases - so we might see average daily deaths in the 200s soon (good news, but still too high).
Average daily deaths bottomed in July 2021 at 214 per day.
| COVID Metrics | ||||
|---|---|---|---|---|
| Now | Week Ago | Goal | ||
| New Cases per Day2 | 41,855 | 46,767 | ≤5,0001 | |
| Hospitalized2 | 21,607 | 23,378 | ≤3,0001 | |
| Deaths per Day2 | 345 | 352 | ≤501 | |
| 1my goals to stop daily posts, 27-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.
AAR: September Rail Carloads Mostly Unchanged Year-over-year, Intermodal Down
by Calculated Risk on 10/07/2022 02:34:00 PM
From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission.
Total carloads on U.S. railroads were down 1.1% in September 2022 from September 2021. Since 1988, when our carload data begin, only 2020 had fewer total carloads in September than 2022 did. ... Intermodal was down 4.8% in September, its seventh straight decline and 14th decline in the past 15 months. So far this year, only January had lower intermodal volumes than September. That’s unusual. On average, September is the third highest intermodal month of the year (behind October and August). Intermodal volumes are being constrained by a shift in consumer spending away from goods and towards services, as well as by high inflation that means the same amount of money spent means a smaller quantity of goods purchased.
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 2020, 2021 and 2022:
Total carloads on U.S. railroads averaged 232,148 per week in September 2022. That’s down 1.1% from September 2021, up 4.6% from September 2020, and down 6.5% from September 2019. Since 1988, when our carload data begin, only 2020 had fewer total carloads in September than 2022 did.
The second graph shows the six-week average (not monthly) of U.S. intermodal in 2020, 2021 and 2022: (using intermodal or shipping containers):Intermodal averaged 252,826 containers and trailers per week in September 2022. That’s down 4.8% from last September, the seventh straight decline, and the biggest percentage decline in five months.
So far this year, only January had lower intermodal volumes than September
Realtor.com Reports Weekly Active Inventory Up 30% Year-over-year; New Listings Down 17%
by Calculated Risk on 10/07/2022 12:50:00 PM
Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report released yesterday from Chief Economist Danielle Hale and Jiayi Xu: Weekly Housing Trends View — Data Week Ending Oct 1, 2022. Note: They have data on list prices, new listings and more, but this focus is on inventory.
• Active inventory continued to grow, increasing 30% above one year ago. Highlighting the roller coaster ride that the housing market and its participants have been on in the last few years, one’s take on the current number of homes for sale depends very much on the comparison point. After a period of unusually hot activity, financial conditions are cooling demand in the housing market and there are substantially more homes for-sale compared to one year ago. However, the market still falls short of pre-pandemic inventory levels by an even greater amount.
...
• New listings–a measure of sellers putting homes up for sale–were again down, dropping 17% from one year ago. This week marks the thirteenth straight week of year over year declines in the number of new listings coming up for sale. As mortgage rates near 7 percent, which is a level not seen in more than two decades, sellers who are also trying to buy a home, nearly 3 of every 4 potential sellers, have had to alter their trade-up plans.
Here is a graph of the year-over-year change in inventory according to realtor.com. Note the rapid increase in the YoY change earlier this year, from down 30% at the beginning of the year, to up 29% YoY at the beginning of July.
However, the Realtor.com data has been stuck at up around 26% to 30% YoY for 14 weeks in a row. This is due to the slowdown in new listings, even as sales have fallen sharply.
