RSS Feed by Calculated Risk on 4/24/2023 09:00:00 PM
Monday, April 24, 2023
Tuesday: New Home Sales, Case-Shiller House Prices
From Matthew Graham at Mortgage News Daily: Mortgage Rates Slightly Lower to Start The Week
The average lender moved slightly lower in cost. The change was small enough that most borrowers will see it in the form of a modest reduction in upfront costs without any change in the quoted interest rate (relative to what the same scenario would have been quoted on Friday). [30 year fixed 6.59%]Tuesday:
emphasis added
• At 9:00 AM ET, S&P/Case-Shiller House Price Index for February. The consensus is for a 2.5% year-over-year increase in the Comp 20 index for February.
• Also at 9:00 AM, FHFA House Price Index for February. This was originally a GSE only repeat sales, however there is also an expanded index.
• At 10:00 AM, New Home Sales for March from the Census Bureau. The consensus is for 630 thousand SAAR, down from 640 thousand in February.
• At 10:00 AM, Richmond Fed Survey of Manufacturing Activity for April.
Vehicle Sales Forecast: "April U.S. Light-Vehicle Sales to Post Strong Growth"
by Calculated Risk on 4/24/2023 04:27:00 PM
From WardsAuto: April U.S. Light-Vehicle Sales to Post Strong Growth; Inventory to Fall from March (pay content). Brief excerpt:
Even though the seasonally adjusted annual rate could decline slightly from the prior quarter’s 15.2 million units, sales volume is forecast to rise a robust 13% year-over-year in Q2. Inventory will undergo a seasonally related month-to-month decline in April but resume growth by the end of the quarter.
emphasis added
Click on graph for larger image.This graph shows actual sales from the BEA (Blue), and Wards forecast for April (Red).
The Wards forecast of 15.5 million SAAR, would be up 4.6% from last month, and up 8.5% from a year ago.
Vehicle sales are usually a transmission mechanism for Federal Open Market Committee (FOMC) policy, although far behind housing. This time vehicle sales were more suppressed by supply chain issues and have picked up recently.
Final Look at Local Housing Markets in March
by Calculated Risk on 4/24/2023 09:56:00 AM
Today, in the Calculated Risk Real Estate Newsletter: Final Look at Local Housing Markets in February
A brief excerpt:
Every month I track about 40 local housing markets in the US to get an early sense of changes in the housing market. After the National Association of Realtors® (NAR) releases the monthly existing home sales report, I pick up additional local market data that is reported after the NAR (and I’m frequently adding more markets). This is the final look at local markets in March.There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/
The big story for March existing home sales was the sharp year-over-year (YoY) decline in sales. Also, active inventory increased YoY, but is still historically low - and new listings were down YoY.
First, here is a table comparing the year-over-year Not Seasonally Adjusted (NSA) declines in sales this year from the National Association of Realtors® (NAR) with the local markets I track. So far, these measures have tracked closely. The NAR reported sales were down 23.0% NSA YoY in February.
...
Note: Even if existing home sales activity bottomed in December (4.03 million SA) and January (4.00 million SA), there are usually two bottoms for housing - the first for activity and the second for prices. See Has Housing "Bottomed"?
My early expectation is we will see a somewhat similar YoY sales decline NSA in April as in March. Even though mortgage rates were higher for contracts signed in March (closed sales in April will be mostly for contracts signed in February and March) sales were already declining in March 2022, as 30-year mortgage rates moved above 4% for the first time since early 2019 (yes, rates were below 4% prior to the pandemic).
More local data coming in May for activity in April!
Housing April 24th Weekly Update: Inventory Increased 2.1% Week-over-week
by Calculated Risk on 4/24/2023 08:30:00 AM
Altos reports that active single-family inventory was up 2.1% week-over-week. Maybe inventory has finally bottomed seasonally. This is the highest inventory level since the week ending March 17th.
Click on graph for larger image.This inventory graph is courtesy of Altos Research.
As of April 21st, inventory was at 414 thousand (7-day average), compared to 405 thousand the prior week.
Year-to-date, inventory is down 15.6%.
The red line is for 2023. The black line is for 2019. Note that inventory is up from the previous two years (the record low was in 2022), but still well below normal levels.
Inventory was up 52.5% compared to the same week in 2022 (last week it was up 51.6%), and down 52.1% compared to the same week in 2019 (last week down 52.4%).
A key will be when inventory starts increasing in 2023 - maybe this is the beginning. If this is the seasonal bottom, it is late in the year (similar timing as 2021).
Mike Simonsen discusses this data regularly on Youtube.
Sunday, April 23, 2023
Sunday Night Futures
by Calculated Risk on 4/23/2023 06:43:00 PM
Weekend:
• Schedule for Week of April 23, 2023
Monday:
• At 8:30 AM ET, Chicago Fed National Activity Index for March. This is a composite index of other data.
• At 10:30 AM, Dallas Fed Survey of Manufacturing Activity for April.
From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 6 and DOW futures are down 44 (fair value).
Oil prices were down over the last week with WTI futures at $77.87 per barrel and Brent at $81.66 per barrel. A year ago, WTI was at $103, and Brent was at $105 - so WTI oil prices are down about 24% year-over-year.
Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.64 per gallon. A year ago, prices were at $4.09 per gallon, so gasoline prices are down $0.45 per gallon year-over-year.
The Normal Seasonal Pattern for Median House Prices
by Calculated Risk on 4/23/2023 10:37:00 AM
Last week, in the CalculatedRisk Real Estate Newsletter on March existing home sales, NAR: Existing-Home Sales Decreased to 4.44 million SAAR in March; Median Prices Declined 0.9% YoY, I noted that median prices were down year-over-year (median prices are distorted by the mix).
Seasonally prices typically peak in June (closed sales are mostly for contracts signed in April and May).
And seasonally prices usually bottom the following January (contracts signed in November and December).
The recent surge in prices started mid-year 2020 and ran through Q1 2022 when mortgage rates started increasing significantly.
The 2023 increase in median prices from January to March was about the same as in 2018 and 2019.
Here is a table of the seasonal percentage increases from January to March, and from March to June (the usual seasonal peak) over the last several years. The third row is the total percentage increase from January to June.
The last row shows the seasonal decline from June to December. Note: In 2019, prices only declined 3.8% in the 2nd half of the year as mortgage rates declined into the mid-3s (pre-pandemic low was 3.5% on a 30-year mortgage according to Freddie MAC PMMS).
In 2020, prices continued to increase in the 2nd half of the year and didn't peak seasonally until October. And prices only declined slightly in the 2nd half of 2021.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Jan to Mar | 3.7% | 4.1% | 5.4% | 7.5% | 7.1% | 4.0% |
| Mar to Jun | 9.6% | 9.9% | 4.9% | 12.4% | 9.1% | NA |
| Total Jan to Jun | 13.7% | 14.4% | 10.6% | 20.8% | 16.8% | NA |
| Jun to Dec | -7.0% | -3.8% | 5.0% | -2.2% | -11.4% | NA |
The 2023 increase in median prices from January to March was about the same as in 2018 and 2019.
Normally we'd expect median prices to increase 9% to 10% over the next three months, before declining in the 2nd half of the year. The seasonal pattern will be interesting this year.
Saturday, April 22, 2023
Real Estate Newsletter Articles this Week: "Most Multi-family Under Construction Since 1973"
by Calculated Risk on 4/22/2023 02:11:00 PM
At the Calculated Risk Real Estate Newsletter this week:
• NAR: Existing-Home Sales Decreased to 4.44 million SAAR in March; Median Prices Declined 0.9% YoY
• March Housing Starts: Most Multi-family Under Construction Since 1973
• Lawler on Demographics: New Population Estimates Incorporate Unprecedented Methodological Changes
• Why Measures of Existing Home Inventory appear Different
• 4th Look at Local Housing Markets: California Home Sales down 34% YoY in March; Prices Down 7.0% YoY
This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.
You can subscribe at https://calculatedrisk.substack.com/
Most content is available for free (and no Ads), but please subscribe!
Schedule for Week of April 23, 2023
by Calculated Risk on 4/22/2023 08:11:00 AM
The key reports scheduled for this week are the advance estimate of Q1 GDP and March New Home sales.
Other key reports include February Case-Shiller house prices and Personal Income and Outlays for March.
For manufacturing, the April Dallas, Richmond and Kansas City manufacturing surveys will be released.
8:30 AM ET: Chicago Fed National Activity Index for March. This is a composite index of other data.
10:30 AM: Dallas Fed Survey of Manufacturing Activity for April.
9:00 AM: S&P/Case-Shiller House Price Index for February.This graph shows the nominal 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 2.5% year-over-year increase in the Comp 20 index for February.
9:00 AM: FHFA House Price Index for February. This was originally a GSE only repeat sales, however there is also an expanded index.
10:00 AM: New Home Sales for March 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 630 thousand SAAR, down from 640 thousand in February.
10:00 AM: Richmond Fed Survey of Manufacturing Activity for April.
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
8:30 AM: Durable Goods Orders for March from the Census Bureau. The consensus is for a 0.9% increase in durable goods orders.
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 250 thousand initial claims, up from 245 thousand last week.
8:30 AM: Gross Domestic Product, 1st quarter 2023 (Advance estimate). The consensus is that real GDP increased 2.0% annualized in Q1, down from 2.6% in Q4.
10:00 AM: Pending Home Sales Index for March. The consensus is for a 1.0% increase in the index.
11:00 AM: the Kansas City Fed manufacturing survey for April. This is the last of regional manufacturing surveys for April.
8:30 AM ET: Personal Income and Outlays, March 2023. The consensus is for a 0.2% increase in personal income, and for a 0.1% decrease in personal spending. And for the Core PCE price index to increase 0.3%. PCE prices are expected to be up 4.1% YoY, and core PCE prices up 4.5% YoY.
9:45 AM: Chicago Purchasing Managers Index for April. The consensus is for a reading of 43.5, down from 43.8 in March.
10:00 AM: University of Michigan's Consumer sentiment index (Final for April). The consensus is for a reading of 63.5.
Friday, April 21, 2023
COVID Apr 21, 2023: Update on Cases, Hospitalizations and Deaths
by Calculated Risk on 4/21/2023 09:00:00 PM
Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.
On COVID (focus on hospitalizations and deaths). Data is now weekly.
After the first few weeks, the pandemic low for weekly deaths had been the week of July 7, 2021, at 1,690 deaths (until recently).
For cases, the low was 82,186 (getting close).
For COVID hospitalizations, the low was 9,821 (also getting close).
| COVID Metrics | ||||
|---|---|---|---|---|
| Now | Week Ago | Goal | ||
| New Cases per Week2 | 94,142 | 101,598 | ≤35,0001 | |
| Hospitalized2 | 11,097 | 12,418 | ≤3,0001 | |
| Deaths per Week2 | 1,160 | 1,333 | ≤3501 | |
| 1my goals to stop weekly posts, 2Weekly for Cases, Currently Hospitalized, and Deaths 🚩 Increasing number weekly for Cases, Hospitalized, and Deaths ✅ Goal met. | ||||
Click on graph for larger image.This graph shows the weekly (columns) number of deaths reported.
Weekly deaths decreased this week and set a new pandemic low of 1,160 deaths in the most recent week.
Q1 GDP Tracking: Around 2%
by Calculated Risk on 4/21/2023 01:31:00 PM
The advance estimate of Q1 GDP will be released this coming Thursday, April 27th. The consensus is that real GDP increased 2.0% annualized in Q1, down from 2.6% in Q4.
From BofA:
On net, the data lowered our tracking estimate a tenth to 1.5% q/q saar. ... Our tracking estimate for personal consumption expenditures (PCE) increased from 3.5% q/q saar to 4.0% q/q saar owing to slightly stronger than expected retail sales and a surge in utitilities production. [Apr 21st estimate]From Goldman:
emphasis added
We have left our Q1 GDP tracking estimate unchanged at +2.2% (qoq ar). Our domestic final sales growth forecast stands at +3.9%. [Apr 20th estimate]And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2023 is 2.5 percent on April 18, unchanged from April 14 after rounding. After this morning's housing starts report from the US Census Bureau, the nowcast of first-quarter real residential investment growth increased from -5.8 percent to -5.5 percent. [Apr 18th estimate]
