by Calculated Risk on 1/30/2023 02:13:00 PM
Monday, January 30, 2023
Fannie Mae: Mortgage Serious Delinquency Rate Increased Slightly in December
Fannie Mae reported that the Single-Family Serious Delinquency increased to 0.65% in December from 0.64% in November. The serious delinquency rate is down from 1.25% in December 2021. This is at the pre-pandemic lows.
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), 2.16% are seriously delinquent (down from 2.15% in November).
Mortgages in forbearance were counted as delinquent in this monthly report, but they were not reported to the credit bureaus.
Freddie Mac reported earlier.
Lawler: D.R. Horton (DHI) Net Order Price Declined "Roughly" 10% from Peak
by Calculated Risk on 1/30/2023 10:04:00 AM
Today, in the Calculated Risk Real Estate Newsletter: Lawler: D.R. Horton (DHI) Net Order Price Declined "Roughly" 10% from Peak
Brief excerpt:
From housing economist Tom Lawler:You can subscribe at https://calculatedrisk.substack.com/.
DHI’s average net order price last quarter was actually DOWN 4.1% from the comparable quarter of 2021, and was down 7.9% from the previous quarter. While some of this decline may have been related to the mix of sales, it’s worth noting that the average net order price was down YOY in all but one of the regions DHI reports on (the “East” saw no change, while the Southwest saw a 10% drop). In addition, the company on the conference call seemed to suggest that most of the recent price declines have reflected decreased prices and/or increased concessions (see below).
Housing January 30th Weekly Update: Inventory Decreased 1.4% Week-over-week
by Calculated Risk on 1/30/2023 08:41:00 AM
Click on graph for larger image.
This inventory graph is courtesy of Altos Research.
Mike Simonsen discusses this data regularly on Youtube.
Sunday, January 29, 2023
Sunday Night Futures
by Calculated Risk on 1/29/2023 06:31:00 PM
Weekend:
• Schedule for Week of January 29, 2023
Monday:
• At 10:30 AM ET, Dallas Fed Survey of Manufacturing Activity for January. This is the last of the regional Fed manufacturing surveys for January.
From CNBC: Pre-Market Data and Bloomberg futures S&P 500 futures are down 5 and DOW futures are down 46 (fair value).
Oil prices were down over the last week with WTI futures at $79.68 per barrel and Brent at $86.66 per barrel. A year ago, WTI was at $88, and Brent was at $92 - so WTI oil prices are DOWN 10% year-over-year.
Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.50 per gallon. A year ago, prices were at $3.31 per gallon, so gasoline prices are up $0.19 per gallon year-over-year.
FOMC Preview: 25bp Hike
by Calculated Risk on 1/29/2023 08:11:00 AM
Expectations are the FOMC will announce a 25bp rate increase in the federal funds rate and analysts will be looking for any mention of a possible pause in rate hikes at the March FOMC meeting.
"At the February FOMC meeting, we look for the Fed to raise the target range for the federal funds rate by 25bp to 4.50-4.75%. ... incoming data that points to a broadening of the slowdown and further signs of decelerating price pressures appear to have tipped the balance within the FOMC toward another downshift in the pace of rate hikes next week."
...
We expect Chair Powell to continue to emphasize that a slower pace of rate hikes does not signal the Fed’s job is over. ... the decision may be for a smaller 25bp hike, but the Fed will want to avoid the interpretation that this implies a lower terminal rate or an earlier onset of rate cuts than the committee viewed as appropriate when it last met in December. That means no change in policy rate guidance in the FOMC statement. We think the statement will continue to say that “ongoing increases in the target range [for the federal funds rate] will be appropriate.” A softening in this language could lead to an undesired easing in financial conditions."
emphasis added
GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1 | ||||
---|---|---|---|---|
Projection Date | 2022 | 2023 | 2024 | 2025 |
Dec 2022 | 0.4 to 0.5 | 0.4 to 1.0 | 1.3 to 2.0 | 1.6 to 2.0 |
The unemployment rate was at 3.5% in December. This put the Q4 rate at 3.6%, slightly lower than the FOMC projection.
Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2 | ||||
---|---|---|---|---|
Projection Date | 2022 | 2023 | 2024 | 2025 |
Dec 2022 | 3.7 | 4.4 to 4.7 | 4.3 to 4.8 | 4.0 to 4.7 |
As of December 2022, PCE inflation was up 5.0% from December 2021. On a Q4-over-Q4 basis PCE inflation was up 5.5% in Q4 2022. This was below the FOMC projection.
Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1 | ||||
---|---|---|---|---|
Projection Date | 2022 | 2023 | 2024 | 2025 |
Dec 2022 | 5.6 to 5.8 | 2.9 to 3.5 | 2.3 to 2.7 | 2.0 to 2.2 |
PCE core inflation was up 4.4% in December year-over-year. On a Q4-over-Q4 basis core PCE inflation was up 4.7% in Q4 2022. This was at the bottom of the FOMC projection range.
Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1 | ||||
---|---|---|---|---|
Projection Date | 2022 | 2023 | 2024 | 2025 |
Dec 2022 | 4.7 to 4.8 | 3.2 to 3.7 | 2.3 to 2.7 | 2.0 to 2.2 |
Saturday, January 28, 2023
Real Estate Newsletter Articles this Week: New Home Sales at 616,000 Annual Rate in December; Previous 3 Months Revised Down Sharply
by Calculated Risk on 1/28/2023 02:11:00 PM
At the Calculated Risk Real Estate Newsletter this week:
• New Home Sales at 616,000 Annual Rate in December; Previous 3 Months Revised Down Sharply
• Final Look at Local Housing Markets in December
• 1.51 million Total Housing Completions in 2022 including Manufactured Homes; Most Since 2007
• Has Housing "Bottomed"?
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 January 29, 2023
by Calculated Risk on 1/28/2023 10:11:00 AM
The key reports scheduled for this week are the January employment report and November Case-Shiller house prices.
Other key indicators include January ISM manufacturing and services surveys, and January vehicle sales.
The FOMC meets this week, and the FOMC is expected to announce a 25 bp hike in the Fed Funds rate.
10:30 AM: Dallas Fed Survey of Manufacturing Activity for January. This is the last of the regional Fed manufacturing surveys for January.
9:00 AM: FHFA House Price Index for November. This was originally a GSE only repeat sales, however there is also an expanded index.
9:00 AM ET: S&P/Case-Shiller House Price Index for November.
This graph shows the Year over year change in the nominal seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the most recent report (the Composite 20 was started in January 2000).
The consensus is for a 6.9% year-over-year increase in the Comp 20 index.
9:45 AM: Chicago Purchasing Managers Index for January. The consensus is for a reading of 44.9, down from 45.1 in December.
10:00 AM: The Q4 Housing Vacancies and Homeownership report from the Census Bureau.
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
8:15 AM: The ADP Employment Report for January. This report is for private payrolls only (no government). The consensus is for 170,000 payroll jobs added in January, down from 235,000 added in December.
10:00 AM: Construction Spending for December. The consensus is for a 0.1% decrease in construction spending.
10:00 AM ET: Job Openings and Labor Turnover Survey for December from the BLS.
This graph shows job openings (black line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.
Job openings decreased in November to 10.458 million from 10.512 million in October
10:00 AM: ISM Manufacturing Index for January. The consensus is for the ISM to be at 48.0, down from 48.4 in December.
2:00 PM: FOMC Meeting Announcement. The FOMC is expected to announce a 25 bp hike in the Fed Funds rate.
2:30 PM: Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.
All day: Light vehicle sales for January. The consensus is for light vehicle sales to be 14.3 million SAAR in January, up from 13.3 million in December (Seasonally Adjusted Annual Rate).
This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the December sales rate.
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 200 thousand initial claims, up from 186 thousand last week.
8:30 AM: Employment Report for December. The consensus is for 185,000 jobs added, and for the unemployment rate to increase to 3.6%.
There were 223,000 jobs added in December, and the unemployment rate was at 3.5%.
This graph shows the job losses from the start of the employment recession, in percentage terms.
The pandemic employment recession was by far the worst recession since WWII in percentage terms. However, as of August 2022, the total number of jobs had returned and are now 1.24 million above pre-pandemic levels.
10:00 AM: ISM Services Index for January.
Friday, January 27, 2023
COVID Jan 27, 2023: Update on Cases, Hospitalizations and Deaths
by Calculated Risk on 1/27/2023 09:58:00 PM
COVID Metrics | ||||
---|---|---|---|---|
Now | Week Ago | Goal | ||
New Cases per Week2 | 295,140 | 332,606 | ≤35,0001 | |
Hospitalized2 | 29,411 | 34,723 | ≤3,0001 | |
Deaths per Week2 | 3,756 | 3,948 | ≤3501 | |
1my goals to stop weekly posts, 2Weekly for Cases, Currently Hospitalized, and Deaths 🚩 Increasing number weekly for Cases, Hospitalized, and Deaths ✅ Goal met. |
Click on graph for larger image.
This graph shows the weekly (columns) number of deaths reported.
Hotels: Occupancy Rate Down 6.2% Compared to Same Week in 2019
by Calculated Risk on 1/27/2023 04:09:00 PM
With the Martin Luther King Jr. holiday, U.S. hotel performance came in slightly lower than the previous week, according to STR‘s latest data through Jan. 21.The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.
Jan. 15-21, 2023 (percentage change from comparable week in 2019*):
• Occupancy: 54.2% (-6.2%)
• Average daily rate (ADR): $140.16 (+11.3%)
• evenue per available room (RevPAR): $75.97 (+4.4%)
*Due to the pandemic impact, STR is measuring recovery against comparable time periods from 2019. Year-over-year comparisons will once again become standard after Q1.
emphasis added
Click on graph for larger image.
The red line is for 2023, black is 2020, blue is the median, and dashed light blue is for 2022. Dashed purple is 2019 (STR is comparing to a strong year for hotels).
Realtor.com Reports Weekly Active Inventory Up 69% YoY; New Listings Down 5% YoY
by Calculated Risk on 1/27/2023 03:12:00 PM
Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report released today from Chief Economist Danielle Hale: Weekly Housing Trends View — Data Week Ending Jan 21, 2023. Note: They have data on list prices, new listings and more, but this focus is on inventory.
• Active inventory growth continued to climb with for-sale homes up 69% above one year ago. In January, the housing market built further on the impressive growth seen in late 2022. But there is still room for more. Even after surging more than 50% in December 2022, the number of homes on the market trailed pre-pandemic counts by nearly 40%.Here is a graph of the year-over-year change in inventory according to realtor.com.
...
• New listings–a measure of sellers putting homes up for sale–were again down, this week by 5% from one year ago. This marks the twenty-ninth consecutive week of year-over-year declines in homeowners listing their homes for sale, but this week’s decline was not only smaller than dip, the average decline in new listings so far this year is about half what we saw in the fourth quarter of 2022. As mortgage rates rose and the market shifted from a distinct seller’s market to one that might better be described as a nobody’s market, we saw homeowners retrench, and the number of new listings fell. Although the number of new listings is still declining, at the current pace we could see a reversal of that trend or more new listings than one year ago as soon as February.
In early 2022, inventory was declining rapidly, so the year-over-year change is up sharply.