by Calculated Risk on 4/28/2023 03:28:00 PM

From CoStar: STR: Group Demand Boosts Weekly US Hotel Performance in Mid-April

U.S. hotel performance increased from the previous week, according to STR‘s latest data through April 22.

April 16-22, 2023 (percentage change from comparable week in 2022):

• Occupancy: 67.2% (+2.3%)
• Average daily rate (ADR): $155.76 (+4.2%)
• Revenue per available room (RevPAR): $104.64 (+6.6%)
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 2023, black is 2020, blue is the median, and dashed light blue is for 2022.  Dashed purple is for 2018, the record year for hotel occupancy. 

The 4-week average of the occupancy rate is close to the median rate for the period 2000 through 2020 (Blue).

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

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

by Calculated Risk on 4/28/2023 01:41:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency decreased to 0.59% in March from 0.62% in February. The serious delinquency rate is down from 1.01% in March 2022.  This is below the pre-pandemic levels.

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), 1.93% are seriously delinquent (down from 2.04% in February). 

For loans made in 2005 through 2008 (1% of portfolio), 3.11% are seriously delinquent (down from 3.31%), 

 For recent loans, originated in 2009 through 2021 (98% of portfolio), 0.48% are seriously delinquent (down from 0.51%). So, Fannie is still working through a few poor performing loans from the bubble years.

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

Freddie Mac reported earlier.

by Calculated Risk on 4/28/2023 11:16:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Increased Slightly in March; Up 1.0% Year-over-year

A brief excerpt:

Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.3% month-over-month on a seasonally adjusted (SA) basis in March, putting the National FMHPI down 1.3% SA from its June 2022 peak, and down 2.6% Not Seasonally Adjusted (NSA) from the peak.

On a year-over-year basis, the National FMHPI was up 1.0% in March, down from 2.1% YoY in February.  The YoY increase peaked at 19.2% in July 2021. ...

In March, 24 states and D.C. were below their 2022 peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peak were in Idaho (-8.8%), Nevada (-7.9%), Arizona (-6.8%), Utah (-6.5%), Washington (-6.3%), California (-5.6%), and Colorado (-4.4%).

In March, house prices in 9 states and D.C. were down YoY, led by Idaho (-7.5% YoY), Nevada (-6.3%) and Washington (-5.1%).

For cities (Core-based Statistical Areas, CBSA), here are the 30 cities with the largest declines from the peak, seasonally adjusted.

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

by Calculated Risk on 4/28/2023 08:59:00 AM

Here is a graph of the year-over-year change in shelter from the CPI report and housing from the PCE report this morning, both through March 2023:

CPI Shelter was up 8.2% year-over-year in March, up from 8.1% in February. 

Housing (PCE) was up 8.3% YoY in March, from 8.2% in February.

Since rents are soft and "Apartment Market Continues to Loosen" this means both CPI and PCE measures are currently overstating actual inflation.

by Calculated Risk on 4/28/2023 08:40:00 AM

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

Personal income increased $67.9 billion (0.3 percent) in March, according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $71.7 billion (0.4 percent) and personal consumption expenditures (PCE) increased $8.2 billion (less than 0.1 percent).

The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.3 percent. Real DPI increased 0.3 percent in March and Real PCE decreased less than 0.1 percent; goods decreased 0.4 percent and services increased 0.1 percent.
emphasis added

The March PCE price index increased 4.2 percent year-over-year (YoY), down from 5.1 percent YoY in February, and down from the recent peak of 7.0 percent in June 2022.

The PCE price index, excluding food and energy, increased 4.6 percent YoY, down from 4.7 percent in February, and down from the recent peak of 5.4 percent in February 2022.

The following graph shows real Personal Consumption Expenditures (PCE) through March 2023 (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 and PCE were slightly above expectations.

Inflation was close to expectations.

by Calculated Risk on 4/27/2023 08:50:00 PM

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

Friday:
• At 8:30 AM ET, Personal Income and Outlays, March 2023. The consensus is for a 0.2% increase in personal income, and for a 0.1% decrease in personal spending. And for the Core PCE price index to increase 0.3%.  PCE prices are expected to be up 4.1% YoY, and core PCE prices up 4.5% YoY.

• At 9:45 AM, Chicago Purchasing Managers Index for April. The consensus is for a reading of 43.5, down from 43.8 in March.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Final for April). The consensus is for a reading of 63.5.

by Calculated Risk on 4/27/2023 02:52:00 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 Apr 22, 2023

• Active inventory was up at a slower pace, with for-sale homes up just 39% above one year ago. The number of homes for sale continues to climb, but hesitant seller participation is limiting the pace of growth. As a result, a greater share of current for-sale inventory is new construction.
...
• New listings–a measure of sellers putting homes up for sale–were down again this week, by 21% from one year ago. The number of newly listed homes has been lower than the same time the previous year for the past 42 weeks.

Here is a graph of the year-over-year change in inventory according to realtor.com. 

Inventory is still up year-over-year - from record lows - however, the YoY increase has slowed sharply recently.  

This was the smallest YoY increase since October.

The recent trend suggests active inventory could be down YoY in Q3!

by Calculated Risk on 4/27/2023 12:00:00 PM

Today, in the Calculated Risk Real Estate Newsletter: NMHC: "Apartment Market Continues to Loosen"

A brief excerpt:

From the NMHC: Apartment Market Continues to Loosen, Transactions Pull Back Further Amidst Economic Uncertainty

“Apartment operators reported an uptick in vacancies and concessions this quarter,” noted NMHC’s Vice President of Research Caitlin Sugrue Walter.
...
• The Market Tightness Index came in at 31 this quarter—below the breakeven level (50)—indicating looser market conditions for the third consecutive quarter. More than half of respondents (51%) reported markets to be looser than three months ago, while only 14% thought markets have become tighter. Meanwhile, around a third of respondents (34%) thought that market conditions were unchanged over the past three months.

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

by Calculated Risk on 4/27/2023 10:03:00 AM

From the NAR: Pending Home Sales Decreased 5.2% in March

Pending home sales decreased in March for the first time since November 2022, according to the National Association of REALTORS®. Three U.S. regions posted monthly losses, while the South increased. All four regions saw year-over-year declines in transactions.

The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – waned by 5.2% to 78.9 in March. Year over year, pending transactions dropped by 23.2%. An index of 100 is equal to the level of contract activity in 2001.

"The lack of housing inventory is a major constraint to rising sales," said NAR Chief Economist Lawrence Yun. "Multiple offers are still occurring on about a third of all listings, and 28% of homes are selling above list price. Limited housing supply is simply not meeting demand nationally."
...
The Northeast PHSI fell 8.1% from last month to 66.6, a decline of 24.3% from March 2022. The Midwest index dropped 10.7% to 75.7 in March, down 21.5% from one year ago.

The South PHSI improved 0.2% to 99.6 in March, falling 19.8% from the prior year. The West index decreased 8.0% in March to 59.4, reducing 32.2% from March 2022.
emphasis added

This is way below expectations of a 1.0% decrease for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in April and May.

by Calculated Risk on 4/27/2023 08:38:00 AM

From the BEA: Gross Domestic Product, First Quarter 2023 (Advance Estimate)

Real gross domestic product (GDP) increased at an annual rate of 1.1 percent in the first quarter of 2023, according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.6 percent.

The increase in real GDP reflected increases in consumer spending, exports, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by decreases in private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased .

The increase in consumer spending reflected increases in both goods and services. Within goods, the leading contributor was motor vehicles and parts. Within services, the increase was led by health care and food services and accommodations. Within exports, an increase in goods (led by consumer goods, except food and automotive) was partly offset by a decrease in services (led by transport). Within federal government spending, the increase was led by nondefense spending. The increase in state and local government spending primarily reflected an increase in compensation of state and local government employees. Within nonresidential fixed investment, increases in structures and intellectual property products were partly offset by a decrease in equipment.

The decrease in private inventory investment was led by wholesale trade (notably, machinery, equipment, and supplies) and manufacturing (led by other transportation equipment as well as petroleum and coal products). Within residential fixed investment, the leading contributor to the decrease was new single-family construction. Within imports, the increase reflected an increase in goods (mainly durable consumer goods and automotive vehicles, engines, and parts).
emphasis added

PCE increased at a 3.7% annual rate, and residential investment decreased at a 4.2% rate. The advance Q1 GDP report, with 1.1% annualized increase, was below expectations.

The decrease in inventories subtracted 2.26 percentage points from GDP.

I'll have more later ...