by Calculated Risk on 2/24/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• NAR: Existing-Home Sales Increased to 4.00 million SAAR in January

• Lawler: Update on Invitation Homes Rental Trends

• Single Family Built-for-Rent Almost Doubled Since 2020

• 3rd Look at Local Housing Markets in January; California Home Sales Up 5.9% YoY in January

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

by Calculated Risk on 2/24/2024 08:11:00 AM

The key reports this week are January New Home sales, the second estimate of Q4 GDP, Personal Income and Outlays for January, Case-Shiller house prices and February vehicle sales.

For manufacturing, the February ISM Index, and the February Dallas, Kansas City, and Richmond Fed manufacturing surveys will be released.

----- Monday, February 26th -----
10:00 AM: New Home Sales for January from the Census Bureau.

This graph shows New Home Sales since 1963.

The dashed line is the sales rate for last month.

The consensus is that new home sales increased to 675 thousand SAAR, up from 646 thousand in December.

10:30 AM: Dallas Fed Survey of Manufacturing Activity for February.

----- Tuesday, February 27th -----
8:30 AM: Durable Goods Orders for January from the Census Bureau. The consensus is for a 4.5% decrease in durable goods orders.

9:00 AM: FHFA House Price Index for December 2023. This was originally a GSE only repeat sales, however there is also an expanded index.

9:00 AM: S&P/Case-Shiller House Price Index for December.

This graph shows the year-over-year change for the Case-Shiller National, Composite 10 and Composite 20 indexes, through the most recent report (the Composite 20 was started in January 2000).

The consensus is for a 5.5% year-over-year increase in the National index for December, up from 5.1% in November.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for February.

----- Wednesday, February 28th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: Gross Domestic Product, 4th Quarter and Year 2023 (Second Estimate) The consensus is that real GDP increased 3.3% annualized in Q4, unchanged from the advance estimate of 3.3%.

----- Thursday, February 29th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 195 thousand initial claims, down from 201 thousand last week.

8:30 AM ET: Personal Income and Outlays for January. The consensus is for a 0.5% increase in personal income, and for a 0.2% increase in personal spending. And for the Core PCE price index to increase 0.4%.  PCE prices are expected to be up 2.4% YoY, and core PCE prices up 2.8% YoY.

9:45 AM: Chicago Purchasing Managers Index for February. 

10:00 AM: Pending Home Sales Index for January. The consensus is for a 1.0% increase in the index.

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

----- Friday, March 1st -----
10:00 AM: ISM Manufacturing Index for February. The consensus is for the ISM to be at 49.2, up from 49.1 in January. 

10:00 AM: Construction Spending for January. The consensus is for a 0.2% increase in construction spending.

10:00 AM: University of Michigan's Consumer sentiment index (Final for February). 

All day: Light vehicle sales for February. Sales were at 15.0 million in January (Seasonally Adjusted Annual Rate). The consensus is for sales of 15.5 million SAAR.

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the January sales rate.

by Calculated Risk on 2/23/2024 07:51:00 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.

For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly.

Hospitalizations are more than three times the low of 5,386 in June 2023, however, they have declined significantly from 30,018 earlier this year.

COVID Metrics
	Now	Week Ago	Goal
Hospitalized2	16,536	18,024	≤3,0001
Deaths per Week2	1,883	2,210	≤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 are more than three times the low of 489 in July 2023, but have declined from the recent peak of 2,484.

And here is a graph I'm following on COVID in wastewater as of Feb 22nd:

This appears to be a leading indicator for COVID hospitalizations and deaths.

Nationally, COVID in wastewater is now off more than 50% from the holiday peak at the end of December, and that suggests weekly deaths will continue to decline. The South region still has high levels of COVID in wastewater.

by Calculated Risk on 2/23/2024 04:03:00 PM

From STR: U.S. hotel results for week ending 17 February

.S. hotel performance increased from the previous week, while year-over-year comparisons remained mixed, according to CoStar’s latest data through 17 February. ...

11-17 February 2024 (percentage change from comparable week in 2023):

• Occupancy: 59.2% (-2.5%)
• Average daily rate (ADR): US$162.24 (+4.2%)
• Revenue per available room (RevPAR): US$96.10 (+1.6%)
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 2024, black is 2020, blue is the median, and dashed light blue is for 2023.  Dashed purple is for 2018, the record year for hotel occupancy. 

The 4-week average of the occupancy rate is tracking just below last year, and below the median rate for the period 2000 through 2023 (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 seasonally over the next several weeks.

by Calculated Risk on 2/23/2024 11:43:00 AM

From BofA:

On net, this week’s data boosted our 1Q US GDP tracking estimate by a tenth to 1.0% q/q saar. Our 4Q tracking estimate also increased by a tenth to 3.2% q/q saar [Feb 23rd estimate]
emphasis added

From Goldman:

We boosted our Q1 GDP tracking estimate by 0.1pp to +2.4% (qoq ar) and our Q1 domestic final sales growth forecast by 0.1pp to +2.7% (qoq ar). [Feb 22nd estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2024 is 2.9 percent on February 16, unchanged from February 15. [Feb 16th estimate] (next release will be on Feb 27th)

by Calculated Risk on 2/23/2024 08:11:00 AM

From ICE (formerly Black Knight): ICE First Look at Mortgage Performance: Foreclosures Up but Delinquencies Improve as the Mortgage Market Kicks Off 2024

• In an expected rebound from December’s calendar-driven rise, the national delinquency rate dropped to 3.38% in January, the lowest since October, and flat from the same time last year

• Past-due mortgages were down across the board, as inflows and rolls to later stages of delinquency fell, while early- and late-stage delinquency cures improved

• Serious delinquencies (loans 90+ days past due but not in active foreclosure) were down 109K (-19%) year over year, with the population now at 470K

• Representing 7.2% of serious delinquencies, January’s 34K foreclosure starts – the most since April 2022 – marked a +43.3% month over month jump, driven in part by seasonal pressures

• The number of loans in active foreclosure rose 7K to 219K, but remained 23% below (-64K) pre-pandemic levels

• 6.6K foreclosure sales were completed nationally in January, a 23% increase from the previous month but in line with the monthly average for the preceding year

• While January’s jump in foreclosures is worth watching, serious delinquencies remain low, with 70% of such loans still protected from foreclosure, reducing near-term risk

• Prepayment activity rose marginally as easing interest rates in December and January provided a modest increase in refinance incentive and homebuyer demand
emphasis added

Note: that last column below is for the same month in 2019 to show the change from pre-pandemic levels.

ICE: Percent Loans Delinquent and in Foreclosure Process
	Jan 2024	Dec 2023	Jan 2023	Jan 2019
Delinquent	3.38%	3.57%	3.38%	3.75%
In Foreclosure	0.41%	0.40%	0.45%	0.51%
Number of properties:
Number of properties that are delinquent, but not in foreclosure:	1,803,000	1,908,000	1,775,000	1,945,000
Number of properties in foreclosure pre-sale inventory:	219,000	212,000	238,000	265,000
Total Properties	2,022,000	2,120,000	2,012,000	2,210,000

by Calculated Risk on 2/22/2024 02:28:00 PM

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For January, Realtor.com reported inventory was up 7.9% YoY, and down 40% compared to January 2019. Now - on a weekly basis - inventory is up 15.7% YoY, and that would put inventory still down about 39% compared to February 2019.

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View — Data Week Ending February 17, 2024

• Active inventory increased, with for-sale homes 15.7% above year ago levels.

For a 15th consecutive week, active listings registered above prior year level, which means that today’s home shoppers have more homes to choose from that aren’t already in the process of being sold. So far this season, the increase in newly listed homes has resulted in a boost to overall inventory, but while the added inventory has certainly improved conditions from this time in 2021 through 2023, overall inventory is still low compared to the same time in February 2020 and years prior to the COVID-19 Pandemic.

• New listings–a measure of sellers putting homes up for sale–were up this week, by 10.9% from one year ago.

Newly listed homes were above last year’s levels for the 17th week in a row, which could further contribute to a recovery in active listings meaning more options for home shoppers. This past week, newly listed homes were up 10.9% from a year ago, accelerating slightly from the 9.5% growth rate seen in the previous week.

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

Inventory was up year-over-year for the 154th consecutive week following 20 consecutive weeks with a YoY decrease in inventory.  

Inventory is still historically very low.

Although new listings remain well below "typical pre-pandemic levels", new listings are now up YoY for the 17th consecutive week.

by Calculated Risk on 2/22/2024 10:48:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: NAR: Existing-Home Sales Increased to 4.00 million SAAR in January

Excerpt:

Sales Year-over-Year and Not Seasonally Adjusted (NSA)

The fourth graph shows existing home sales by month for 2023 and 2024.

Sales declined 1.7% year-over-year compared to January. This was the twenty-ninth consecutive month with sales down year-over-year. This was just above the cycle low of 3.85 million SAAR in October 2023.

There is much more in the article.

by Calculated Risk on 2/22/2024 10:00:00 AM

From the NAR: Existing-Home Sales Rose 3.1% in January

Existing-home sales grew in January, according to the National Association of REALTORS®. Among the four major U.S. regions, sales accelerated in the Midwest, South and West, and remained steady in the Northeast. Year-over-year, sales improved in the West, and decreased in the Northeast, Midwest and South.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – elevated 3.1% from December to a seasonally adjusted annual rate of 4.00 million in January. Year-over-year, sales slipped 1.7% (down from 4.07 million in January 2023).
...
Total housing inventory registered at the end of January was 1.01 million units, up 2.0% from December and 3.1% from one year ago (980,000). Unsold inventory sits at a 3.0-month supply at the current sales pace, down from 3.1 months in December but up from 2.9 months in January 2023.
emphasis added

Click on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1994.

Sales in January (4.00 million SAAR) were up 3.1% from the previous month and were 1.7% below the January 2023 sales rate.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 1.01 million in January from 0.99 million the previous month.

Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory was up 3.1% year-over-year (blue) in January compared to January 2023.

Months of supply (red) decreased to 3.0 months in January from 3.1 months the previous month.

This was above the consensus forecast. I'll have more later. 

by Calculated Risk on 2/22/2024 08:30:00 AM

The DOL reported:

In the week ending February 17, the advance figure for seasonally adjusted initial claims was 201,000, a decrease of 12,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 212,000 to 213,000. The 4-week moving average was 215,250, a decrease of 3,500 from the previous week's revised average. The previous week's average was revised up by 250 from 218,500 to 218,750.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 215,250.

The previous week was revised up.

Weekly claims were below the consensus forecast.