by Calculated Risk on 7/17/2023 08:30:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Barely Budge To Start The New Week

The average lender is right in line with the rates seen on Friday (which are still substantially lower than the rates seen on the previous Friday). In fact, the average lender is still roughly a quarter of percent lower versus July 6/7. [30 year fixed 6.90%]
emphasis added

Tuesday:
• At 8:30 AM ET, Retail sales for June is scheduled to be released.  The consensus is for 0.5% increase in retail sales.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for June. The consensus is for a no change in Industrial Production, and for Capacity Utilization to decrease to 79.5%.

• At 10:00 AM, The July NAHB homebuilder survey. The consensus is for a reading of 55, unchanged from 55. Any number above 50 indicates that more builders view sales conditions as good than poor.

by Calculated Risk on 7/17/2023 04:16:00 PM

Interesting - the states that have seen price decreases (in the West) have the most current loans (see bottom).  There is no financial distress related to price decreases.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 0.44% in June

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 5 basis points from [0.49%] of servicers’ portfolio volume in the prior month to [0.44%] as of June 30, 2023. According to MBA’s estimate, 220,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 7.9 million borrowers since March 2020.

In June 2023, the share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.21%. Ginnie Mae loans in forbearance decreased 13 basis points to 0.93%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 6 basis points to 0.52%.

“Mortgage forbearance has declined because most homeowners have maintained or improved their financial health,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Recent reporting by the U.S. Bureau of Labor Statistics shows continued job growth in June, and a 3.6 percent unemployment rate. The employment situation tracks with homeowners’ ability to make mortgage payments.”
emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.

The share of forbearance plans has been decreasing, declined to 0.44% in June from 0.49% in May.

At the end of June, there were about 220,000 homeowners in forbearance plans.

The second graph shows the percent of mortgages current by state.

From the MBA:

• Total loans serviced that were current (not delinquent or in foreclosure) as a percent of servicing portfolio volume (#) remained flat at 96.12% (on a non-seasonally adjusted basis) in June 2023 compared to May 2023.

• The five states with the highest share of loans that were current as a percent of servicing portfolio: Washington, Idaho, Colorado, Oregon, and California.

• The five states with the lowest share of loans that were current as a percent of servicing portfolio: Mississippi, Louisiana, New York, Indiana, and West Virginia.

by Calculated Risk on 7/17/2023 12:57:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Will house prices decline further later this year?

A brief excerpt:

In November 2021, I wrote Inventory will Tell the Tale and recounted how changes in housing inventory had helped me forecast the housing market at several key points.

I believe inventory will tell the tale. That is why I watch inventory closely.

So, based on the low level of inventory in March 2022, I wrote Housing: Don't Compare the Current Housing Boom to the Bubble and Bust, and I expected a decline in real house prices (inflation adjusted), and little decline in nominal prices.

I noted we could be fairly confident that we wouldn’t see cascading nominal price declines like during the housing bust since there would be few distressed sales.

Then, as inventory picked up sharply in 2022, I adjusted my outlook in October 2022 and wrote House Prices: 7 Years in Purgatory. I noted that a 10% decline in nominal prices “now seemed likely”.

Here is a graph of active listing from Realtor.com through June. Note the surge in inventory in mid-2022 as mortgage rates increased.

However, the inventory surge in 2022 was somewhat of a head fake! Some potential sellers quickly listed their homes, probably remembering what happened with house prices in the 2006 to 2011 period, but that surge ended pretty quickly.

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

by Calculated Risk on 7/17/2023 08:21:00 AM

Altos reports that active single-family inventory was up 1.2% week-over-week.

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of July 14th, inventory was at 470 thousand (7-day average), compared to 465 thousand the prior week.   

Year-to-date, inventory is down 4.1%.  And inventory is up 16.0% from the seasonal bottom 13 weeks ago.

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 record low for the same week in 2021, but below last year and still well below normal levels.

Inventory was down 7.5% compared to the same week in 2022 (last week it was down 4.6%), and down 50.5% compared to the same week in 2019 (last week down 51.0%). 

It appears likely same week inventory will be below 2022 levels for the remainder of the year. A key will be if inventory falls below the record levels in 2021 (only about 21% above 2021 levels).

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 7/16/2023 08:26:00 PM

NOTE: Follow on threads at calculatedriskblog

Weekend:
• Schedule for Week of July 16, 2023

• LA Port Inbound Traffic Down Sharply YoY in June

Monday:
• 8:30 AM ET, The New York Fed Empire State manufacturing survey for July. The consensus is for a reading of 0.0, down from 6.6.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 futures are down 7 and DOW futures are down 57 (fair value).

Oil prices were up over the last week with WTI futures at $75.42 per barrel and Brent at $79.87 per barrel. A year ago, WTI was at $100, and Brent was at $112 - so WTI oil prices are down about 25% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.53 per gallon. A year ago, prices were at $4.52 per gallon, so gasoline prices are down $0.99 per gallon year-over-year.

by Calculated Risk on 7/16/2023 08:15:00 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 1.8% in June compared to the rolling 12 months ending in May.   Outbound traffic decreased 0.3% 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 June, and exports were down 3% YoY.  The next 4 or 5 months should see the most monthly imports this year.

The volume of containers unloaded last year was much stronger than normal because of all the ships waiting to unload.

by Calculated Risk on 7/15/2023 02:36:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• 3rd Look at Local Housing Markets in June

• Lawler: Update on Demographic Trends, and Population and Household Projections Through 2025

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

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

• 2nd Look at Local Housing Markets in June

• Black Knight Mortgage Monitor: Home Prices Increased Month-to-month to New Record High 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 7/15/2023 08:11:00 AM

The key reports this week are June Retail Sales, Housing Starts and Existing Home Sales.

For manufacturing, the June Industrial Production report and the July New York and Philly Fed manufacturing surveys will be released.

----- Monday, July 17th -----
8:30 AM: The New York Fed Empire State manufacturing survey for July. The consensus is for a reading of 0.0, down from 6.6.

----- Tuesday, July 18th -----
8:30 AM: Retail sales for June is scheduled to be released.  The consensus is for 0.5% 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).

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for June.

This graph shows industrial production since 1967.

The consensus is for a no change in Industrial Production, and for Capacity Utilization to decrease to 79.5%.

10:00 AM: The July NAHB homebuilder survey. The consensus is for a reading of 55, unchanged from 55. Any number above 50 indicates that more builders view sales conditions as good than poor.

----- Wednesday, July 19th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM ET: Housing Starts for June.

This graph shows single and multi-family housing starts since 1968.

The consensus is for 1.450 million SAAR, down from 1.631 million SAAR in May.

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

----- Thursday, July 20th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 246 thousand initial claims, up from 237 thousand last week.

8:30 AM: the Philly Fed manufacturing survey for July. The consensus is for a reading of -10.0, up from -13.7.

10:00 AM: Existing Home Sales for June from the National Association of Realtors (NAR). The consensus is for 4.23million SAAR, down from 4.30 million last month.

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

----- Friday, July 21st -----
10:00 AM: State Employment and Unemployment (Monthly) for June 2023

by Calculated Risk on 7/14/2023 08:11:00 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).  

The last few months have seen a positive trend.

COVID Metrics
	Now	Week Ago	Goal
Hospitalized2	5,178	5,494	≤3,0001
Deaths per Week2	468	550	≤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 7/14/2023 09:54:00 AM

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

A brief excerpt:

This is the third look at local markets in June. I’m tracking a sample of 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 June were mostly for contracts signed in April and May. Since 30-year fixed mortgage rates were in the 6.4% range in April and May - compared to the 5% range the previous year - closed sales were down year-over-year in June.
...
In June, sales in these markets were down 15.3%. In May, these same markets were down 16.1% YoY Not Seasonally Adjusted (NSA).

This is a smaller YoY decline NSA than in May for these markets. Note that there were the same number of selling days each year in June 2022 and June 2023.

A key factor in the smaller YoY decline was that sales were steadily declining last year due to higher mortgage rates. ...

This sample data suggests the June existing home sales report will show another significant YoY decline - and probably below the May sales rate of 4.3 million (SAAR) - and the 22nd consecutive month with a YoY decline in sales.

Note: the NAR is scheduled to release June existing home sales next Thursday, July 20th, and the consensus expectation is for the NAR to report sales of 4.23 million on a Seasonally Adjusted Annual Rate (SAAR) basis, down from 4.30 million in May.

Many more local markets to come!

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