by Calculated Risk on 5/06/2024 02:49:00 PM

From the Federal Reserve: The April 2024 Senior Loan Officer Opinion Survey on Bank Lending Practices

The April 2024 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the first quarter of 2024.

Regarding loans to businesses, survey respondents reported, on balance, tighter standards and weaker demand for commercial and industrial (C&I) loans to firms of all sizes over the first quarter. Meanwhile, banks reported tighter standards and weaker demand for all commercial real estate (CRE) loan categories.

Banks also responded to a set of special questions about changes in lending policies and demand for CRE loans over the past year. For all CRE loan categories, banks reported having tightened all queried lending policies, including the spread of loan rates over the cost of funds, maximum loan sizes, loan-to-value ratios, debt service coverage ratios, and interest-only payment periods.

For loans to households, banks reported that lending standards tightened across some categories of residential real estate (RRE) loans while remaining unchanged for others on balance. Meanwhile, demand weakened for all RRE loan categories. In addition, banks reported tighter standards and weaker demand for home equity lines of credit (HELOCs). Moreover, for credit card, auto, and other consumer loans, standards reportedly tightened and demand weakened.

While banks, on balance, reported having tightened lending standards further for most loan categories in the first quarter, lower net shares of banks reported tightening lending standards than in the fourth quarter of last year across most loan categories.
emphasis added

Click on graph for larger image.

This graph on Residential Real Estate demand is from the Senior Loan Officer Survey Charts.

This graph is for demand and shows that demand has declined.

The left graphs are from 1990 to 2014.  The right graphs are from 2015 to Q1 2024.

by Calculated Risk on 5/06/2024 02:01:00 PM

Fannie reported results for Q1 2024. Here is some information on single-family Real Estate Owned (REOs). 

Fannie Mae reported the number of REOs decreased to 7,791 at the end of Q1 2024, down 5% from 8,403 at the end of the previous quarter, and down 9% year-over-year from Q1 2023. 

For Fannie, this is down 95% from the 166,787 peak number of REOs in Q3 2010.

Click on graph for larger image.

Here is a graph of Fannie Real Estate Owned (REO).

This is well below the normal level of REOs for Fannie, and there will not be a huge wave of foreclosures.

by Calculated Risk on 5/06/2024 11:01:00 AM

Today, in the Real Estate Newsletter: ICE Mortgage Monitor: Annual home price growth eased in March

Brief excerpt:

Press Release: ICE Mortgage Monitor: Historically Strong Home Price Growth Pushes U.S. Mortgage Holders’ Tappable Equity to Record $11T

Here is the year-over-year in house prices according to the ICE Home Price Index (HPI). The ICE HPI is a repeat sales index. Black Knight reports the median price change of the repeat sales. The index was up 5.6% year-over-year in March, down from 6.0% YoY in February.

• Home price growth slowed in March, driven by a tightening of both mortgage rates and home affordability, but continues to remain historically strong

• Annual home price growth eased from an upwardly revised 6.0% in February to +5.6% in March, with prices rising by a seasonally adjusted +0.42% in the month, down from a revised +0.58% in February

• On a non-adjusted basis, prices were up +1.2% in March, more than 25% above the 25-year March average of +0.96%

• March marked the third straight month of above average monthly growth, after monthly gains fell below the 25-year average in five of the final six months of 2023, dampened by elevated interest rates

• While rising interest rates suppressed purchase demand and allowed modest inventory growth this spring, prices have remained resilient so far

• That said, adjusted monthly growth continuing at or near its currently rate would result in modestly slowing annual home price growth as we move into summer

There is much more in the article.

by Calculated Risk on 5/06/2024 08:11:00 AM

Altos reports that active single-family inventory was up 0.6% week-over-week. Inventory is now up 13.3% from the February bottom.

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of May 3rd, inventory was at 560 thousand (7-day average), compared to 556 thousand the prior week.   

Inventory is still far below pre-pandemic levels. 

The second graph shows the seasonal pattern for active single-family inventory since 2015.

The red line is for 2024.  The black line is for 2019.  Note that inventory is up 86% from the record low for the same week in 2022, but still well below normal levels.

Inventory was up 33.1% compared to the same week in 2023 (last week it was up 31.8%), and down 36.8% compared to the same week in 2019 (last week it was down 35.9%). 

Back in June 2023, inventory was down almost 54% compared to 2019, so the gap to more normal inventory levels is slowly closing.

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 5/05/2024 06:50:00 PM

Weekend:
• Schedule for Week of May 5, 2024

Monday:
• At 2:00 PM ET, Senior Loan Officer Opinion Survey on Bank Lending Practices for April.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 10 and DOW futures are up 80 (fair value).

Oil prices were up over the last week with WTI futures at $78.11 per barrel and Brent at $82.96 per barrel. A year ago, WTI was at $71, and Brent was at $76 - so WTI oil prices are up about 10% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.62 per gallon. A year ago, prices were at $3.52 per gallon, so gasoline prices are up $0.10 year-over-year.

by Calculated Risk on 5/05/2024 08:21:00 AM

From STR: U.S. hotel results for week ending 27 April

As expected with Passover, U.S. hotel performance came in lower than the previous week and comparable period last year, according to CoStar’s latest data through 27 April. ...

21-27 April 2024 (percentage change from comparable week in 2023):

• Occupancy: 65.7% (-1.2%)
• Average daily rate (ADR): US$154.44 (-1.3%)
• Revenue per available room (RevPAR): US$101.42 (-2.5%)
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 slightly above last year, and above 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 move mostly sideways seasonally until the summer travel season.

by Calculated Risk on 5/04/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• Case-Shiller: National House Price Index Up 6.4% year-over-year in February

• Inflation Adjusted House Prices 2.4% Below Peak

• Lawler: Update on Mortgage Rates and Spreads and also New / Renewal Rents

• Freddie Mac House Price Index Increased in March; Up 6.6% Year-over-year

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

by Calculated Risk on 5/04/2024 08:11:00 AM

This will be a very light week for economic data.

----- Monday, May 6th -----
2:00 PM: Senior Loan Officer Opinion Survey on Bank Lending Practices for April.

----- Tuesday, May 7th -----
No major economic releases scheduled.

----- Wednesday, May 8th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

----- Thursday, May 9th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 206 thousand initial claims, down from 208 thousand last week.

----- Friday, May 10th -----
10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for May).

by Calculated Risk on 5/03/2024 07:11:00 PM

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

It is likely that we will see pandemic lows for weekly deaths in the next couple of weeks.  That is welcome news!

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

Note: "Effective May 1, 2024, hospitals are no longer required to report COVID-19 hospital admissions, hospital capacity, or hospital occupancy data."  So I'm no longer tracking hospitalizations, however hospitalizations were at a pandemic low last week.

COVID Metrics
	Now	Week Ago	Goal
Deaths per Week	573	678	≤3501
1my goals to stop weekly posts, 🚩 Increasing number weekly for Deaths ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported.

Weekly deaths have declined sharply from the recent peak of 2,561 but are still 17% above the pandemic low of 491 last July.

And here is a graph I'm following concerning COVID in wastewater as of May 2nd:

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

Nationally, COVID in wastewater is now off more than 90% from the holiday peak at the end of December, and that suggests weekly deaths will continue to decline.

by Calculated Risk on 5/03/2024 03:21:00 PM

From Goldman:

We lowered our Q2 GDP tracking estimate by 0.1pp to +3.3% (qoq ar) and our domestic final sales estimate by the same amount to +2.7% (qoq ar). [May 2nd estimate]
emphasis added

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 3.3 percent on May 2, unchanged from May 1 after rounding. [May 2nd estimate]