by Calculated Risk on 11/15/2024 11:40:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Part 2: Current State of the Housing Market; Overview for mid-November 2024

A brief excerpt:

Yesterday, in Part 1: Current State of the Housing Market; Overview for mid-November 2024 I reviewed home inventory, housing starts and sales.

In Part 2, I will look at house prices, mortgage rates, rents and more.
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The Case-Shiller National Index increased 4.2% year-over-year in August and will likely slow further in the September report (based on other data).

The MoM increase in the seasonally adjusted (SA) Case-Shiller National Index was at 0.32% (a 4.0% annual rate), This was the nineteenth consecutive MoM increase in the seasonally adjusted index.

There is much more in the article.

by Calculated Risk on 11/15/2024 09:15:00 AM

Earlier from the Fed: Industrial Production and Capacity Utilization

Industrial production (IP) decreased 0.3 percent in October after declining 0.5 percent in September. A strike at a major producer of civilian aircraft held down total IP growth by an estimated 0.3 percentage point in September and 0.2 percentage point in October. Hurricane Milton and the lingering effects of Hurricane Helene together reduced October IP growth 0.1 percentage point. In October, manufacturing output moved down 0.5 percent, the index for mining rose 0.3 percent, and the index for utilities gained 0.7 percent. At 102.3 percent of its 2017 average, total IP in October was 0.3 percent below its year-earlier level. Capacity utilization moved down to 77.1 percent in October, a rate that is 2.6 percentage points below its long-run (1972–2023) average.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and above the level in February 2020 (pre-pandemic).

Capacity utilization at 77.1% is 2.6% below the average from 1972 to 2023.  This was below consensus expectations.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production decreased to 102.3. This is above the pre-pandemic level.

Industrial production was below consensus expectations.

The Boeing strike and hurricanes impacted the report this month.

by Calculated Risk on 11/15/2024 08:30:00 AM

On a monthly basis, retail sales increased 0.4% from September to October (seasonally adjusted), and sales were up 2.8 percent from October 2023.

From the Census Bureau report:

Advance estimates of U.S. retail and food services sales for October 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $718.9 billion, an increase of 0.4 percent from the previous month, and up 2.8 percent from October 2023. ... The August 2024 to September 2024 percent change was revised from up 0.4 percen to up 0.8 percent.
emphasis added

Click on graph for larger image.

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

Retail sales ex-gasoline was up 0.4% in October.

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail and Food service sales, ex-gasoline, increased by 3.5% on a YoY basis.

The change in sales in October were above expectations, and sales in August and September were revised up, combined.

by Calculated Risk on 11/14/2024 07:40:00 PM

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

Friday:
• At 8:30 AM ET, Retail sales for October will be released. The consensus is for a 0.3% increase in retail sales.

• Also at 8:30 AM, The New York Fed Empire State manufacturing survey for November. The consensus is for a reading of 3.5, up from -11.9.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for October. The consensus is for a 0.2% decrease in Industrial Production, and for Capacity Utilization to decrease to 77.3%.

by Calculated Risk on 11/14/2024 04:15:00 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 September, Realtor.com reported inventory was up 29.2% YoY, but still down 21.1% compared to the 2017 to 2019 same month levels. 

 Now - on a weekly basis - inventory is up 26.1% 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 Nov. 9, 2024

• Active inventory increased, with for-sale homes 26.1% above year-ago levels

For the 53rd consecutive week, the number of listings for sale has grown year over year. This week’s growth was lower than last week’s, the seventh week of slowing growth, and the lowest annual change since late March. Slowing listing activity and stifled buyer demand have resulted in slowing inventory growth.

• New listings—a measure of sellers putting homes up for sale—climbed 1.7% this week compared with one year ago

The number of new listings on the market picked up compared with the same week last year. The recent upward trajectory of mortgage rates could largely discourage sellers from listing their homes as roughly 84% of outstanding mortgages have a rate of 6% or lower.

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

Inventory was up year-over-year for the 53rd consecutive week.  

However, inventory is still historically low.

New listings remain below typical pre-pandemic levels.

by Calculated Risk on 11/14/2024 03:00:00 PM

From Fed Chair Powell: Economic Outlook. Excerpt:

The recent performance of our economy has been remarkably good, by far the best of any major economy in the world. Economic output grew by more than 3 percent last year and is expanding at a stout 2.5 percent rate so far this year. ... The labor market remains in solid condition, having cooled off from the significantly overheated conditions of a couple of years ago, and is now by many metrics back to more normal levels that are consistent with our employment mandate.
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We are moving policy over time to a more neutral setting. But the path for getting there is not preset. In considering additional adjustments to the target range for the federal funds rate, we will carefully assess incoming data, the evolving outlook, and the balance of risks. The economy is not sending any signals that we need to be in a hurry to lower rates. The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully. Ultimately, the path of the policy rate will depend on how the incoming data and the economic outlook evolve.
emphasis added

by Calculated Risk on 11/14/2024 11:18:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-November 2024

A brief excerpt:

This 2-part overview for mid-October provides a snapshot of the current housing market.

I always focus first on inventory, since inventory usually tells the tale! I’m watching months-of-supply closely.
...
New home inventory, as a percentage of total inventory, is still very high. The following graph uses Not Seasonally Adjusted (NSA) existing home inventory from the National Association of Realtors® (NAR) and new home inventory from the Census Bureau (only completed and under construction inventory).

It took a number of years following the housing bust for new home inventory to return to the pre-bubble percent of total inventory. Then, with the pandemic, existing home inventory collapsed and now the percent of new homes is 20.8% of the total for sale inventory, down from a peak of 27.2% in December 2022.

The percent of new homes of total inventory should continue to decline as existing home inventory increases. However, the percent of new home inventory will increase seasonally over the Winter as existing homes are withdrawn from the market.

There is much more in the article.

by Calculated Risk on 11/14/2024 08:30:00 AM

The DOL reported:

In the week ending November 9, the advance figure for seasonally adjusted initial claims was 217,000, a decrease of 4,000 from the previous week's unrevised level of 221,000. The 4-week moving average was 221,000, a decrease of 6,250 from the previous week's unrevised average of 227,250.
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 decreased to 221,000.

The previous week was unrevised.

Weekly claims were below the consensus forecast.

by Calculated Risk on 11/13/2024 07:24:00 PM

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

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 255 thousand initial claims, up from 221 thousand last week.

• Also at 8:30 AM, The Producer Price Index for October from the BLS. The consensus is for a 0.3% increase in PPI, and a 0.2% increase in core PPI.

• At 3:00 PM, Speech, Fed Chair Jerome Powell, Economic Outlook, At Conversation with Federal Reserve Chair Jerome Powell, Dallas, Texas

by Calculated Risk on 11/13/2024 03:11:00 PM

The Cleveland Fed released the median CPI and the trimmed-mean CPI.

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% in October. The 16% trimmed-mean Consumer Price Index increased 0.3%. "The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report".

Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. 

On a year-over-year basis, the median CPI rose 4.1% (unchanged from 4.1% in September), the trimmed-mean CPI rose 3.2% (unchanged from 3.2%), and the CPI less food and energy rose 3.2% (unchanged from 3.2%). 

Core PCE is for September was up 2.7% YoY, unchanged from 2.7% in August.

Note: The Cleveland Fed released the median CPI details. Used cares increased at a 38% annual rate in October.