by Calculated Risk on 6/18/2023 08:55:00 AM

Notes: The expansion to the Panama Canal was completed in 2016 (As I noted several years ago), and some of the traffic that used the ports of Los Angeles and Long Beach is probably going through the canal. This might be impacting TEUs on the West Coast.

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12-month average.

Click on graph for larger image.

On a rolling 12-month basis, inbound traffic decreased 2.0% in May compared to the rolling 12 months ending in April.   Outbound traffic decreased 0.6% compared to the rolling 12 months ending the previous month.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year.

Imports were down 18% YoY in May, and exports were down 6% YoY.  The volume of containers unloaded last year was much stronger because of all the ships waiting to unload.

It is possible that exports have bottomed after declining for several years (even prior to the pandemic).

by Calculated Risk on 6/17/2023 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• Lawler: Early Read on Existing Home Sales in May

• 3rd Look at Local Housing Markets in May

• Lawler: Update on Mortgage/Treasury Spreads

• Part 2: Current State of the Housing Market; Overview for mid-June

• Part 1: Current State of the Housing Market; Overview for mid-June

• 2nd Look at Local Housing Markets in May

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 6/17/2023 08:11:00 AM

The key reports this week are May Housing Starts and Existing Home Sales.

Fed Chair Powell provides the Semiannual Monetary Policy Report to Congress on Wednesday and Thursday.

----- Monday, June 19th -----
All US markets will be closed in observance of Juneteenth National Independence Day

10:00 AM: The June NAHB homebuilder survey. The consensus is for a reading of 51, up from 50 last month. Any number above 50 indicates that more builders view sales conditions as good than poor.

----- Tuesday, June 20th -----
8:30 AM ET: Housing Starts for May.

This graph shows single and total housing starts since 1968.

The consensus is for 1.405 million SAAR, up from 1.401 million SAAR in April.

----- Wednesday, June 21st -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

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

During the day: The AIA's Architecture Billings Index for May (a leading indicator for commercial real estate).

----- Thursday, June 22nd -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 266 thousand initial claims, up from 262 thousand last week.

8:30 AM ET: Chicago Fed National Activity Index for May. This is a composite index of other data.

10:00 AM: Existing Home Sales for May from the National Association of Realtors (NAR). The consensus is for 4.24 million SAAR, down from 4.28 million.

The graph shows existing home sales from 1994 through the report last month.

Housing economist Tom Lawler expects the NAR to report sales of 4.25 million SAAR for May.

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

11:00 AM: the Kansas City Fed manufacturing survey for June. 

----- Friday, June 23rd -----
No major economic releases scheduled.

by Calculated Risk on 6/16/2023 09:17:00 PM

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

Due to changes at the CDC, weekly cases are no longer updated.

After the first few weeks, the pandemic low for weekly deaths had been the week of July 7, 2021, at 1,690 deaths (until recently).  

For COVID hospitalizations, the previous low was 9,821 (until recently).

COVID Metrics
	Now	Week Ago	Goal
Hospitalized2	6,133	6,642	≤3,0001
Deaths per Week2	588	682	≤3501
1my goals to stop weekly posts, 2Weekly for Currently Hospitalized, and Deaths 🚩 Increasing number weekly for Hospitalized and Deaths ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported.

For deaths, I'm currently using 3 weeks ago for "now", since the most recent two weeks will be revised significantly.

by Calculated Risk on 6/16/2023 05:35:00 PM

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, comprising over 225,000 transactions, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 4.25 million in May, down 0.7% from April’s preliminary pace and down 21.3% from last May’s seasonally adjusted pace. Unadjusted sales should show a smaller YOY % decline, reflecting this May’s higher business day count relative to last May’s.

Local realtor/MLS reports suggest that the median existing single-family home sales price last month was down by about 0.5% from last May.

by Calculated Risk on 6/16/2023 03:27:00 PM

Today, in the Calculated Risk Real Estate Newsletter: 3rd Look at Local Housing Markets in May

A brief excerpt:

This is the third look at local markets in May. I’m tracking about 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.

Closed sales in May were mostly for contracts signed in March and April. Since 30-year fixed mortgage rates were in the 6% to 6.5% range in March and April - compared to the 4% to 5% range the previous year - closed sales were down significantly year-over-year in May.
...
In May, sales in these markets were down 16.3%. In April, these same markets were down 24.9% YoY Not Seasonally Adjusted (NSA).

This is a smaller YoY decline NSA than in April for these markets, however seasonally adjusted, it is closer. Another factor in the smaller YoY decline was that sales were steadily declining last year due to higher mortgage rates.

This data suggests the May existing home sales report will show another significant YoY decline and the 21st consecutive month with a YoY decline in sales.

More local markets to come!

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

by Calculated Risk on 6/16/2023 09:52:00 AM

SPECIAL NOTE: The CME group discontinued the Random Length Lumber Futures contract on May 16th. I've now switched to a new physically-delivered Lumber Futures contract that was started in August 2022. Unfortunately, this impacts long term price comparisons.

This graph shows CME random length framing futures through May 16th (blue), and the new physically-delivered Lumber Futures (LBR) contract starting in August 2022 (Red).

LBR is currently at $522 per 1000 board feet.

Click on graph for larger image.

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

We didn't see a significant runup in prices this Spring due to the housing slowdown.

by Calculated Risk on 6/16/2023 08:29:00 AM

From BofA:

Today's data left our 2Q US GDP tracking unchanged at 1.3% q/q saar and decreased our 1Q tracker from 2.0% to 1.8%. [June 15th estimate]
emphasis added

From Goldman:

[W]e lowered our Q2 GDP tracking estimate by 0.1pp to +1.7% (qoq ar) on the back of softer consumption growth. [June 15th estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2023 is 1.8 percent on June 15, down from 2.2 percent on June 8. [June 15th estimate]

by Calculated Risk on 6/15/2023 05:47:00 PM

From STR: STR: U.S. hotel results for week ending 10 June

U.S. hotel performance jumped from the previous week, while year-over-year comparisons were mixed, according to STR‘s latest data through 10 June.

4-10 June 2023 (percentage change from comparable week in 2022):

• Occupancy: 69.4% (-1.6%)
• Average daily rate (ADR): US$157.69 (+0.5%)
• Revenue per available room (RevPAR): US$109.38 (-1.2%)
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 at the median rate for the period 2000 through 2022 (Blue).

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

The 4-week average of the occupancy rate will increase during the summer travel season.

by Calculated Risk on 6/15/2023 02:16:00 PM

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report from economist Jiayi Xu: Weekly Housing Trends View — Data Week Ending June 10th, 2023

• Active inventory growth slowed again, with for-sale homes up just 10% above one year ago. The number of homes for sale continues to grow, but compared to one year ago, the pace is slowing. While today’s shoppers still have many more homes to consider than last year’s shoppers did, worries about high inflation, rising interest rates, and escalating home prices have caused many prospective buyers, especially more first-time buyers, to postpone their plans to purchase a home. This, in turn, has contributed to an increase in the number of homes listed for sale. However, the ongoing decrease in new listings has restrained the growth of active inventory, and there is a possibility of further deceleration in the upcoming weeks.
...
• New listings–a measure of sellers putting homes up for sale–were down again this week, by 22% from one year ago. The number of newly listed homes has been lower than the same time the previous year for the past 49 weeks. As the year-over-year declines fluctuated in the -20% to -26% range, there are no clear signs of sellers re-entering the market at a steady pace. The large decline in new listings is primarily driven by the mortgage “locked-in” as many existing homeowners benefit from mortgage rates that are significantly lower than the current level.

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 May 2022.

The recent trend suggests active inventory could be down YoY in late June or early July!