by Calculated Risk on 3/07/2023 08:00:00 AM

Notes: This CoreLogic House Price Index report is for January. The recent Case-Shiller index release was for December. The CoreLogic HPI is a three-month weighted average and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic: US Annual Home Price Growth Continues Single-Digit Slowdown in January

CoreLogic® ... today released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for January 2023.

U.S. home prices continued their gradual free fall in January, with the 5.5% annual gain down for the ninth straight month and the lowest recorded since June 2020. Deceleration was particularly noticeable in the Western U.S. and other states and metro areas that saw substantial appreciation over the past few years. Three Northwestern states (along with Washington, D.C.) posted at least slight annual declines as migration patterns that began during the pandemic shifted, slowing demand and driving price decreases.

"While 2023 kicked off on a more optimistic note for the U.S. housing market, recent mortgage rate volatility highlights how much uncertainty remains," said Selma Hepp, chief economist at CoreLogic. "Nevertheless, the continued shortage of for-sale homes is likely to keep price declines modest, which are projected to top out at 3% peak to trough."

"Home price depreciation and strong income growth are expected to boost affordability, which is particularly important for first-time buyers," Hepp continued. "This group has accounted for a higher share of mortgage applications since last summer, as first-time buyers don't need to surrender an extremely low mortgage rate like current homeowners."
...
U.S. home prices (including distressed sales) increased by 5.5% year over year in January 2023 compared to January 2022. On a month-over-month basis, home prices declined by 0.2% compared to December 2022.
emphasis added

by Calculated Risk on 3/06/2023 07:11:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Started Lower, But Rose Intraday

Mortgage rates have been hovering around the highest levels in months over the past 2 weeks, but had made a bit of progress by the end of last week. The improvement carried over into the early part of today. In other words, the average lender was offering just slightly lower rates this morning compared to the end of last week.

Unfortunately, as the day progressed, the bond market began losing ground. Bonds dictate day-to-day changes in rates. As such, the average mortgage lender was forced to recall their initial rate sheets and "reprice" to slightly higher rates.

This brings the average lender up to the 7% neighborhood for the average conventional conforming 30yr fixed scenario. [30 year fixed 6.95%]
emphasis added

Tuesday:
• At 8:00 AM: CoreLogic House Price index for January.

• At 10:00 AM: Testimony, Fed Chair Jerome Powell, Semiannual Monetary Policy Report to the Congress, Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs

by Calculated Risk on 3/06/2023 09:55:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Black Knight Mortgage Monitor: Home Prices Declined in January, "on pace to fall below 0% by March/April"

A brief excerpt:

Here is a graph of the Black Knight HPI. The index is still up 3.4% year-over-year but declined for the seventh consecutive month in January and is now 5.5% off the peak in June 2022.

• Home prices fell again in January, pulling back by 0.24% from December and a more modest 0.13% on a seasonally adjusted basis

• That’s the smallest monthly decline in seven months, as falling interest rates and improving affordability in late 2022/early 2023 ran into tightening supply

• All in, home prices are now 5.5% off their June peak and a more modest 2.9% off peak when adjusting for typical seasonal trends

• The annual home price growth rate fell to 3.43% in January – more than a full percentage point below the 30-year average – and is on pace to fall below 0% by March/April

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

by Calculated Risk on 3/06/2023 08:30:00 AM

Altos reports that active single-family inventory was down 2.6% week-over-week. Usually inventory bottoms in early February, so we'd expect inventory to bottom seasonally soon.

Here are the same week inventory changes for the last five years:

2023: -11.0K

2022: -3.7K 

2021: -11.5K

2020: +1.0K

2019: -1.4K

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of March 3rd, inventory was at 419 thousand (7-day average), compared to 430 thousand the prior week.   

The second graph shows the seasonal pattern for active single-family inventory since 2015.

The red line is for 2023.  The black line is for 2019.  Note that inventory is up from the previous two years (the record low was in 2022), but still well below normal levels.

Inventory was up 74.3% compared to the same week in 2022 (last week it was up 76.2%), and down 48.8% compared to the same week in 2019 (last week down 47.5%). 

A key will be when inventory starts increasing in 2023 - so far inventory has declined about 14.7% over the first nine weeks of 2023.

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 3/05/2023 07:38:00 PM

Weekend:
• Schedule for Week of March 5, 2023

Monday:
• No major economic releases scheduled.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 futures are down 4 and DOW futures are down 30 (fair value).

Oil prices were up over the last week with WTI futures at $79.68 per barrel and Brent at $85.83 per barrel. A year ago, WTI was at $116, and Brent was at $124 - so WTI oil prices are DOWN 30% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.36 per gallon. A year ago, prices were at $4.00 per gallon, so gasoline prices are down $0.64 per gallon year-over-year.

by Calculated Risk on 3/05/2023 09:36:00 AM

Here is another monthly update on framing lumber prices.

This graph shows CME random length framing futures through March 3rd.

Lumber is currently at $369 per 1000 board feet.

This is down from the peak of $1,733, and down 72% from $1,441 a year ago.

Prices are down 8% compared to the same week in 2019, and below the pre-pandemic levels of around $400.

Click on graph for larger image.

There is somewhat of a seasonal demand for lumber, and lumber prices usually peak in April or May.

It is unlikely we will see a significant runup in prices this Spring due to the housing slowdown.

by Calculated Risk on 3/04/2023 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• Case-Shiller: National House Price Index "Decline Continued" to 5.8% year-over-year increase in December

• Year-over-year Rent Growth Continues to Decelerate

• Freddie Mac House Price Index Declines for 7th Consecutive Month in January

• Lawler: AMH Net Seller of Existing Single-Family Homes, “Investor” Home Purchases Plunged

• Inflation Adjusted House Prices 3.9% Below Peak Price-to-rent index is 7.1% below recent peak

• Measures of Shelter in the CPI and PCE price indexes Still Increasing

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!

by Calculated Risk on 3/04/2023 08:11:00 AM

The key report scheduled for this week is the February employment report.

Fed Chair Powell presents the Semiannual Monetary Policy Report to the Congress on Tuesday and Wednesday.

----- Monday, March 6th -----
No major economic releases scheduled.

----- Tuesday, March 7th -----
8:00 AM: Corelogic House Price index for January.

10:00 AM: Testimony, Fed Chair Jerome Powell, Semiannual Monetary Policy Report to the Congress, Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs

----- Wednesday, March 8th -----
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 February. This report is for private payrolls only (no government). The consensus is for 195,000 payroll jobs added in February, up from 106,000 added in January.

10:00 AM ET: Job Openings and Labor Turnover Survey for January 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.

Jobs openings increased in December to 11.0 million from 10.4 million in November.

10:00 AM: Testimony, Fed Chair Jerome Powell, Semiannual Monetary Policy Report to the Congress, Before the U.S. House Financial Services Committee

2:00 PM: the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

----- Thursday, March 9th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 195 thousand initial claims, up from 190 thousand last week.

12:00 PM: Q4 Flow of Funds Accounts of the United States from the Federal Reserve.

----- Friday, March 10th -----
8:30 AM: Employment Report for February.   The consensus is for 200,000 jobs added, and for the unemployment rate to be unchanged at 3.4%.

There were 517,000 jobs added in January, and the unemployment rate was at 3.4%.

This graph shows the job losses from the start of the employment recession, in percentage terms.

The current employment recession was by far the worst recession since WWII in percentage terms.

As of January, total jobs were 2.70 million above pre-pandemic levels. This was the last update for this graph this employment cycle.

by Calculated Risk on 3/03/2023 09:14:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

On COVID (focus on hospitalizations and deaths).  Data is now weekly.

The winter surge was much smaller in 2023 than for the previous two years, and hopefully cases, hospitalizations and deaths will continue to decline - and set new pandemic lows in a few months.

COVID Metrics
	Now	Week Ago	Goal
New Cases per Week2	226,618	238,714	≤35,0001
Hospitalized2	20,805	22,509	≤3,0001
Deaths per Week2	2,290	2,368	≤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.

The pandemic low for weekly deaths was the week of July 7, 2021, at 1,690 deaths and for cases, the low was 82,186.  For hospitalizations, the low was 9,821. 

by Calculated Risk on 3/03/2023 04:08:00 PM

From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission.

Coal, chemicals, and grain combined account for more than half of U.S. non-intermodal rail volume. When all three are down, it’s extremely likely total carloads are down too. That’s what happened in February 2023 compared with February 2022: total carloads fell by 15,101 carloads, or 1.6%.
...
U.S. intermodal volume fell 8.4% in February, its 12th straight decline.
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 2021, 2022 and 2022:

Total originated U.S. rail carloads in February 2023 were 905,744, down 1.6%, or 15,101 carloads, from February 2022. Carloads averaged 226,436 per week in February 2023. February 2021 was lower (an average of just 206,201 per week, thanks to severe weather that month), but otherwise February 2023 was the lowestvolume February for total carloads in our records that go back to 1988.

The second graph shows the six-week average (not monthly) of U.S. intermodal in 2021, 2022 and 2023: (using intermodal or shipping containers):

Intermodal originations, which are not included in carloads, totaled 943,979 in February 2023, down 8.4%, or 86,351 containers and trailers, from February 2022. The weekly average in February 2023 was 235,995, the fewest for February since 2015 (when volumes were down due to labor strife as West Coast ports).

The 8.4% year-over-year decline in February was the 12th straight decline and the largest percentage decline in those 12 months.