by Calculated Risk on 9/23/2024 11:01:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Watch Months-of-Supply!

A brief excerpt:

Both inventory and sales are well below pre-pandemic levels, and I think we need to keep an eye on months-of-supply to forecast price changes. Historically nominal prices declined when months-of-supply approached 6 months - and that is unlikely any time soon - however, as expected, months-of-supply is back to 2019 levels.

Months-of-supply was at 4.2 months in August compared to 4.0 months in August 2019. Even though inventory has declined significantly compared to 2019, sales have fallen even more - pushing up months-of-supply.

The following graph shows months-of-supply since 2017. Note that months-of-supply is higher than the last 3 years (2021 - 2023), and above August 2019. Months-of-supply was at 4.2 in August 2017 and 4.3 in August 2018. In 2020 (black), months-of-supply increased at the beginning of the pandemic and then declined sharply.
...
What would it take to get months-of-supply above 5 months? If sales stay depressed at 2023 and 2024 levels, how much would inventory have to increase to put months-of-supply at 5 months by, say, June 2024?

There is much more in the article.

by Calculated Risk on 9/23/2024 08:11:00 AM

Altos reports that active single-family inventory was up 1.6% week-over-week. Inventory is now up 46.8% from the February seasonal bottom.  

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of September 20th, inventory was at 725 thousand (7-day average), compared to 714 thousand the prior week. 

This is the highest level of inventory since May 2020.  

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.  

Inventory was up 37.2% compared to the same week in 2023 (last week it was up 37.4%), and down 24.0% compared to the same week in 2019 (last week it was down 25.2%). 

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 9/22/2024 07:55:00 PM

Weekend:
• Schedule for Week of September 22, 2024

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

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

Oil prices were up over the last week with WTI futures at $71.01 per barrel and Brent at $74.50 per barrel. A year ago, WTI was at $90, and Brent was at $94 - so WTI oil prices are down about 20% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.16 per gallon. A year ago, prices were at $3.84 per gallon, so gasoline prices are down $0.68 year-over-year.

by Calculated Risk on 9/22/2024 08:22:00 AM

For fun:

Through August 2024, the employment report indicated positive job growth for 44 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939).  

It appears this streak will survive the annual benchmark revision (that will revise down job growth).

Trivia: The only presidential term that saw job growth every month was President Obama's 2nd term. 

Although job growth has slowed recently, we might see job growth every month during the current term.

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2019	100
2	1990	48
3	2007	46
4	1979	45
5	20241	44
6 tie	1943	33
6 tie	1986	33
6 tie	2000	33
9	1967	29
10	1995	25
1Currrent Streak

by Calculated Risk on 9/21/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• NAR: Existing-Home Sales Decreased to 3.86 million SAAR in August

• Housing Starts Increased to 1.356 million Annual Rate in August

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

• Q2 Update: Delinquencies, Foreclosures and REO

• Lawler: Early Read on Existing Home Sales in August

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

by Calculated Risk on 9/21/2024 08:11:00 AM

The key reports this week are August New Home sales, the third estimate of Q2 GDP, Personal Income and Outlays for August, and Case-Shiller house prices for July.

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

----- Monday, September 23rd -----
8:30 AM ET: Chicago Fed National Activity Index for August. This is a composite index of other data.

----- Tuesday, September 24th -----
9:00 AM: S&P/Case-Shiller House Price Index for July.

This graph shows the year-over-year change in the seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the most recent report (the Composite 20 was started in January 2000).

The consensus is for a 5.9% year-over-year increase in the Composite 20 index for July.

9:00 AM: FHFA House Price Index for July. This was originally a GSE only repeat sales, however there is also an expanded index.

10:00 AM: the Richmond Fed manufacturing survey for September.

----- Wednesday, September 25th -----
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 August 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 700 thousand SAAR, down from 739 thousand in July.

----- Thursday, September 26th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 226 thousand initial claims, up from 219 thousand last week.

8:30 AM: Gross Domestic Product, 2nd Quarter 2024 (Third Estimate), and Corporate Profits (Revised) The consensus is that real GDP increased 3.0% annualized in Q2, unchanged from the second estimate of 3.0%.

8:30 AM: Durable Goods Orders for August from the Census Bureau. The consensus is for a 2.8% decrease in durable goods orders.

9:20 AM: Speech, Fed Chair Jerome Powell, Opening Remarks (via pre-recorded video), At the 2024 U.S. Treasury Market Conference, Federal Reserve Bank of New York, New York, N.Y.

10:00 AM: Pending Home Sales Index for August. The consensus is 3.1% increase in the index.

11:00 AM: the Kansas City Fed manufacturing survey for September. 

----- Friday, September 27th -----
8:30 AM: Personal Income and Outlays, August 2024.  The consensus is for a 0.4% increase in personal income, and for a 0.3% increase in personal spending. And for the Core PCE price index to increase 0.2%.

10:00 AM: University of Michigan's Consumer sentiment index (Final for September). The consensus is for a reading of 67.7.

by Calculated Risk on 9/20/2024 06:44:00 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🚩	1,139	1,022	≤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.  

Weekly deaths are more almost quadruple the low of 302 in early June.

And here is a graph I'm following concerning COVID in wastewater as of September 19th:

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

COVID in wastewater is now declining.

by Calculated Risk on 9/20/2024 11:26:00 AM

From Goldman:

We left our Q3 GDP tracking estimate unchanged at +3.0% (quarter-over-quarter annualized) and our domestic final sales forecast unchanged at +2.9%.
emphasis added [Sept 19th estimate]

And from the Atlanta 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 September 18, down from 3.0 percent on September 17. [Sept 18th estimate]

by Calculated Risk on 9/20/2024 09:01:00 AM

From STR: U.S. hotel results for week ending 14 September

The U.S. hotel industry reported mostly negative year-over-year comparisons, according to CoStar’s latest data through 14 September. ...

8-14 September 2024 (percentage change from comparable week in 2023):

• Occupancy: 66.6% (-1.7%)
• Average daily rate (ADR): US$162.05 (+0.2%)
• Revenue per available room (RevPAR): US$107.86 (-1.4%)
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 last year and is close to 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 over the next several during the fall business travel season.

by Calculated Risk on 9/19/2024 07:15:00 PM

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

Friday:
• At 10:00 AM ET, State Employment and Unemployment (Monthly) for August 2024