by Calculated Risk on 7/15/2024 08:14:00 AM

Inventory growth paused this week, likely due to the July 4th holiday weekend.  

Altos reports that active single-family inventory was down 0.2% week-over-week. Inventory is now up 31.9% from the February seasonal bottom.

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of July 12th, inventory was at 651 thousand (7-day average), compared to 653 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 75% from the record low for the same week in 2021, but still well below normal levels.

Inventory was up 38.1% compared to the same week in 2023 (last week it was up 40.0%), and down 31.5% compared to the same week in 2019 (last week it was down 31.2%). 

Inventory should be above 2020 levels for the same week next week.

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 7/14/2024 07:19:00 PM

Weekend:
• Schedule for Week of July 14, 2024

Monday:
• At 8:30 AM ET, The New York Fed Empire State manufacturing survey for July. The consensus is for a reading of -6.0, unchanged from -6.0.

• At 12:30 PM, Discussion, Fed Chair Jerome Powell, Conversation with David M. Rubenstein, Chairman of the Economic Club of Washington, D.C.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 1 and DOW futures are up 43 (fair value).

Oil prices were higher over the last week with WTI futures at $82.21 per barrel and Brent at $85.03 per barrel. A year ago, WTI was at $75, and Brent was at $80 - 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 $3.50 per gallon. A year ago, prices were at $3.54 per gallon, so gasoline prices are down $0.04 year-over-year.

by Calculated Risk on 7/14/2024 08:15:00 AM

From STR: U.S. hotel results for week ending 6 July

Due to the Fourth of July, the U.S. hotel industry reported lower performance results from the previous week and mixed comparisons year over year, according to CoStar’s latest data through 6 July. ...

30 June through 6 July 2024 (percentage change from comparable week in 2023):

• Occupancy: 61.3% (-0.9%)
• Average daily rate (ADR): US$157.27 (+0.5%)
• Revenue per available room (RevPAR): US$96.35 (-0.4%)
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 just behind last year and is 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 due to summer recreational travel.

by Calculated Risk on 7/13/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• 2nd Look at Local Housing Markets in June

• Part 1: Current State of the Housing Market; Overview for mid-July 2024

• A Discussion of the Housing Market with Lance Lambert (ResiClub)

• Fannie and Freddie: Single Family Serious Delinquency Rate Decreased in May, Multi-family Increased Slightly

• 1st Look at Local Housing Markets in June

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

by Calculated Risk on 7/13/2024 08:44:00 AM

The key reports this week are June Retail Sales and Housing Starts.

For manufacturing, the June Industrial Production report and the July New York and Philly Fed manufacturing surveys will be released.

----- Monday, July 15th -----
8:30 AM: The New York Fed Empire State manufacturing survey for July. The consensus is for a reading of -6.0, unchanged from -6.0.

12:30 PM: Discussion, Fed Chair Jerome Powell, Conversation with David M. Rubenstein, Chairman of the Economic Club of Washington, D.C.

----- Tuesday, July 16th -----
8:30 AM: Retail sales for June is scheduled to be released.  The consensus is for no change in retail sales.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

10:00 AM: The July NAHB homebuilder survey. The consensus is for a reading of 44, up from 43. Any number below 50 indicates that more builders view sales conditions as poor than good.

----- Wednesday, July 17th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM ET: Housing Starts for June.

This graph shows single and multi-family housing starts since 1968.

The consensus is for 1.310 million SAAR, up from 1.277 million SAAR in May.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for June.

This graph shows industrial production since 1967.

The consensus is for a 0.3% increase in Industrial Production, and for Capacity Utilization to increase to 78.6%.

2:00 PM: the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

----- Thursday, July 18th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 228 thousand initial claims, up from 222 thousand last week.

8:30 AM: the Philly Fed manufacturing survey for July. The consensus is for a reading of 2.9, up from 1.0.

----- Friday, July 19th -----
10:00 AM: State Employment and Unemployment (Monthly) for June 2024

by Calculated Risk on 7/12/2024 09:12:00 PM

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

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.

COVID Metrics
	Now	Week Ago	Goal
Deaths per Week✅🚩	327	290	≤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.

Although weekly deaths have met the original goal to stop posting, I'm going to continue to see if deaths increase again.   This week was up from the pandemic low.

And here is a graph I'm following concerning COVID in wastewater as of July 11th:

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

COVID in wastewater is increasing - especially in the West and South - and unfortunately this suggests weekly deaths will likely increase further. 

by Calculated Risk on 7/12/2024 12:45:00 PM

Today, in the Calculated Risk Real Estate Newsletter: 2nd Look at Local Housing Markets in June

A brief excerpt:

NOTE: The tables for active listings, new listings and closed sales all include a comparison to June 2019 for each local market (some 2019 data is not available).

This is the second look at several early reporting local markets in May. I’m tracking over 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.

Closed sales in June were mostly for contracts signed in April and May when 30-year mortgage rates averaged 6.99% and 7.06%, respectively (Freddie Mac PMMS). May was the first month since last Fall with average 30-year mortgage rates over 7%.
...
In June, sales in these markets were down 11.8% YoY. Last month, in May, these same markets were down 0.3% year-over-year Not Seasonally Adjusted (NSA).
...
This is a year-over-year decrease NSA for these early reporting markets. However, there were two fewer working days in June 2024 compared to June 2023 (19 vs 21), so seasonally adjusted sales will be much higher than the NSA data suggests.
...
Many more local markets to come!

There is much more in the article.

by Calculated Risk on 7/12/2024 10:50:00 AM

From BofA:

Since our last weekly publication, 2Q GDP tracking is up one-tenth to 2.0% q/q saar. The increase largely results from a lower-than-expected June CPI print. [July 12th estimate]
emphasis added

From Goldman:

We lowered our Q2 GDP forecast to +1.8% (qoq ar). [July 8th estimate]

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 2.0 percent on July 10, up from 1.5 percent on July 3. After last Friday’s employment report from the Bureau of Labor Statistics and this morning’s wholesale trade report from the US Census Bureau, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth increased from 1.1 percent and 6.5 percent, respectively, to 1.5 percent and 7.6 percent. [July 10th estimate]

by Calculated Risk on 7/12/2024 08:12:00 AM

The BLS reported yesterday:

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 3.3 percent over the last 12 months to an index level of 308.163 (1982-84=100). For the month, the index increased 0.1 percent prior to seasonal adjustment.

CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). The calculation dates have changed over time (see Cost-of-Living Adjustments), but the current calculation uses the average CPI-W for the three months in Q3 (July, August, September) and compares to the average for the highest previous average of Q3 months. Note: this is not the headline CPI-U and is not seasonally adjusted (NSA).

• In 2023, the Q3 average of CPI-W was 301.236.

The 2023 Q3 average was the highest Q3 average, so we only have to compare Q3 this year to last year.

Click on graph for larger image.

This graph shows CPI-W since January 2000. The red lines are the Q3 average of CPI-W for each year.

Note: The year labeled is for the calculation, and the adjustment is effective for December of that year (received by beneficiaries in January of the following year).

CPI-W was up 2.9% year-over-year in May, and although this is very early - we need the data for July, August and September - my very early guess is COLA will probably be around 2.5% this year, the smallest increase since 1.3% in 2021.

Contribution and Benefit Base

The contribution base will be adjusted using the National Average Wage Index. This is based on a one-year lag. The National Average Wage Index is not available for 2023 yet, although we know wages increased solidly in 2023. If wages increased 5% in 2023, then the contribution base next year will increase to around $177,000 in 2025, from the current $168,600.

Remember - this is an early look. What matters is average CPI-W, NSA, for all three months in Q3 (July, August and September).

by Calculated Risk on 7/11/2024 07:00:00 PM

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

Friday:
• At 8:30 AM ET, The Producer Price Index for June from the BLS. The consensus is for a 0.1% increase in PPI, and a 0.2% increase in core PPI.

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