by Calculated Risk on 7/24/2024 10:41:00 AM

Today, in the Calculated Risk Real Estate Newsletter: New Home Sales Decrease to 617,000 Annual Rate in June

Brief excerpt:

The Census Bureau reports New Home Sales in June were at a seasonally adjusted annual rate (SAAR) of 617 thousand. The previous three months were revised up sharply, combined.
...
The next graph shows new home sales for 2023 and 2024 by month (Seasonally Adjusted Annual Rate). Sales in June 2024 were down 7.4% from June 2023.

This is the 2nd consecutive year-over-year decline following 13 consecutive months with a year-over-year increase.

There is much more in the article.

by Calculated Risk on 7/24/2024 10:00:00 AM

The Census Bureau reports New Home Sales in June were at a seasonally adjusted annual rate (SAAR) of 617 thousand.

The previous three months were revised up sharply, combined.

Sales of new single-family houses in June 2024 were at a seasonally adjusted annual rate of 617,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.6 percent below the revised May rate of 621,000 and is 7.4 percent below the June 2023 estimate of 666,000.
emphasis added

Click on graph for larger image.

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

New home sales were close to pre-pandemic levels.

The second graph shows New Home Months of Supply.

The months of supply increased in June to 9.3 months from 9.1 months in May.

The all-time record high was 12.2 months of supply in January 2009. The all-time record low was 3.3 months in August 2020.

This is well above the top of the normal range (about 4 to 6 months of supply is normal).

"The seasonally-adjusted estimate of new houses for sale at the end of June was 476,000. This represents a supply of 9.3 months at the current sales rate. "

Sales were below expectations of 640 thousand SAAR, however sales for the three previous months were revised up significantly, combined. I'll have more later today.

by Calculated Risk on 7/24/2024 07:00:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 2.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending July 19, 2024.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index increased 0.3 percent from the previous week and was 38 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 15 percent lower than the same week one year ago.

“Mortgage rates continued to ease, with the 30-year fixed rate dipping to 6.82 percent, the lowest level since February 2024,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Refinance applications were up, driven by conventional and FHA application activity, as some borrowers took the opportunity to act. Furthermore, the conventional refi index was at its highest level since September 2022.”

Added Kan, “Purchase applications decreased as ongoing affordability challenges persist with rates at their current levels and with home-price appreciation still strong in many markets.”
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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.82 percent from 6.87 percent, with points increasing to 0.59 from 0.57 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is down 15% year-over-year unadjusted.  

Red is a four-week average (blue is weekly).  

Purchase application activity is up slightly from the lows in late October 2023, but still below the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

With higher mortgage rates, the refinance index declined sharply in 2022, and mostly flat lined since then with some increase recently.

by Calculated Risk on 7/23/2024 07:22:00 PM

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 June from the Census Bureau. 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).

by Calculated Risk on 7/23/2024 02:29:00 PM

From WardsAuto: July U.S. Light-Vehicle Sales Tracking to Strongest SAAR So Far in 2024 (pay content).  Brief excerpt:

An expected boost to volume in July from lost sales in June, caused by a cyberattack affecting dealer management systems, will not be as big as initially expected. Dealers apparently were quite adept at finding alternative ways to reporting sales and lost volume was less than thought. Still, July’s forecast SAAR of 16.1 million units is the highest for any month this year and inventory will enter August at a five-year high for the period.
emphasis added

Click on graph for larger image.

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

On a seasonally adjusted annual rate basis, the Wards forecast of 16.1 million SAAR, would be up 5.3% from last month, and up 1.0% from a year ago.

by Calculated Risk on 7/23/2024 10:53:00 AM

Today, in the CalculatedRisk Real Estate Newsletter: NAR: Existing-Home Sales Decreased to 3.89 million SAAR in June

Excerpt:

Sales Year-over-Year and Not Seasonally Adjusted (NSA)

The fourth graph shows existing home sales by month for 2023 and 2024.

Sales declined 5.4% year-over-year compared to June 2023. This was the thirty-fourth consecutive month with sales down year-over-year.

There is much more in the article.

by Calculated Risk on 7/23/2024 10:00:00 AM

From the NAR: Existing-Home Sales Slipped 5.4% in June; Median Sales Price Jumps to Record High of $426,900

Existing-home sales fell in June as the median sales price climbed to the highest price ever recorded for the second consecutive month, according to the National Association of REALTORS®. All four major U.S. regions posted sales declines. Year-over-year, sales waned in the Northeast, Midwest and South but were unchanged in the West.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – receded 5.4% from May to a seasonally adjusted annual rate of 3.89 million in June. Year-over-year, sales also dropped 5.4% (down from 4.11 million in June 2023).
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Total housing inventory registered at the end of June was 1.32 million units, up 3.1% from May and 23.4% from one year ago (1.07 million). Unsold inventory sits at a 4.1-month supply at the current sales pace, up from 3.7 months in May and 3.1 months in June 2023. The last time unsold inventory posted a four-month supply was May 2020 (4.5 months).
emphasis added

Click on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1994.

Sales in June (3.89 million SAAR) were down 5.4% from the previous month and were 5.4% below the June 2023 sales rate.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 1.32 million in June from 1.28 million the previous month.

Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory was up 23.4% year-over-year (blue) in June compared to June 2023.

Months of supply (red) increased to 4.1 months in June from 3.7 months the previous month.

The sales rate was lower than the consensus forecast.  I'll have more later. 

by Calculated Risk on 7/22/2024 04:38:00 PM

From the MBA: Share of Mortgage Loans in Forbearance Increases to 0.23% in June

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance increased to 0.23% as of June 30, 2024. According to MBA’s estimate, 115,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 8.2 million borrowers since March 2020.

The share of Fannie Mae and Freddie Mac loans in forbearance increased 1 basis point to 0.11% in June 2024. Ginnie Mae loans in forbearance increased by 5 basis points to 0.44%, and the forbearance share for portfolio loans and private-label securities (PLS) stayed flat at 0.31%.

“The number of loans in forbearance increased in June for the first time since October of 2022,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Furthermore, the performance of both loan workouts and overall servicing portfolios weakened, particularly for government loans.”

Added Walsh, “There were several factors that impacted homeowners, including the uptick of severe weather events that hit multiple regions of the country as well as early signs of consumer distress that could potentially impact borrowers’ ability to pay their mortgages. Additionally, June’s month-end fell on a Sunday, and the weekend timing typically leads to higher mortgage defaults in any given month.”
emphasis added

At the end of June, there were about 115,000 homeowners in forbearance plans.

by Calculated Risk on 7/22/2024 03:21:00 PM

From ICE: ICE First Look at Mortgage Performance: June Sees Calendar-Driven Spike in Delinquencies; Foreclosures Remain Historically Low

• Coming off a near-record low in May and with June ending on a Sunday, the national delinquency rate jumped +14.5% (+45 basis points) to 3.49%, its second highest level in 18 months

• Sunday month-ends often lead to sharp, but typically temporary, spikes in delinquent mortgages, as payments made on the last day of a given month are not processed until the following month

• As such, June saw a +19.6% increase in the number of borrowers a single payment past due – the highest inflow since May 2020 – while 60-day delinquencies rose 11.8% to a five-month high

• Though up 5.1% from May, serious delinquencies (loans 90+ days past due but not in active foreclosure) were still down 8.5% year over year and 10.1% below pre-pandemic levels

• Foreclosure starts declined 6.2% in June – pushing active foreclosure inventory to its lowest point since the end of COVID-era moratoriums, now 34% below pre-pandemic levels

• 5.3K foreclosure sales were completed nationally in June, representing a -14.9% month-over-month decrease to their lowest level since February 2022, still well below pre-pandemic norms

• Prepayments eased -7.6% from May, breaking a six-month streak of increasing prepay activity as we near the typical seasonal peak of home sales, and affordability and rate constraints persist
emphasis added

Click on graph for larger image.

Here is a table from ICE.

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).
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“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.