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Tuesday, June 25, 2024

Wednesday: New Home Sales

by Calculated Risk on 6/25/2024 08:48:00 PM

Mortgage Rates 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 10:00 AM, New Home Sales for May from the Census Bureau. The consensus is for 650 thousand SAAR, up from 634 thousand in April.

• During the day, The AIA's Architecture Billings Index for May (a leading indicator for commercial real estate).

June Vehicle Sales Forecast: 15.9 million SAAR, Down 1% YoY

by Calculated Risk on 6/25/2024 05:48:00 PM

From WardsAuto: June U.S. Light-Vehicle Sales Likely Reduced by Cyberattack (pay content).  Brief excerpt:

Unknown is how many unit sales in June might be lost because of the attack. Not all affected dealers stopped selling vehicles and many that did have since resumed, often manually processing sales and finding alternative ways to deliver vehicles to customers. Another unknown is how many buyers might have switched to an unaffected dealer to make a purchase. The bright side is that any lost sales in June likely will be made up in July.
emphasis added
Vehicle Sales ForecastClick on graph for larger image.

This graph shows actual sales from the BEA (Blue), and Wards forecast for May (Red).

On a seasonally adjusted annual rate basis, the Wards forecast of 15.9 million SAAR, would be unchanged from last month, and down 1.0% from a year ago.

A few comments on the Seasonal Pattern for House Prices

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.

House Prices month-to-month change NSA 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.

Case Shiller Seasonal FactorsThe 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.

Comments on April House Prices, FHFA: House Prices Increased 0.2% in April

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).

Case-Shiller MoM House PricesThe 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.

Case-Shiller: National House Price Index Up 6.3% year-over-year in April

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
Case-Shiller House Prices Indices 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.

Case-Shiller House Prices Indices 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.

Monday, June 24, 2024

Tuesday: Case-Shiller House Prices

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

Mortgage Rates 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.

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

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.

Watch Months-of-Supply!

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.

Housing June 24th Weekly Update: Inventory up 2.2% Week-over-week, Up 37.7% Year-over-year

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.

Altos Home Inventory 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.
Altos Year-over-year Home Inventory
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.

Sunday, June 23, 2024

Sunday Night Futures

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.