by Calculated Risk on 9/05/2023 08:28:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Lawler: Single Family Rent Trends at AMH and Invitation Homes

A brief excerpt:

This article from housing economist Tom Lawler reviews some of the data included in my article last week Asking Rents Down 1.2% Year-over-year and adds some additional data from AMH and Invitation Homes.
...
Below is a table showing single-family rent trends at AMH (formerly American Homes 4 Rent) and Invitation Homes, two large institutional investors in SF rental homes.

Note that while rent growth has slowed at both companies over the last year, the slowdown in growth in actual rents paid is much less than that observed in most rent indexes.

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

by Calculated Risk on 9/04/2023 06:20:00 PM

Weekend:
• Schedule for Week of September 3, 2023

Monday:
• At 8:00 AM ET, Corelogic House Price index for July

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

Oil prices were down over the last week with WTI futures at $85.90 per barrel and Brent at $89.00 per barrel. A year ago, WTI was at $87, and Brent was at $94 - so WTI oil prices are down slightly year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.76 per gallon. A year ago, prices were at $3.76 per gallon, so gasoline prices are unchanged year-over-year.

by Calculated Risk on 9/04/2023 01:10:00 PM

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 $503.00 per 1000 board feet, down 14% from $585.50 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 9/04/2023 08:15:00 AM

Altos reports that active single-family inventory was up 1.1% week-over-week.

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of September 1st, inventory was at 509 thousand (7-day average), compared to 503 thousand the prior week.   

Year-to-date, inventory is up 3.7%.  And inventory is up 25.5% from the seasonal bottom 20 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 7.9% compared to the same week in 2022 (last week it was down 9.3%), and down 47.0% compared to the same week in 2019 (last week down 47.1%). 

It appears same week inventory will be below 2022 levels for the remainder of the year. It is possible that inventory might be close to 2020 levels (dark blue line) by the end of the year.

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 9/03/2023 08:21:00 AM

From STR: U.S. hotel results for week ending 26 August

Following seasonal patterns, U.S. hotel performance declined from the previous week but showed positive comparisons year over year, according to CoStar’s latest data through 26 August. ...

20-26 August 2023 (percentage change from comparable week in 2022):

• Occupancy: 65.0% (+0.4%)
• Average daily rate (ADR): US$150.23 (+1.7%)
• Revenue per available room (RevPAR): US$97.62 (+2.1%)
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 tracking last year, and slightly below 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 has peaked for the year.

by Calculated Risk on 9/02/2023 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• Case-Shiller: National House Price Index Unchanged year-over-year in June

• Inflation Adjusted House Prices 3.9% Below Peak

• Asking Rents Down 1.2% Year-over-year

• Fannie Mae Single-Family Mortgage Serious Delinquency Rate Lowest since 2002

• Freddie Mac House Price Index Increased in July to New High; Up 2.9% Year-over-year Black Knight House Price Index Hits New High, but "Mixed signals"

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/

by Calculated Risk on 9/02/2023 10:41:00 AM

This will be a light week for economic data. The key report is the July trade balance.

----- Monday, September 4th -----
All US markets will be closed in observance of the Labor Day holiday.

----- Tuesday, September 5th -----
8:00 AM ET: Corelogic House Price index for July

----- Wednesday, September 6th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: Trade Balance report for July from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through the most recent report. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is for the U.S. trade deficit to be $65.85 billion in July, from $65.5 billion in June.

10:00 AM: the ISM Services Index for August.   The consensus is for a reading of 52.6, down from 52.7.

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

----- Thursday, September 7th -----
8:30 AM: The initial weekly unemployment claims report will be released.

----- Friday, September 8th -----
12:00 PM: Q2 Flow of Funds Accounts of the United States from the Federal Reserve.

by Calculated Risk on 9/01/2023 08:19:00 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 more than doubled from a low of 5,150 in June 2023.

COVID Metrics
	Now	Week Ago	Goal
Hospitalized2🚩	11,165	9,452	≤3,0001
Deaths per Week2🚩	641	616	≤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.

Weekly deaths have increased from a record low of 469 in early July.

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 9/01/2023 06:34:00 PM

Wards Auto released their estimate of light vehicle sales for August: August U.S. Light-Vehicle Sales Rise but Miss Expectations (pay site).

Lean inventory, elevated prices and lukewarm incentives, combined with rising interest rates, could be keeping more buyers out of the market. Some could be waiting for more deals which often was the case in the summer months in most years prior to the pandemic’s start in 2020, as automakers and dealers offloaded excess inventory before widespread availability of next model-year vehicles in the fourth quarter – a strategy not used in recent years, including 2023, due to a lack of excess inventory caused by the pandemic/supply-chain disruptions.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) and Wards Auto's estimate for August (red).

The impact of COVID-19 was significant, and April 2020 was the worst month.  After April 2020, sales increased, and were close to sales in 2019 (the year before the pandemic).  However, sales decreased in 2021 due to supply issues.  The "supply chain bottom" was in September 2021.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Vehicle sales are usually a transmission mechanism for Federal Open Market Committee (FOMC) policy, although far behind housing.  This time vehicle sales were more suppressed by supply chain issues and have picked up recently.

Sales in August were below the consensus forecast.

by Calculated Risk on 9/01/2023 03:44:00 PM

From BofA (last week estimate):

Altogether, this decreased our 2Q GDP tracking estimate by one-tenth to 2.4% q/q saar (seasonally adjusted annual rate) and increased it by a one-tenth for 3Q to 2.8% q/q saar [Aug 24th estimate]
emphasis added

From Goldman:

We boosted our Q3 GDP tracking estimate by one tenth to +2.9% (qoq ar) and our Q3 domestic final sales growth forecast by the same amount to +2.8%. [Sept 1st 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 5.6 percent on September 1, unchanged from August 31 after rounding. [Sept 1st estimate]