by Calculated Risk on 11/18/2024 12:47:00 PM

Today, in the Calculated Risk Real Estate Newsletter: 3rd Look at Local Housing Markets in October

A brief excerpt:

NOTE: The tables for active listings, new listings and closed sales all include a comparison to October 2019 for each local market (some 2019 data is not available).

This is the third look at local markets in October. I’m tracking over 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.

Closed sales in October were mostly for contracts signed in August and September when 30-year mortgage rates averaged 6.50% and 6.18%, respectively (Freddie Mac PMMS). These were the lowest mortgage rate in 2 years!
...
Here is a look at months-of-supply using NSA sales. Note the regional differences, especially in Florida and Texas (although October statistics in Florida were impacted by Hurricane Milton). This pickup in inventory is impacting prices in Florida.
...
Many more local markets to come!

There is much more in the article.

by Calculated Risk on 11/18/2024 10:00:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 46, up from 43 last month. Any number below 50 indicates that more builders view sales conditions as poor than good.

From the NAHB: Builder Confidence Moves Higher as Election Uncertainty is Lifted

Builder sentiment improved for the third straight month and builders expect market conditions will continue to improve with Republicans winning control of the White House and Congress.

Builder confidence in the market for newly built single-family homes was 46 in November, up three points from October, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today.

“With the elections now in the rearview mirror, builders are expressing increasing confidence that Republicans gaining all the levers of power in Washington will result in significant regulatory relief for the industry that will lead to the construction of more homes and apartments,” said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan. “This is reflected in a huge jump in builder sales expectations over the next six months.”

“While builder confidence is improving, the industry still faces many headwinds such as an ongoing shortage of labor and buildable lots along with elevated building material prices,” said NAHB Chief Economist Robert Dietz. “Moreover, while the stock market cheered the election result, the bond market has concerns, as indicated by a rise for long-term interest rates. There is also policy uncertainty in front of the business sector and housing market as the executive branch changes hands.”

The latest HMI survey also revealed that 31% of builders cut home prices in November. This share has remained essentially unchanged since July, hovering between 31% and 33%. Meanwhile, the average price reduction was 5%, slightly below the 6% rate posted in October. The use of sales incentives was 60% in November, slightly down from 62% in October.
...
All three HMI sub-indices were up in November. The index charting current sales conditions rose two points to 49, the component measuring sales expectations in the next six months increased seven points to 64 and the gauge charting traffic of prospective buyers posted a three-point gain to 32.

Looking at the three-month moving averages for regional HMI scores, the Northeast increased four points to 55, the Midwest moved three points higher to 44, the South edged up one point to 42 and the West held steady at 41.
emphasis added

Click on graph for larger image.

This graph shows the NAHB index since Jan 1985.

This was above the consensus forecast.

by Calculated Risk on 11/18/2024 08:11:00 AM

Altos reports that active single-family inventory was up 0.1% week-over-week.  Inventory is now 2.4% below the peak for the year (4 weeks ago).

Inventory will now decline seasonally until early next year.

The first graph shows the seasonal pattern for active single-family inventory since 2015.

Click on graph for larger image.

The red line is for 2024.  The black line is for 2019.  

Inventory was up 26.7% compared to the same week in 2023 (last week it was up 27.3%), and down 18.5% compared to the same week in 2019 (last week it was down 19.2%). 

Back in June 2023, inventory was down almost 54% compared to 2019, so the gap to more normal inventory levels is about two-thirds closed.

This second inventory graph is courtesy of Altos Research.

As of Nov 15th, inventory was at 722 thousand (7-day average), compared to 722 thousand the prior week. 

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 11/17/2024 06:57:00 PM

Weekend:
• Schedule for Week of November 17, 2024

Monday:
• At 10:00 AM ET, The November NAHB homebuilder survey. The consensus is for a reading of 42, down from 44. Any number below 50 indicates that more builders view sales conditions as poor than good.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 5 and DOW futures are down 39 (fair value).

Oil prices were down over the last week with WTI futures at $66.78 per barrel and Brent at $70.91 per barrel. A year ago, WTI was at $76, and Brent was at $81 - so WTI oil prices are down about 12% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.03 per gallon. A year ago, prices were at $3.29 per gallon, so gasoline prices are down $0.26 year-over-year.

by Calculated Risk on 11/17/2024 08:57:00 AM

From STR: U.S. hotel results for week ending 9 November

As projected for election week, the U.S. hotel industry reported negative year-over-year performance comparisons, according to CoStar’s latest data through 9 November. ...

3-9 November 2024 (percentage change from comparable week in 2023):

• Occupancy: 62.6% (-3.5%)
• Average daily rate (ADR): US$156.11 (-0.1%)
• Revenue per available room (RevPAR): US$97.73 (-3.5%)
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 above both last year and the median rate for the period 2000 through 2023 (Blue) - and will likely finish mostly unchanged year-over-year.

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

The 4-week average of the occupancy rate has peaked for the fall business travel season and will decline seasonally through the holidays.

by Calculated Risk on 11/16/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Part 1: Current State of the Housing Market; Overview for mid-November 2024

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

• NY Fed: Mortgage Originations by Credit Score, Delinquencies Increase, Foreclosures Remain Low

• 2nd Look at Local Housing Markets in October

• Watch Months-of-Supply!

• Lawler: Early Read on Existing Home Sales in October

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

by Calculated Risk on 11/16/2024 08:11:00 AM

The key economic reports this week are Housing Starts and Existing Home sales.

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

----- Monday, November 18th -----
10:00 AM: The November NAHB homebuilder survey. The consensus is for a reading of 42, down from 44. Any number below 50 indicates that more builders view sales conditions as poor than good.

----- Tuesday, November 19th -----
8:30 AM: Housing Starts for October.

This graph shows single and total housing starts since 1968.

The consensus is for 1.338 million SAAR, down from 1.354 million SAAR.

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

----- Wednesday, November 20th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

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

----- Thursday, November 21st -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 222 thousand initial claims, up from 217 thousand last week.

8:30 AM: the Philly Fed manufacturing survey for November. The consensus is for a reading of 5.0, down from 10.3.

10:00 AM: Existing Home Sales for October from the National Association of Realtors (NAR). The consensus is for 3.88 million SAAR, up from 3.84 million in September.

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

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

----- Friday, November 22nd -----
10:00 AM: University of Michigan's Consumer sentiment index (Final for November).

by Calculated Risk on 11/15/2024 07:46:00 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	675	783	≤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 continuing to post now that deaths are above the goal again.  

Weekly deaths are now declining and will likely continue to decline based on wastewater sampling but are still more than double the low of 302 in early June.

And here is a graph I'm following concerning COVID in wastewater as of November 14th:

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

COVID in wastewater is fairly low - only about 20% higher than the lows of last May - suggesting weekly deaths will continue to decline.

by Calculated Risk on 11/15/2024 03:22:00 PM

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

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 3.97 million in October, up 3.4% from September’s preliminary pace and up 3.1% from last October’s seasonally adjusted pace.  Unadjusted sales should show a moderately higher YOY % gain, reflecting this October’s higher business day count compared to last October’s.

Local realtor/MLS reports suggest that the median existing single-family home sales price last month was up by about 4.7% from a year earlier.

CR Note: The NAR is scheduled to release October Existing Home sales on Thursday, Nov 21st at 10:00 AM. The consensus is for 3.88 million SAAR, up from 3.84 million in September. Last year, the NAR reported sales in October 2023 at 3.85 million SAAR. This will be the first year-over-year gain since August 2021 following 37 months with a year-over-year decline.

There is much more in the article.

by Calculated Risk on 11/15/2024 02:40:00 PM

From BofA:

Next week, we will initiate our 4Q GDP tracker after the October retail sales print today and October industrial production, housing starts, existing home sales and September business inventories will impact our 3Q and 4Q tracking estimate. [Current forecast 2.0%, Nov 15th]
emphasis added

From Goldman:

Following this morning’s retail sales and industrial production reports, we lowered our Q4 GDP tracking estimate by 0.1pp to +2.5% (quarter-over-quarter annualized) and left our Q4 domestic final sales forecast unchanged on a rounded basis at +2.0%. [Nov 15th estimate]

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2024 is 2.5 percent on November 15, unchanged from November 7 after rounding. After recent releases from the US Census Bureau, the US Bureau of Labor Statistics, and the Federal Reserve Board of Governors, an increase in the nowcast of fourth-quarter real personal consumption expenditures growth was offset by a decrease in the nowcast of fourth-quarter real gross private domestic investment growth. [Nov 15th estimate]