by Calculated Risk on 2/10/2025 07:17:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Microscopically Lower to Start New Week

Mortgage rates have been on a vacation from volatility since January 16th when they fell back toward 7% after hitting the highest levels since May 2024. Top tier 30yr fixed rates have operated inside a 0.13% range since then and a narrower 0.08% range for the past 2 weeks. ... on Wednesday, volatility potential increases significantly with the release of the Consumer Price Index (CPI), which is the first of the two big inflation readings for any given month. Inflation is always a consideration for interest rates, but it's particularly important at the moment as investors wait for evidence that progress toward the 2% has resumed after potentially stalling at just over 3% last summer. [30 year fixed 7.01%]
emphasis added

Tuesday:
• At 6:00 AM ET, NFIB Small Business Optimism Index for January.

• At 10:00 AM, Testimony, Fed Chair Jerome Powell, Semiannual Monetary Policy Report to Congress, Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs

Weekly Schedule

by Calculated Risk on 2/10/2025 03:01:00 PM

Note: I've received a number of requests to post this again at the conclusion of President Biden's term.  So here is another update of tracking employment during Presidential terms.  We frequently use Presidential terms as time markers - we could use Speaker of the House, Fed Chair, or any other marker.

Important: There are many differences between these periods. Overall employment was smaller in the '80s, however the participation rate was increasing in the '80s (younger population and women joining the labor force), and the participation rate is generally declining now.  But these graphs give an overview of employment changes.

The first graph shows the change in private sector payroll jobs from when each president took office until the end of their term(s). Presidents Carter, George H.W. Bush, and Trump only served one term.

Mr. G.W. Bush (red) took office following the bursting of the stock market bubble and left during the bursting of the housing bubble. Mr. Obama (dark blue) took office during the financial crisis and great recession. There was also a significant recession in the early '80s right after Mr. Reagan (dark red) took office.

There was a recession towards the end of President G.H.W. Bush (light purple) term, and Mr. Clinton (light blue) served for eight years without a recession.   There was a pandemic related recession in 2020.

First, here is a table for private sector jobs. The previous top two private sector terms were both under President Clinton.  

Term	Private Sector Jobs Added (000s)
Biden	14,3451
Clinton 1	10,875
Clinton 2	10,104
Obama 2	9,924
Reagan 2	9,351
Carter	9,039
Reagan 1	5,363
Obama 1	1,889
GHW Bush	1,507
GW Bush 2	453
GW Bush 1	-822
Trump	-2,178
1End of Term

Click on graph for larger image.

The first graph is for private employment only.

Private sector employment increased by 9,039,000 under President Carter (dashed green), by 14,714,000 under President Reagan (dark red), 1,507,000 under President G.H.W. Bush (light purple), 20,979,000 under President Clinton (light blue), lost 369,000 under President G.W. Bush, and gained 11,813,000 under President Obama (dark dashed blue).  During Trump's first term (Orange), the economy lost 2,178,000 private sector jobs.

 A big difference between the presidencies has been public sector employment.  Note: the bumps in public sector employment due to the decennial Census in 1980, 1990, 2000, 2010 and 2020. 

The public sector grew during Mr. Carter's term (up 1,304,000), during Mr. Reagan's terms (up 1,414,000), during Mr. G.H.W. Bush's term (up 1,127,000), during Mr. Clinton's terms (up 1,934,000), and during Mr. G.W. Bush's terms (up 1,744,000 jobs).  However, the public sector declined significantly while Mr. Obama was in office (down 263,000 jobs).  During Trump's term, the economy lost 537,000 public sector jobs (mostly teachers during the pandemic).

And a table for public sector jobs. Public sector jobs increased have increased the most during Biden's term (mostly state and local employment), ahead of the number during Reagan's 2nd term.  Public sector jobs declined the most during Obama's first term.

Term	Public Sector Jobs Added (000s)
Biden	1,8111
Reagan 2	1,438
Carter	1,304
Clinton 2	1,242
GHW Bush	1,127
GW Bush 1	900
GW Bush 2	844
Clinton 1	692
Obama 2	447
Reagan 1	-24
Trump	-537
Obama 1	-710
1End of Term

by Calculated Risk on 2/10/2025 12:19:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-February 2025

A brief excerpt:

This 2-part overview for mid-February 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 25.1% 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 has increased seasonally over the Winter as existing homes are withdrawn from the market.

There is much more in the article.

by Calculated Risk on 2/10/2025 08:11:00 AM

Altos reports that active single-family inventory was down 0.4% week-over-week.

Inventory always declines seasonally in the Winter and usually bottoms in late January or February. Inventory is now up 1.3% from the bottom four weeks ago. Inventory has been little changed over the last 4 weeks.

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 27.8% compared to the same week in 2024 (last week it was up 277%), and down 22.1% compared to the same week in 2019 (last week it was down 22.2%). 

Back in June 2023, inventory was down almost 54% compared to 2019, so the gap to more normal inventory levels has closed significantly!

This second inventory graph is courtesy of Altos Research.

As of Feb 7th, inventory was at 632 thousand (7-day average), compared to 635 thousand the prior week. 

Mike Simonsen discusses this data regularly on Youtube

by Calculated Risk on 2/10/2025 12:01:00 AM

Weekend:
• Schedule for Week of February 9, 2025

Monday:
• No major economic releases scheduled.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 18 and DOW futures are up 88 (fair value).

Oil prices were down over the last week with WTI futures at $71.00 per barrel and Brent at $74.66 per barrel. A year ago, WTI was at $77, and Brent was at $83 - so WTI oil prices are down about 8% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.13 per gallon. A year ago, prices were at $3.18 per gallon, so gasoline prices are down $0.05 year-over-year.

by Calculated Risk on 2/09/2025 08:19:00 AM

From Dodge Data Analytics: Dodge Momentum Index Grows 6% in January

The Dodge Momentum Index (DMI), issued by Dodge Construction Network, grew 5.6% in January to 225.7 (2000=100) from the revised December reading of 213.6. Over the month, commercial planning increased 4.2% while institutional planning improved 8.7%.

“Nonresidential planning activity saw diversified growth in January, with every vertical experiencing positive momentum,” stated Sarah Martin, associate director of forecasting at Dodge Construction Network. “Uncertainty over fiscal policies, ongoing labor shortages and elevated construction costs will continue to be headwinds to the construction sector. However, further monetary easing and the sizable number of projects in planning should support construction spending in the back half of the year.”

On the commercial side, data center, traditional office building, and warehouse planning led this month’s gains. Education and healthcare planning, especially on the hospital side, supported the institutional portion. In January, the DMI was up 26% when compared to year-ago levels. The commercial segment was up 37% from January 2024, while the institutional segment was up 9% over the same period. The influence of data centers on the DMI this year remains substantial. If we remove all data center projects between 2023 and 2025, commercial planning would be up 13% from year-ago levels, and the entire DMI would be up 11%.
...
The DMI is a monthly measure of the value of nonresidential building projects going into planning, shown to lead construction spending for nonresidential buildings by a full year.
emphasis added

Click on graph for larger image.

This graph shows the Dodge Momentum Index since 2002. The index was at 225.7 in January, up from 213.6 the previous month.

According to Dodge, this index leads "construction spending for nonresidential buildings by a full year".  This index suggests a slowdown in early 2025, but a pickup in mid-2025.  

Commercial construction is typically a lagging economic indicator.

by Calculated Risk on 2/08/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• MBA: Mortgage Delinquencies Increased Slightly in Q4 2024

• Fannie and Freddie: Single Family Serious Delinquency Rates Increased in December

• Lawler: Revisions Almost Eliminate Household/Establishment Survey Employment Growth Gap

• 1st Look at Local Housing Markets in January

• Asking Rents Mostly Unchanged Year-over-year

• ICE Mortgage Monitor: “Lowest calendar year home price growth of any year since 2011”

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

by Calculated Risk on 2/08/2025 08:11:00 AM

The key reports this week are January CPI and Retail sales.

For manufacturing, the January Industrial Production report will be released this week.

Fed Chair Powell presents the Semiannual Monetary Policy Report to the Congress on Tuesday and Wednesday.

----- Monday, February 10th -----
No major economic releases scheduled.

----- Tuesday, February 11th -----
6:00 AM: NFIB Small Business Optimism Index for January.

10:00 AM: Testimony, Fed Chair Jerome Powell, Semiannual Monetary Policy Report to Congress, Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs

----- Wednesday, February 12th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index.

8:30 AM: The Consumer Price Index for January from the BLS. The consensus is for 0.3% increase in CPI, and a 0.3% increase in core CPI.  The consensus is for CPI to be up 2.9% year-over-year and core CPI to be up 3.2% YoY.

10:00 AM: Testimony, Fed Chair Jerome Powell, Semiannual Monetary Policy Report to Congress, Before the U.S. House Financial Services Committee

----- Thursday, February 13th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for an increase to 224 thousand from 219 thousand last week.

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

11:00 AM: NY Fed: Q4 Quarterly Report on Household Debt and Credit

----- Friday, February 14th -----
8:30 AM: Retail sales for January is scheduled to be released.  The consensus is for a no change in retail sales.

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

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for January.

This graph shows industrial production since 1967.

The consensus is for a 0.3% increase in Industrial Production, and for Capacity Utilization to increase to 77.7%.

by Calculated Risk on 2/07/2025 07:20:00 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🚩	940	819	≤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 since Jan 2023.

Although weekly deaths met the original goal to stop posting, I'm continuing to post now that deaths are above the goal again - and at a minimum, I'll continue to post through the Winter.  

Weekly deaths have been increasing, and weekly deaths are triple the low of 313 in early June 2024.

And here is a graph I'm following concerning COVID in wastewater as of February 6th:

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

Nationally COVID in wastewater is "High" according to the CDC.   

by Calculated Risk on 2/07/2025 04:15:00 PM

From Manheim Consulting today: Wholesale Used-Vehicle Prices Increased in January

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) moved 0.4% higher in January compared to December, causing the Manheim Used Vehicle Value Index (MUVVI) to increase to 205.6, a gain of 0.8% from a year ago. The seasonal adjustment to the index muted the movement for the month, as non-seasonally adjusted values rose faster than seasonally adjusted values. The non-adjusted price in January increased by 0.6% compared to December, moving the unadjusted average price up 1.1% year over year.
emphasis added

Click on graph for larger image.

This index from Manheim Consulting is based on all completed sales transactions at Manheim’s U.S. auctions.

The Manheim index suggests used car prices increased in January (seasonally adjusted) and were up 0.8% YoY.