by Calculated Risk on 2/28/2024 06:51:00 PM

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

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for 195 thousand initial claims, down from 201 thousand last week.

• Also at 8:30 AM, 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.

• At 9:45 AM, Chicago Purchasing Managers Index for February.

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

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

by Calculated Risk on 2/28/2024 12:33:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Freddie Reports Surge in Multifamily Serious Delinquencies

Brief excerpt:

Freddie Mac reports that the multi-family serious delinquency rate increased sharply in January to 0.44% from 0.28% in December, and up from 0.12% in January 2023.

This graph shows the Freddie multi-family serious delinquency rate since 2012.

There ismore in the article.

by Calculated Risk on 2/28/2024 08:30:00 AM

From the BEA: Gross Domestic Product, Fourth Quarter and Year 2023 (Second Estimate)

Real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the fourth quarter of 2023, according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.9 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 3.3 percent. The update primarily reflected a downward revision to private inventory investment that was partly offset by upward revisions to state and local government spending and consumer spending (refer to "Updates to GDP").

The increase in real GDP reflected increases in consumer spending, exports, state and local government spending, nonresidential fixed investment, federal government spending, and residential fixed investment that were partly offset by a decrease in private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
emphasis added

Here is a Comparison of Second and Advance Estimates. PCE growth was revised up from 2.8% to 3.0%. Residential investment was revised up from 1.1% to 2.9%.

by Calculated Risk on 2/28/2024 07:00:00 AM

"Higher rates in recent weeks have stalled activity", Mike Fratantoni, MBA’s SVP and Chief Economist.

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 5.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 23, 2024.

The Market Composite Index, a measure of mortgage loan application volume, decreased 5.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week and was 1 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 12 percent lower than the same week one year ago.

“Mortgage rates were little changed last week, with the 30-year conforming rate declining slightly to 7.04 percent but remaining about a quarter percentage point higher than the start of the year,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Higher rates in recent weeks have stalled activity, and last week it dropped more for those seeking FHA and VA refinances. Purchase activity is running 12 percent behind last year’s pace, but our January Builder Application Survey results showed that applications to buy new homes were up 19 percent compared to last year. This disparity continues to highlight how the lack of existing inventory is the primary constraint to increases in purchase volume. However, mortgage rates above 7 percent sure don’t help.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.04 percent from 7.06 percent, with points increasing to 0.67 from 0.66 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is down 12% year-over-year unadjusted.  

Red is a four-week average (blue is weekly).  

Purchase application activity is up slightly from the lows in late October 2023, and below the lowest levels during the housing bust.  Other than two weeks last October, this is the lowest level since 1995.

The second graph shows the refinance index since 1990.

With higher mortgage rates, the refinance index declined sharply in 2022, and has mostly flatlined since then.

by Calculated Risk on 2/27/2024 07:26:00 PM

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

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

• At 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%.

by Calculated Risk on 2/27/2024 01:13:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Lawler: Update on American Homes for Rent (AMH)

A brief excerpt:

From housing economist Tom Lawler:

Below is a table derived from the Q4/2023 (and earlier) “Earnings Release and Supplemental Information Package” from American Homes for Rent (AMH), a large institutional investor in single-family rental homes. Also below is the table shown in last week’s report for Invitation Homes (INVH).

Recall that INVH said that last quarter it was focused on improving its occupancy rate and told teams to “negotiate” to do so. AMH, in contrast, saw its occupancy rate decline last quarter.

There is much more in the article.

by Calculated Risk on 2/27/2024 09:48:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Case-Shiller: National House Price Index Up 5.5% year-over-year in December; FHFA: House Prices Up 6.5% Q4 over Q4

Excerpt:

S&P/Case-Shiller released the monthly Home Price Indices for December ("December" is a 3-month average of October, November and December closing prices). December closing prices include some contracts signed in August, so there is a significant lag to this data. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).

The MoM increase in the seasonally adjusted (SA) Case-Shiller National Index was at 0.19%. This was the eleventh consecutive MoM increase, but the smallest increase since prices declined (SA) in January 2023.

On a seasonally adjusted basis, prices increased in 13 of the 20 Case-Shiller cities on a month-to-month basis. Seasonally adjusted, San Francisco has fallen 8.7% from the recent peak, Seattle is down 7.0% from the peak, Portland down 4.7%, and Phoenix is down 3.2%.

There is much more in the article.

by Calculated Risk on 2/27/2024 09:00:00 AM

S&P/Case-Shiller released the monthly Home Price Indices for December ("December" is a 3-month average of October, November and December closing prices).

This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.

From S&P S&P CoreLogic Case-Shiller Index Reports 5.5% Annual Home Price Gain for Calendar 2023

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.5% annual gain in December, up from a 5.0% rise in the previous month. The 10-City Composite showed an increase of 7.0%, up from a 6.3% increase in the previous month. The 20-City Composite posted a year-over-year increase of 6.1%, up from a 5.4% increase in the previous month. San Diego reported the highest year-over-year gain among the 20 cities with an 8.8% increase in December, followed by Los Angeles and Detroit, each with an 8.3% increase. Portland showed a 0.3% increase this month, holding the lowest rank after reporting the smallest year-over-year growth.
...
The U.S. National Index showed a continued decrease of 0.4%, while the 20-City Composite and 10- City Composite posted 0.3% and 0.2% month-over-month decreases respectively in December.

After seasonal adjustment, the U.S. National Index, the 20-City Composite, and the 10-City Composite all posted month-over-month increases of 0.2%.

“U.S. home prices faced significant headwinds in the fourth quarter of 2023,” says Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. “However, on a seasonally adjusted basis, the S&P Case-Shiller Home Price Indices continued its streak of seven consecutive record highs in 2023. Ten of 20 markets beat prior records, with San Diego registering an 8.9% gain and Las Vegas the fastest rising market in December, after accounting for seasonal impacts.”

“2023 U.S. housing gains haven’t followed such a synchronous pattern since the COVID housing boom. The term ‘a rising tide lifts all boats’ seems appropriate given broad-based performance in the U.S. housing sector. All 20 markets reported yearly gains for the first time this year, with four markets rising over 8%. Portland eked out a positive annual gain after 11 months of declines. Regionally, the Midwest and Northeast both experienced the greatest annual appreciation with 6.7%.”

Click on graph for larger image.

The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

The Composite 10 index is up 0.2% in December (SA) and is at a new all-time high.

The Composite 20 index is up 0.2% (SA) in December and is also at a new all-time high.

The National index is up 0.2% (SA) in December and is also at a new all-time high.

The second graph shows the year-over-year change in all three indices.

The Composite 10 SA is up 7.0% year-over-year.  The Composite 20 SA is up 6.1% year-over-year.

The National index SA is up 5.5% year-over-year.

Annual price changes were at expectations.  I'll have more later.

by Calculated Risk on 2/26/2024 07:16:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Starting The Week Closer to Recent Highs

Mortgage rates moved moderately higher to begin the new week, but they remained just under the highest recent levels seen last Thursday. Many lenders were closer to 'unchanged' at the outset but were then forced to issue mid-day increases in response to weakness in the bond market.
...
Some of this week's data could have an impact, but next week's data represents a much bigger risk (or opportunity). [30 year fixed 7.13%]
emphasis added

Tuesday:
• At 8:30 AM ET, Durable Goods Orders for January from the Census Bureau. The consensus is for a 4.5% decrease in durable goods orders.

• At 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.

• Also at 9:00 AM, S&P/Case-Shiller House Price Index for December. The consensus is for a 5.5% year-over-year increase in the National index for December, up from 5.1% in November.

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

by Calculated Risk on 2/26/2024 03:02:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Final Look at Local Housing Markets in January

A brief excerpt:

After the National Association of Realtors® (NAR) releases the monthly existing home sales report, I pick up additional local market data that is reported after the NAR. This is the final look at local markets in January.

I’ve added a comparison of active listings, new listings, and closings to the same month in 2019 (for markets with available data). This gives us a sense of the current low level of sales and inventory, and also shows some significant regional differences.

The big stories for January were that existing home sales were very low, at 4.00 million on a seasonally adjusted annual rate basis (SAAR), and new listings were up YoY for the 4th consecutive month!
...
And a table of January sales.

In January, sales in these markets were up 3.0%. In December, these same markets were down 7.9% year-over-year Not Seasonally Adjusted (NSA).

Sales in most of these markets are down sharply compared to January 2019.
...
It is unlikely sales will be up year-over-year in February since sales were reported at 4.53 million SAAR in February 2023. The comparison will be easier later in the year.

More local data coming in March for activity in February!

There is much more in the article.