by Calculated Risk on 7/22/2024 11:20:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: NMHC: "Apartment Market Conditions Continue to Loosen"

Excerpt:

From the NMHC: From the NMHC: Apartment Market Conditions Continue to Loosen, Though Deal Flow Increased for the Second Straight Quarter Amidst More Favorable Conditions for Debt Financing

Apartment market conditions came in mixed in the National Multifamily Housing Council’s (NMHC’s) Quarterly Survey of Apartment Market Conditions for July 2024. While the Debt Financing (63) and Sales Volume (57) indexes indicated more favorable conditions this quarter, Equity Financing (49) and Market Tightness (47) came in below the breakeven level (50).
...
“Concessions have become commonplace in markets with elevated levels of deliveries, as survey respondents reported overall looser market conditions for the eighth consecutive quarter,” noted NMHC Economist and Senior Director of Research, Chris Bruen.
...

• The Market Tightness Index came in at 47 this quarter – below the breakeven level of 50 – indicating looser market conditions for the eighth consecutive quarter. Half of respondents, though, thought market conditions were unchanged compared to three months ago while 27% thought markets have become looser, down from 37% in April. Twenty-two percent of respondents reported tighter markets than three months ago.

The quarterly index increased to 47 in July from 41 in April. Any reading below 50 indicates looser conditions from the previous quarter.

This index has been an excellent leading indicator for rents and vacancy rates, and this suggests higher vacancy rates and a further weakness in asking rents. This is the eighth consecutive quarter with looser conditions than the previous quarter.

There is much more in the article.

by Calculated Risk on 7/22/2024 08:11:00 AM

Altos reports that active single-family inventory was up 2.6% week-over-week. Inventory is now up 35.3% from the February seasonal bottom.

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of July 19th, inventory was at 668 thousand (7-day average), compared to 651 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 39.1% compared to the same week in 2023 (last week it was up 38.1%), and down 30.3% compared to the same week in 2019 (last week it was down 31.5%). 

Inventory is now above 2020 levels for the same 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 7/21/2024 06:41:00 PM

Weekend:
• Schedule for Week of July 21, 2024

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

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 12 and DOW futures are up 36 (fair value).

Oil prices were lower over the last week with WTI futures at $80.13 per barrel and Brent at $82.63 per barrel. A year ago, WTI was at $77, and Brent was at $81 - so WTI oil prices are up about 5% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.46 per gallon. A year ago, prices were at $3.56 per gallon, so gasoline prices are down $0.10 year-over-year.

by Calculated Risk on 7/21/2024 10:16:00 AM

For house prices, probably the key number in the existing home sales report on Tuesday will be months-of-supply.

It is likely month-of-supply will be close to 4 months in the June report, the highest level since the start of the pandemic. In June 2019, months-of-supply peaked for the year at 4.3 months.

As I mentioned in a recent interview with Lance Lambert at ResiClub:

"I expect this measure to continue to increase, and be over 4 months soon – and to be above 2019 levels in a few months. This doesn’t mean national price declines, but it suggests price growth will slow significantly later this year. We might see national price decline with months-of-supply above 5 (as opposed to 6) since most potential sellers have substantial equity and might be willing to sell for a little less."

by Calculated Risk on 7/20/2024 02:21:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Single Family Starts Up Year-over-year in June; Multi-Family Starts Down 23% YoY

• Lawler: Early Read on Existing Home Sales in June

• Part 2: Current State of the Housing Market; Overview for mid-July 2024

• California Home Sales Down 3% SA YoY in June; 4th Look at Local Housing Markets in June

• 3rd 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 7/20/2024 09:32:00 AM

The key report this week is the advance estimate of Q2 GDP.

Other key reports include June Existing Home Sales, New Home Sales, and Personal Income and Outlays.

For manufacturing, the July Richmond and Kansas City Fed manufacturing surveys will be released.

----- Monday, July 22nd -----
8:30 AM ET: Chicago Fed National Activity Index for June. This is a composite index of other data.

----- Tuesday, July 23rd -----
10:00 AM: Existing Home Sales for June from the National Association of Realtors (NAR). The consensus is for 4.00 million SAAR, down from 4.11 million last month.

The graph shows existing home sales from 1994 through the report last month.

Housing economist Tom Lawler expects the NAR to report sales of 3.93 million SAAR for June.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for July.

----- Wednesday, July 24th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM: New Home Sales for June from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the sales rate for last month.

The consensus is for 640 thousand SAAR, up from 619 thousand in May.

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

----- Thursday, July 25th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 238 thousand initial claims, down from 243 thousand last week.

8:30 AM: Gross Domestic Product, 2nd quarter (advance estimate), and annual update. The consensus is that real GDP increased 1.8% annualized in Q2, up from 1.4% in Q1.

8:30 AM: Durable Goods Orders for June from the Census Bureau. The consensus is for a 0.5% increase in durable goods orders.

11:00 AM: Kansas City Fed Survey of Manufacturing Activity for July.

----- Friday, July 26th -----
8:30 AM ET: Personal Income and Outlays, June 2024. The consensus is for a 0.4% increase in personal income, and for a 0.2% increase in personal spending. And for the Core PCE price index to increase 0.2%.  PCE prices are expected to be up 2.6% YoY, and core PCE prices up 2.6% YoY.

10:00 AM: University of Michigan's Consumer sentiment index (Final for July). The consensus is for a reading of 66.0.

by Calculated Risk on 7/19/2024 07:01:00 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🚩	385	342	≤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 met the original goal to stop posting, I'm going to continue to post now that deaths are increasing again.  

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 increase further. 

by Calculated Risk on 7/19/2024 12:13:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Lawler: Early Read on Existing Home Sales in June

A brief excerpt:

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 3.93 million in June, down 4.4%  from May’s preliminary pace and down 4.4% from last June’s seasonally adjusted pace.

Unadjusted sales should show a materially larger YOY % decline, reflecting this June’s two fewer business days compared to last June.

There is much more in the article.

by Calculated Risk on 7/19/2024 09:58:00 AM

Today, in the Calculated Risk Real Estate Newsletter: California Home Sales Down 3% SA YoY in June; 4th Look at Local Housing Markets in June

A brief excerpt:

The National Association of Realtors (NAR) is scheduled to release June Existing Home Sales on Tuesday July 23rd at 10 AM ET. The early consensus is for 4.00 million SAAR, down from 4.11 million in May, and down from 4.11 million in June 2023.
...
In June, sales in these markets were down 12.7% YoY. Last month, in May, these same markets were down 0.6% 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.
...
More local markets to come!

There is much more in the article.

by Calculated Risk on 7/19/2024 07:59:00 AM

The advance estimate of 2nd quarter GDP will be released next week.

From BofA:

Our 2Q GDP tracking estimate is up two-tenths to 2.4% q/q saar since our last publication, largely due to higher-than-expected industrial production (IP) and housing starts and permits [July 18th estimate]
emphasis added

From Goldman:

We boosted our Q2 GDP tracking estimate by 0.3pp to +2.6% (qoq ar) and our Q2 domestic final sales forecast by 0.1pp to 2.2%. [July 17th 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 2.7 percent on July 17, up from 2.5 percent on July 16. After this morning's housing starts report from the US Census Bureau and industrial production report from the Federal Reserve Board of Governors, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth increased from 2.1 percent and 7.7 percent, respectively, to 2.2 percent and 8.9 percent. [July 17th estimate]