by Calculated Risk on 8/14/2023 10:10:00 AM

Today, in the Calculated Risk Real Estate Newsletter: 2nd Look at Local Housing Markets in July

A brief excerpt:

This is the second look at local markets in July. 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 July were mostly for contracts signed in May and June. Since 30-year fixed mortgage rates were in the 6.4% range in May, and 6.7% in June, compared to the low-to-mid 5% range the previous year, closed sales were down year-over-year in July.
...
In July, sales in these markets were down 13.9%. In June, these same markets were down 15.9% YoY Not Seasonally Adjusted (NSA).

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

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

This data suggests the July existing home sales report will show another significant YoY decline - and probably close to the June sales rate of 4.16 million (SAAR) - and the 23rd consecutive month with a YoY decline in sales.

Many more local markets to come!

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

by Calculated Risk on 8/14/2023 08:11:00 AM

Altos reports that active single-family inventory was up 0.9% week-over-week.

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of August 11th, inventory was at 492 thousand (7-day average), compared to 488 thousand the prior week.   

Year-to-date, inventory is up 0.3%.  And inventory is up 21.4% from the seasonal bottom 17 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 10.5% compared to the same week in 2022 (last week it was down 10.3%), and down 48.5% compared to the same week in 2019 (last week down 49.3%). 

It appears same week inventory will be below 2022 levels for the remainder of the year. It is possible that inventory will fall below the record lows in 2021 and early 2022 later this year or in early 2024, but currently that seems unlikely.

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 8/13/2023 06:12:00 PM

Weekend:
• Schedule for Week of August 13, 2023

Monday:
• No major economic releases scheduled.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 futures are up 10 and DOW futures are up 52 (fair value).

Oil prices were up over the last week with WTI futures at $83.19 per barrel and Brent at $86.81 per barrel. A year ago, WTI was at $95, and Brent was at $104 - so WTI oil prices are down about 12% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.82 per gallon. A year ago, prices were at $3.93 per gallon, so gasoline prices are down $0.11 per gallon year-over-year.

by Calculated Risk on 8/13/2023 09:25:00 AM

Here is another monthly update on lumber prices.

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 since the new contract was priced about 24% higher than the old random length contract for the period both contracts were available.

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

LBR is currently at $496.00 per 1000 board feet, down 29% from $694.50 a year ago.

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 8/12/2023 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• The Long-Term Housing and Population Shift

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

• 1st Look at Local Housing Markets in July

• Black Knight Mortgage Monitor: Home Prices Increased Month-to-month to New Record High in June

• Atlanta Fed: Home Ownership Affordability Monitor

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 8/12/2023 08:11:00 AM

The key reports this week are July Retail Sales and Housing Starts.

For manufacturing, the Industrial Production report will be released.

----- Monday, August 14th -----
No major economic releases scheduled.

----- Tuesday, August 15th -----
8:30 AM: Retail sales for July is scheduled to be released.  The consensus is for 0.4% 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)

8:30 AM: The New York Fed Empire State manufacturing survey for August. The consensus is for a reading of -0.7, down from 1.1.

10:00 AM: The August NAHB homebuilder survey. The consensus is for a reading of 56, unchanged from 56. Any number above 50 indicates that more builders view sales conditions as good than poor.

----- Wednesday, August 16th -----
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 July.

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

The consensus is for 1.440 million SAAR, up from 1.434 million SAAR in June.

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

This graph shows industrial production since 1967.

The consensus is for a 0.3% increase in Industrial Production, and for Capacity Utilization to increase to 79.2%.

2:00 PM: FOMC Minutes, Meeting of July 25-26, 2023

----- Thursday, August 17th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 256 thousand initial claims, up from 248 thousand last week.

8:30 AM: the Philly Fed manufacturing survey for August. The consensus is for a reading of -10.0, up from -13.5.

----- Friday, August 18th -----
10:00 AM: State Employment and Unemployment (Monthly) for July 2023

by Calculated Risk on 8/11/2023 08:02:00 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).  

Recently hospitalizations have been increasing from a low of 5,146.

The last few months have seen a positive trend.

COVID Metrics
	Now	Week Ago	Goal
Hospitalized2🚩	6,829	6,151	≤3,0001
Deaths per Week2	437	473	≤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 8/11/2023 01:58:00 PM

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report from Danielle Hale: Weekly Housing Trends View — Data Week Ending Aug 5, 2023

• Active inventory declined, with for-sale homes lagging behind year ago levels by 9%.. This week marks a 7th consecutive decline in the number of homes actively for sale compared to the prior year, and the gap is growing.

• New listings–a measure of sellers putting homes up for sale–were down again this week, by 14% from one year ago. For 57 weeks, there have been fewer newly listed homes compared to the same time one year ago. The gap is starting to shrink as we get into a comparison against low new listings in the second half of 2022. This week’s data shows a 2.5 percentage point improvement over last week as the market slowly trends in a buyer-friendly direction, reflecting a stabilization of the low new listings count.

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

Inventory was down 9.1% year-over-year - this was the seventh consecutive week with a YoY decrease following 58 consecutive weeks with a YoY increase in inventory.  

Inventory is still up from the record lows in the 2nd half of 2021 and early 2022, and it is unlikely we will see new record lows by this measure this year.

by Calculated Risk on 8/11/2023 12:58:00 PM

As usual, there is a wide range of estimates early in the quarter.  GDPNow's estimate is probably way too high.

From BofA:

Next week, we will initiate our 3Q US GDP tracker with the July retail sales data.
emphasis added

From Goldman:

We left our Q3 GDP tracking estimate unchanged at +1.5% (qoq ar) [Aug 8th estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2023 is 4.1 percent on August 8, up from 3.9 percent on August 1. [Aug 8 estimate]

by Calculated Risk on 8/11/2023 10:33:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-August

A brief excerpt:

Interestingly, new home inventory is close to a record percentage of total inventory. This graph uses Not Seasonally Adjusted (NSA) existing home inventory from the National Association of Realtors® (NAR) and new home inventory from the Census Bureau (only completed and under construction inventory).

Note: Mark Fleming, Chief Economist at First American pointed this out in March.

It took a number of years following the housing bust for new home inventory to return to the pre-bubble percent of total inventory. Then, with the pandemic, existing home inventory collapsed and now the percent of new homes is close to 24% of total for sale inventory. The lack of existing home inventory, and few distressed sales, has been a positive for homebuilders.

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