by Calculated Risk on 9/16/2023 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• Q2 Update: Delinquencies, Foreclosures and REO

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

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

• 3rd Look at Local Housing Markets in August

• 2nd Look at Local Housing Markets in August

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/

by Calculated Risk on 9/16/2023 08:11:00 AM

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

The FOMC meets this week and no change to policy is expected.

----- Monday, September 18th -----
10:00 AM: The September NAHB homebuilder survey. The consensus is for a reading of 50, unchanged from 50 in August. Any number above 50 indicates that more builders view sales conditions as good than poor.

----- Tuesday, September 19th -----
8:30 AM: Housing Starts for August.

This graph shows single and total housing starts since 1968.

The consensus is for 1.440 million SAAR, down from 1.452 million SAAR.

10:00 AM: State Employment and Unemployment (Monthly) for August 2023

----- Wednesday, September 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 August (a leading indicator for commercial real estate).

2:00 PM: FOMC Meeting Announcement. No change to policy is expected at this meeting.

2:00 PM: FOMC Forecasts This will include the Federal Open Market Committee (FOMC) participants' projections of the appropriate target federal funds rate along with the quarterly economic projections.

2:30 PM: Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.

----- Thursday, September 21st -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 224 thousand initial claims, up from 220 thousand last week.

8:30 AM: the Philly Fed manufacturing survey for September. The consensus is for a reading of 0.0, up from -12.0.

10:00 AM: Existing Home Sales for August from the National Association of Realtors (NAR). The consensus is for 4.10 million SAAR, up from 4.07 million in July.

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

Housing economist Tom Lawler expects the NAR to report 4.07 million SAAR.

----- Friday, September 22nd -----
No major economic releases scheduled.

by Calculated Risk on 9/15/2023 07:58:00 PM

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

Due to changes at the CDC, weekly cases are no longer updated.

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).  

Recently hospitalizations have almost tripled from a low of 5,150 in June 2023.

COVID Metrics
	Now	Week Ago	Goal
Hospitalized2🚩	14,489	12,984	≤3,0001
Deaths per Week2🚩	860	844	≤3501
1my goals to stop weekly posts, 2Weekly for Currently Hospitalized, and Deaths 🚩 Increasing number weekly for Hospitalized and Deaths ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported.

Weekly deaths have almost doubled from a low of 469 in early July.

For deaths, I'm currently using 3 weeks ago for "now", since the most recent two weeks will be revised significantly.

by Calculated Risk on 9/15/2023 03:04:00 PM

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

A brief excerpt:

Note: The National Association of Realtors (NAR) is scheduled to release August existing home sales next week on Thursday, September 21st, at 10:00 AM ET. The consensus is the NAR will report sales of 4.10 million SAAR, up from 4.07 million in July.

This is the third look at local markets in August. I’m tracking a sample of about 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 August were mostly for contracts signed in June and July. Since 30-year fixed mortgage rates were in the 6.7% range in June, and 6.8% in July, compared to the mid-5% range the previous year, closed sales were down year-over-year in August.
...
Here is a summary of active listings for these housing markets in August.

Inventory for these markets is down 4.7% YoY, a slightly smaller YoY decline than in July.
...
More local markets to come!

There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/

by Calculated Risk on 9/15/2023 11:15:00 AM

From BofA:

Overall, the data flow since our last report pushed our 3Q US GDP tracking down two-tenths to 2.9% q/q saar and 2Q is down two-tenths as well to 2.3%. [Sept 15th estimate]
emphasis added

From Goldman:

We boosted our Q3 GDP tracking estimate by one tenth to +3.2% (qoq ar) and our domestic final sales growth forecast by the same amount to +2.9%. [Sept 14th estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2023 is 4.9 percent on September 14, down from 5.6 percent on September 8. After recent releases from the US Census Bureau, the US Bureau of Labor Statistics, and the US Department of the Treasury's Bureau of the Fiscal Service, the nowcasts of third-quarter real personal consumption expenditures growth, third-quarter real gross private domestic investment growth, and third-quarter real government spending growth decreased from 4.0 percent, 11.7 percent, and 2.3 percent, respectively, to 3.5 percent, 10.6 percent, and 1.9 percent. [Sept 14th estimate]

by Calculated Risk on 9/15/2023 09:15:00 AM

From the Fed: Industrial Production and Capacity Utilization

Industrial production increased 0.4 percent in August, and manufacturing output inched up 0.1 percent. The August reading for manufacturing was held back by a drop of 5 percent in the output of motor vehicles and parts; factory output elsewhere rose 0.6 percent. The index for mining moved up 1.4 percent, and the index for utilities climbed 0.9 percent. At 103.5 percent of its 2017 average, total industrial production in August was 0.2 percent above its year-earlier level. Capacity utilization moved up to 79.7 percent in August, in line with its long-run (1972–2022) 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 79.7% is at the average from 1972 to 2022.  This was above 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 increased in August to 103.5. This is above the pre-pandemic level.

Industrial production was above consensus expectations, and the previous months were revised up.

by Calculated Risk on 9/14/2023 07:36:00 PM

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

Friday:
• At 8:30 AM ET, The New York Fed Empire State manufacturing survey for September. The consensus is for a reading of -10.7, up from -19.0.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for August. The consensus is for a 0.1% increase in Industrial Production, and for Capacity Utilization to be unchanged at 79.3%.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Preliminary for September).

by Calculated Risk on 9/14/2023 02:55:00 PM

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report from Hannah Jones: Weekly Housing Trends View — Data Week Ending Sep 9, 2023

• Active inventory declined, with for-sale homes lagging behind year ago levels by 5.1%. This past week marked the 12th consecutive decline in the number of homes actively for sale compared to the prior year, however the gap narrowed compared to the previous week’s -5.2% figure.

• New listings–a measure of sellers putting homes up for sale–were down again this week, by 7.1% from one year ago. For the past 62 weeks, there have been fewer newly listed homes compared to the same time one year ago. The annual gap has generally narrowed since late June as the data lapped last year’s lower listing trend. While the number of newly listed homes increased from July to August (which is not typical in this season), new home listings have declined as is typical in the first two weeks in September.

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

Inventory was down 5.1% year-over-year - this was the twelfth consecutive week with a YoY decrease following 58 consecutive weeks with a YoY increase in inventory.  

Inventory is still up from the record lows in the 2nd half of 2021 and early 2022, and it is unlikely we will see new record lows by this measure this year.

by Calculated Risk on 9/14/2023 12:00:00 PM

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

A brief excerpt:

Yesterday, in Part 1: Current State of the Housing Market; Overview for mid-September I reviewed home inventory and sales.
...
Most measures of house prices have shown an increase in prices over the last several months, and a key question I discussed in July is Will house prices decline further later this year? I will revisit this question soon.

Other measures of house prices suggest prices will be up YoY over the next few months in the Case-Shiller index. The NAR reported median prices were up 1.9% YoY in July, up from a 0.9% YoY decline in June. Black Knight reported prices were up 2.3% YoY in July to new all-time highs, and Freddie Mac reported house prices were up 2.9% YoY in July, up from 1.6% YoY in June - and also to new all-time highs.

Here is a comparison of year-over-year change in the FMHPI, median house prices from the NAR, and the Case-Shiller National index.

The FMHPI and the NAR median prices appear to be leading indicators for Case-Shiller. Based on recent monthly data, and the FMHPI, the YoY change in the Case-Shiller index will turn positive in the report for July.

There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/

by Calculated Risk on 9/14/2023 08:35:00 AM

On a monthly basis, retail sales were up 0.6% from July to August (seasonally adjusted), and sales were up 2.5 percent from August 2022.

From the Census Bureau report:

Advance estimates of U.S. retail and food services sales for August 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $697.6 billion, up 0.6 percent from the previous month, and up 2.5 percent (±0.7 percent) above August 2022. ... The June 2023 to July 2023 percent change was revised from up 0.7 percent to up 0.5 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 were up 0.2% in August.

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 3.8% on a YoY basis.

The increase in sales in August was well above expectations, however, sales in June and July were revised down.