by Calculated Risk on 8/10/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• 1st Look at Local Housing Markets in July Early Reports Suggest New Cycle Low for NAR reported Sales in July

• ICE Mortgage Monitor: Existing Home Inventory Surges in Florida and Texas

• How Much will the Fannie & Freddie Conforming Loan Limit Change for 2025?

• Atlanta Fed: Home Ownership Affordability Monitor

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

by Calculated Risk on 8/10/2024 08:11:00 AM

The key reports this week are July CPI, Retail Sales and Housing Starts.

For manufacturing, the Industrial Production report will be released.

----- Monday, August 12th -----
No major economic releases scheduled.

----- Tuesday, August 13th -----
6:00 AM ET: NFIB Small Business Optimism Index for July.

8:30 AM: The Producer Price Index for July from the BLS. The consensus is for a 0.2% increase in PPI, and a 0.2% increase in core PPI.

----- Wednesday, August 14th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The Consumer Price Index for July from the BLS. The consensus is for a 0.2% increase in CPI, and a 0.2% increase in core CPI.  The consensus is for CPI to be up 3.0% year-over-year and core CPI to be up 3.2% YoY.

----- Thursday, August 15th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 238 thousand initial claims, up from 233 thousand last week.

8:30 AM: Retail sales for July is scheduled to be released.  The consensus is for 0.3% increase in retail sales.

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

8:30 AM: The New York Fed Empire State manufacturing survey for August. The consensus is for a reading of -6.0, up from -6.6.

8:30 AM: the Philly Fed manufacturing survey for August. The consensus is for a reading of 6.5, down from 14.0.

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

This graph shows industrial production since 1967.

The consensus is for a 0.1% increase in Industrial Production, and for Capacity Utilization to decrease to 78.7%.

10:00 AM: The August NAHB homebuilder survey. The consensus is for a reading of 42, unchanged from 42. Any number below 50 indicates that more builders view sales conditions as poor than good.

----- Friday, August 16th -----
8:30 AM ET: Housing Starts for July.

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

The consensus is for 1.342 million SAAR, down from 1.353 million SAAR in June.

10:00 AM: State Employment and Unemployment (Monthly) for July 2024

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

by Calculated Risk on 8/09/2024 07:35:00 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🚩	457	435	≤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 above the goal again.  

And here is a graph I'm following concerning COVID in wastewater as of August 9th:

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

COVID in wastewater is increasing everywhere.

by Calculated Risk on 8/09/2024 02:01:00 PM

Here is another monthly update on lumber prices.

SPECIAL NOTE: The CME group discontinued the Random Length Lumber Futures contract on May 16, 2023.  I switched to a physically-delivered Lumber Futures contract that was started in August 2022. 

Unfortunately, this impacts long term price comparisons since the new contract was priced about 24% higher than the old random length contract for the period when both contracts were available.

This graph shows CME random length framing futures through last August (blue), and the new physically-delivered Lumber Futures (LBR) contract starting in August 2022 (Red).

LBR is currently at $514.00 per 1000 board feet, up 4% from a year ago.

Click on graph for larger image.

There is somewhat of a seasonal demand for lumber, and lumber prices frequently peak in the first half of the year.

We didn't see a significant runup in the Spring period of 2023 or 2024 due to the housing slowdown.  

by Calculated Risk on 8/09/2024 11:01:00 AM

From BofA:

Next week, we will launch our 3Q GDP tracker with the July retail sales print. [August 9th update]
emphasis added

From Goldman:

We left our Q3 GDP tracking estimate unchanged at 2.6% (quarter-over-quarter annualized) and our Q3 domestic final sales forecast unchanged at +2.0%. [August 6th estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2024 is 2.9 percent on August 8, unchanged from August 6 after rounding. After this morning's wholesale trade release from the US Census Bureau, the nowcast of third-quarter real gross private domestic investment growth increased from 2.8 percent to 2.9 percent. [August 8th estimate]

by Calculated Risk on 8/09/2024 08:21:00 AM

From STR: U.S. hotel results for week ending 3 August

The U.S. hotel industry reported slightly positive comparisons year over year, according to CoStar’s latest data through 3 August. ...

28 July through 3 August 2024 (percentage change from comparable week in 2023):

• Occupancy: 69.4% (+0.8%)
• Average daily rate (ADR): US$159.63 (+0.6%)
• Revenue per available room (RevPAR): US$110.84 (+1.3%)
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 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.

This was probably the peak for the 4-week average of the occupancy rate in 2024, and the average will start declining into the late summer and early Fall.

by Calculated Risk on 8/08/2024 03:21:00 PM

From Dodge Data Analytics: Dodge Momentum Index Expands Another 8% in July

The Dodge Momentum Index (DMI), issued by Dodge Construction Network, increased 7.9% in July to 216.3 (2000=100) from the revised June reading of 200.5. Over the month, commercial planning increased 6.8% and institutional planning expanded 11.1%.

“While data centers have had an outsized influence on nonresidential planning activity in recent months, more momentum is building across many other major sectors and diversifying the story behind July’s growth,” stated Sarah Martin, associate director of forecasting at Dodge Construction Network. “The potential Fed rate cut in September is becoming increasingly more likely, alongside slower inflation and weaker labor market conditions. This is likely driving owners and developers to remain optimistic about 2025 market conditions and pushing more projects into the planning queue.”

Within the commercial portion of the Index, growth was widespread across all segments. Data centers continued to play an important role in growth, and retail planning has been steadily accelerating over the past eight months. On the institutional side, healthcare was the primary driver of this month’s expansion. In July, the DMI was 17% higher than in July of 2023. The commercial segment was up 35% from year-ago levels, while the institutional segment was down 14% over the same period.
...
The DMI is a monthly measure of the value of nonresidential building projects going into planning, shown to lead construction spending for nonresidential buildings by a full year.
emphasis added

Click on graph for larger image.

This graph shows the Dodge Momentum Index since 2002. The index was at 198.6 in June, up from 1179.9 the previous month.

According to Dodge, this index leads "construction spending for nonresidential buildings by a full year".  This index suggests a slowdown in 2024 and early 2025, but a pickup in mid-2025.  

Commercial construction is typically a lagging economic indicator.

by Calculated Risk on 8/08/2024 01:32:00 PM

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For June, Realtor.com reported inventory was up 36.6% YoY, but still down 30.6% compared to April 2017 to 2019 levels. 

 Now - on a weekly basis - inventory is up 35.9% YoY.

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View—Data for Week Ending August 3, 2024

• Active inventory increased, with for-sale homes 35.9% above year-ago levels.

For the 39th week in a row, the number of for-sale homes grew compared with one year ago. While the gap with last year has generally been increasing, helping propel inventory to a post-pandemic high in July, this past week the rise was 35.9%, slightly more modest than the rate observed in the prior week.

• New listings–a measure of sellers putting homes up for sale–were back up this week by 6.7% from one year ago.

After last week’s trend breaking decline, new listings were back up this week, marking a 16th week of growth in the last 18 weeks.

Here is a graph of the year-over-year change in inventory according to realtor.com. 

Inventory was up year-over-year for the 39th consecutive week.  

However, inventory is still historically low.

New listings remain below typical pre-pandemic levels.

by Calculated Risk on 8/08/2024 10:53:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Atlanta Fed: Home Ownership Affordability Monitor

A brief excerpt:

Here is another measure of affordability that readers might find useful from the Atlanta Fed: Home Ownership Affordability Monitor

Here is a graph of affordability (higher is more affordable), and of the year-over-year change in affordability through May 2024. By this measure, houses are essentially the least affordable since the Atlanta Fed started tracking affordability (October 2023 was slightly less affordable than May 2024). Note that the Atlanta Fed projects income.

There is much more in the article.

by Calculated Risk on 8/08/2024 08:30:00 AM

The DOL reported:

In the week ending August 3, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 17,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 249,000 to 250,000. The 4-week moving average was 240,750, an increase of 2,500 from the previous week's revised average. The previous week's average was revised up by 250 from 238,000 to 238,250.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 240,750.

The previous week was revised up.

Weekly claims were lower than the consensus forecast.