by Calculated Risk on 6/25/2024 01:35:00 PM

Two key points:
1) There is a clear seasonal pattern for house prices.
2) The surge in distressed sales during the housing bust distorted the seasonal pattern.  This was because distressed sales (at lower price points) happened at a steady rate all year, while regular sales followed the normal seasonal pattern.  This made for larger swings in the seasonal factor during the housing bust.

Click on graph for larger image.

This graph shows the month-to-month change in the NSA Case-Shiller National index since 1987 (through March 2024). The seasonal pattern was smaller back in the '90s and early '00s and increased once the bubble burst.

The seasonal swings declined following the bust, however the pandemic price surge changed the month-over-month pattern.

The second graph shows the seasonal factors for the Case-Shiller National index since 1987. The factors started to change near the peak of the bubble, and really increased during the bust since normal sales followed the regular seasonal pattern - and distressed sales happened all year.   

The swings in the seasonal factors were decreasing following the bust but have increased again recently - this time without a surge in distressed sales.

by Calculated Risk on 6/25/2024 09:47:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Case-Shiller: National House Price Index Up 6.3% year-over-year in April; FHFA: House Prices Increased 0.2% in April, up 6.3% YoY

Excerpt:

S&P/Case-Shiller released the monthly Home Price Indices for April ("April" is a 3-month average of February, March and April closing prices). April closing prices include some contracts signed in December, 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 0.26%. This was the fifteenth consecutive MoM increase, but this tied December as the smallest MoM increase in the last 14 month.

On a seasonally adjusted basis, prices increased month-to-month in 16 of the 20 Case-Shiller cities. Seasonally adjusted, San Francisco has fallen 7.8% from the recent peak, Seattle is down 6.0% from the peak, Portland down 3.7%, and Phoenix is down 3.7%.

There is much more in the article.

by Calculated Risk on 6/25/2024 09:00:00 AM

S&P/Case-Shiller released the monthly Home Price Indices for April ("April" is a 3-month average of February, March and April 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 Break Prvious Month's All-Time High in April 2024

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.3% annual gain for April, down from a 6.5% annual gain in the previous month. The 10-City Composite saw an annual increase of 8.0%, down from an 8.3% annual increase in the previous month. The 20-City Composite posted a year-over-year increase of 7.2%, dropping from a 7.5% increase in the previous month. San Diego continued to report the highest annual gain among the 20 cities in April with a 10.3% increase this month, followed by New York and Chicago, with increases of 9.4% and 8.7%, respectively. Portland once again held the lowest rank this month for the smallest year-over-year growth, with a 1.7% annual increase in April.
...
The U.S. National Index, the 20-City Composite, and the 10-City Composite upward trends decelerated from last month, with pre-seasonality adjustment increases of 1.2%, 1.36% and 1.38%, respectively.

After seasonal adjustment, the U.S. National Index and 10-City Composite posted the same month-over-month increase of 0.3% and 0.5% respectively as last month, while the 20-City reported a monthly increase of 0.4%.

“For the second consecutive month, we’ve seen our National Index jump at least 1% over its previous all-time high,” says Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. “2024 is closely tracking the strong start observed last year, where March and April posted the largest rise seen prior to a slowdown in the summer and fall. Heading into summer, the market is at an all-time high, once again testing its resilience against the historically more active time of the year.

“Thirteen markets are currently at all-time highs and San Diego reigns supreme once again, topping annual returns for the last six months. The Northeast is the best performing market for the previous nine months, with New York rising 9.4% annually. Sustained outperformance of the Northeast market was last observed in 2011. For the decade that followed, the West and the South held the top posts for performance. It’s now been over a year since we’ve seen the top region come from the South or the West.
emphasis added

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 was up 0.5% in April (SA).  The Composite 20 index was up 0.4% (SA) in April.

The National index was up 0.3% (SA) in April.

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

The Composite 10 SA was up 8.0% year-over-year.  The Composite 20 SA was up 7.2% year-over-year.

The National index SA was up 6.3% year-over-year.

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

by Calculated Risk on 6/24/2024 07:08:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Remain Exceptionally Flat for 4th Straight Day

... ever since last Monday, the average top tier conventional 30yr fixed rate hasn't moved mover than 0.02% on any single day and for the past 3 days, not more than 0.01%. That's a staggering level of "sideways-ness." [30 year fixed 7.02%]
emphasis added

Tuesday:
• At 8:30 AM ET, Chicago Fed National Activity Index for May. This is a composite index of other data.

• At 9:00 AM, S&P/Case-Shiller House Price Index for April. The National index was up 6.5% year-over-year in March.

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

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

• Also at 10:00 AM, State Employment and Unemployment (Monthly) for May 2024.

by Calculated Risk on 6/24/2024 04:07:00 PM

From the MBA: Share of Mortgage Loans in Forbearance Decreases Slightly to 0.21% in May

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance declined slightly to 0.21% as of May 31, 2024. According to MBA’s estimate, 105,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 8.2 million borrowers since March 2020.

In May 2024, the share of Fannie Mae and Freddie Mac loans in forbearance declined 1 basis point to 0.10%. Ginnie Mae loans in forbearance remained the same relative to the previous month at 0.39%, and the forbearance share for portfolio loans and private-label securities (PLS) also stayed flat at 0.31%.

“The performance of servicing portfolios in May was solid, with about 96 percent of borrowers making their mortgage payments on time,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “There was a slight decline in the performance of post-forbearance loan workouts, but the results were relatively strong with 75 percent of homeowners making their payments in accordance with the workout terms.”
emphasis added

At the end of May, there were about 105,000 homeowners in forbearance plans.

by Calculated Risk on 6/24/2024 10:50:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Watch Months-of-Supply!

A brief excerpt:

Although inventory is well below normal levels, so are sales. I think we need to keep an eye on months-of-supply. Historically nominal prices declined when months-of-supply approached 6 months - and that is unlikely this year - but we could see months-of-supply back to 2019 levels later this year.

What would it take to get months-of-supply back to 2019 levels by mid-year? The following table is a simple exercise. If sales stay depressed at 2023 levels, how much would inventory have to increase to put months-of-supply at 2019 levels?

There is much more in the article.

by Calculated Risk on 6/24/2024 08:12:00 AM

Altos reports that active single-family inventory was up 2.2% week-over-week. Inventory is now up 28.4% from the February seasonal bottom, and at the highest level since July 2020.

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of June 21st, inventory was at 634 thousand (7-day average), compared to 621 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 80% from the record low for the same week in 2021, but still well below normal levels.

Inventory was up 37.7% compared to the same week in 2023 (last week it was up 37.3%), and down 33.6% compared to the same week in 2019 (last week it was down 34.2%). 

Inventory should be above 2020 levels for the same week in a few weeks.

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 6/23/2024 06:36:00 PM

Weekend:
• Schedule for Week of June 23, 2024

Monday:
• At 10:30 AM ET, Dallas Fed Survey of Manufacturing Activity for June.

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

Oil prices were up over the last week with WTI futures at $80.73 per barrel and Brent at $85.24 per barrel. A year ago, WTI was at $69, and Brent was at $74 - so WTI oil prices are up about 17% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.42 per gallon. A year ago, prices were at $3.56 per gallon, so gasoline prices are down $0.14 year-over-year.

by Calculated Risk on 6/23/2024 01:04:00 PM

From STR: U.S. hotel results for week ending 15 June

The U.S. hotel industry reported higher performance results from the previous week but mixed comparisons year over year, according to CoStar’s latest data through 15 June. ...

9-15 June 2024 (percentage change from comparable week in 2023):

• Occupancy: 70.3% (-0.6%)
• Average daily rate (ADR): US$161.70 (+0.9%)
• Revenue per available room (RevPAR): US$113.62 (+0.3%)
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, 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 last year and is slightly 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 now increase seasonally with the summer travel season.

by Calculated Risk on 6/22/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Single Family Starts Down Slightly Year-over-year in May; Multi-Family Starts Down 50%

• NAR: Existing-Home Sales Decreased to 4.11 million SAAR in May

• Lawler: Early Read on Existing Home Sales in May

• 4th Look at Local Housing Markets in May; California Home Sales Down 6% YoY in May

• Comparing the Current Housing Market to the 1978 to 1982 period

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