RSS Feed by Calculated Risk on 9/23/2021 09:36:00 PM
Thursday, September 23, 2021
September 23rd COVID-19: 55% of Americans Fully Vaccinated
The CDC is the source for all data.
According to the CDC, on Vaccinations. Total doses administered: 387,821,704, as of a week ago 383,038,403, or 0.68 million doses per day.
| COVID Metrics | ||||
|---|---|---|---|---|
| Today | Week Ago | Goal | ||
| Percent fully Vaccinated | 55.0% | 54.2% | ≥70.0%1 | |
| Fully Vaccinated (millions) | 182.6 | 180.1 | ≥2321 | |
| New Cases per Day3 | 121,532 | 146,684 | ≤5,0002 | |
| Hospitalized3 | 81,373 | 90,243 | ≤3,0002 | |
| Deaths per Day3🚩 | 1,556 | 1,545 | ≤502 | |
| 1 Minimum to achieve "herd immunity" (estimated between 70% and 85%). 2my goals to stop daily posts, 37 day average for Cases, Currently Hospitalized, and Deaths 🚩 Increasing 7 day average week-over-week for Cases, Hospitalized, and Deaths ✅ Goal met. | ||||
IMPORTANT: For "herd immunity" most experts believe we need 70% to 85% of the total population fully vaccinated (or already had COVID).
KUDOS to the residents of the 12 states that have achieved 60% of total population fully vaccinated: Vermont at 69.1%, Massachusetts, Maine, Connecticut, Rhode Island, Maryland. New Jersey, Washington, New York, New Mexico, New Hampshire and Oregon at 60.2%.
The following 20 states and D.C. have between 50% and 59.9% fully vaccinated: Virginia at 59.8%, District of Columbia, Colorado, California, Minnesota, Hawaii, Delaware, Pennsylvania, Wisconsin, Florida, Nebraska, Iowa, Illinois, Michigan, South Dakota, Kentucky, Arizona, Kansas, Texas, Nevada, and Utah at 50.0%.
Next up (total population, fully vaccinated according to CDC) are Ohio at 49.8%, Alaska at 49.7%, North Carolina 49.0% and Montana at 48.1%.
Click on graph for larger image.This graph shows the daily (columns) and 7 day average (line) of positive tests reported.
Existing Home Sales: Some Regional Differences Appear
by Calculated Risk on 9/23/2021 04:26:00 PM
In the Newsletter I have Existing Home Sales: Some Regional Differences Appear
Excerpt:
For the last year, most housing markets moved together with rapidly falling inventory and sharply increasing house prices. However, in August, about half of these markets saw a month-over-month (MoM) increase in inventory - and the other half saw a decrease - so we might be seeing some regional divergence.
Hotels: Occupancy Rate Down 11.6% Compared to Same Week in 2019
by Calculated Risk on 9/23/2021 01:38:00 PM
Note: The year-over-year occupancy comparisons are easy, since occupancy declined sharply at the onset of the pandemic.
From CoStar: STR: US Hotels Achieve Four-Week Occupancy High
U.S. hotel occupancy reached a four-week high, according to STR‘s latest data through September 18.The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.
September 12-18, 2021 (percentage change from comparable week in 2019*):
• Occupancy: 63.0% (-11.6%)
• verage daily rate (ADR): $131.04 (-2.6%)
• Revenue per available room (RevPAR): $82.50 (-13.9%)
The gain in occupancy was helped by weekly group demand eclipsing 1 million for the first time since the earliest days of the pandemic. More group demand created a lowering effect on ADR, as group rooms for upper-tier classes are typically priced lower than transient rooms.
emphasis added
Click on graph for larger image.The red line is for 2021, black is 2020, blue is the median, dashed purple is 2019, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020).
Note: Y-axis doesn't start at zero to better show the seasonal change.
With solid leisure travel, the Summer months had decent occupancy - but it is uncertain what will happen in the Fall with business travel - usually weekly occupancy increases to around 70% in the weeks following Labor Day due to renewed business travel.
Fed's Flow of Funds: Household Net Worth Increased $5.9 Trillion in Q2
by Calculated Risk on 9/23/2021 12:28:00 PM
The Federal Reserve released the Q2 2021 Flow of Funds report today: Financial Accounts of the United States.
The net worth of households and nonprofits rose to $141.7 trillion during the second quarter of 2021. The value of directly and indirectly held corporate equities increased $3.5 trillion and the value of real estate increased $1.2 trillion.
...
Household debt increased 7.9 percent at an annual rate in the second quarter of 2021. Consumer credit grew at an annual rate of 8.6 percent, while mortgage debt (excluding charge-offs) grew at an annual rate of 8 percent.
Click on graph for larger image.The first graph shows Households and Nonprofit net worth as a percent of GDP.
With the sharp decline in GDP in Q2 2020, net worth as a percent of GDP increased sharply. This reversed somewhat in Q3 as GDP bounced back (even as net worth increased). But now net worth as a percent of GDP is at an all time high.
This includes real estate and financial assets (stocks, bonds, pension reserves, deposits, etc) net of liabilities (mostly mortgages). Note that this does NOT include public debt obligations.
This graph shows homeowner percent equity since 1952.
Household percent equity (as measured by the Fed) collapsed when house prices fell sharply in 2007 and 2008.
In Q2 2021, household percent equity (of household real estate) was at 67.7% - up from 67.3% in Q1. This is the highest percent equity since the 1980s.
Note: about 30.3% of owner occupied households had no mortgage debt as of April 2010. So the approximately 50+ million households with mortgages have less than 67.7% equity - and about 1.2 million homeowners still have negative equity.
The third graph shows household real estate assets and mortgage debt as a percent of GDP. Note this graph was impacted by the sharp decline in Q2 2020 GDP.
Mortgage debt increased by $222 billion in Q2. This is the largest quarterly increase in mortgage debt since 2006.
Mortgage debt is up $573 billion from the peak during the housing bubble, but, as a percent of GDP is at 49.6% - down from Q1 - and down from a peak of 73.3% of GDP during the housing bubble.
The value of real estate, as a percent of GDP, increased in Q2, and is well above the average of the last 30 years.
This graph shows homeowner percent equity since 1952. Household percent equity (as measured by the Fed) collapsed when house prices fell sharply in 2007 and 2008.
In Q2 2021, household percent equity (of household real estate) was at 67.7% - up from 67.3% in Q1. This is the highest percent equity since the 1980s.
Note: about 30.3% of owner occupied households had no mortgage debt as of April 2010. So the approximately 50+ million households with mortgages have less than 67.7% equity - and about 1.2 million homeowners still have negative equity.
The third graph shows household real estate assets and mortgage debt as a percent of GDP. Note this graph was impacted by the sharp decline in Q2 2020 GDP.Mortgage debt increased by $222 billion in Q2. This is the largest quarterly increase in mortgage debt since 2006.
Mortgage debt is up $573 billion from the peak during the housing bubble, but, as a percent of GDP is at 49.6% - down from Q1 - and down from a peak of 73.3% of GDP during the housing bubble.
The value of real estate, as a percent of GDP, increased in Q2, and is well above the average of the last 30 years.
CoreLogic: 1.2 Million Homes with Negative Equity in Q2 2021
by Calculated Risk on 9/23/2021 09:33:00 AM
From CoreLogic: Homeowners Gained $2.9 Trillion in Equity in Q2 2021, CoreLogic Reports
CoreLogic® ... today released the Homeowner Equity Report for the second quarter of 2021. The report shows U.S. homeowners with mortgages (which account for roughly 63% of all properties) have seen their equity increase by 29.3% year over year, representing a collective equity gain of over $2.9 trillion, and an average gain of $51,500 per borrower, since the second quarter of 2020.
...
“The growth in homeowner equity provides a strong financial cushion for tens of millions Americans. For those most impacted by the pandemic, equity gains will help play a critical role in staving off foreclosure,” said Frank Martell, president and CEO of CoreLogic. “Based on projected increases in economic activity and home values over the next year, we expect to see further gains in equity and a corresponding drop in negative equity, forbearance rates and foreclosure.”
...
Negative equity, also referred to as underwater or upside down mortgages, applies to borrowers who owe more on their mortgages than their homes are currently worth. As of the second quarter of 2021, negative equity share, and the quarter-over-quarter and year-over-year changes, were as follows:
• Quarterly change: From the first quarter of 2021 to the second quarter of 2021, the total number of mortgaged homes in negative equity decreased by 12% to 1.2 million homes, or 2.3% of all mortgaged properties.
• Annual change: In the second quarter of 2020, 1.8 million homes, or 3.3% of all mortgaged properties, were in negative equity. This number decreased by 30%, or 520,000 properties, in the second quarter of 2021.
• The national aggregate value of negative equity was approximately $268 billion at the end of the second quarter of 2021. This is down quarter over quarter by approximately $5.2 billion, or 1.9%, from $273.2 billion in the first quarter of 2021, and down year over year by approximately $18.9 billion, or 6.6%, from $286.8 billion in the second quarter of 2020.
emphasis added
Click on graph for larger image.This graph from CoreLogic compares Q2 to Q1 2021 equity distribution by LTV. There are a few properties with LTV over 125%. But most homeowners have a significant amount of equity. This is a very different picture than at the start of the housing bust when many homeowners had little equity.
On a year-over-year basis, the number of homeowners with negative equity has declined from 1.8 million to 1.2 million.
Weekly Initial Unemployment Claims increase to 351,000
by Calculated Risk on 9/23/2021 08:41:00 AM
The DOL reported:
In the week ending September 18, the advance figure for seasonally adjusted initial claims was 351,000, an increase of 16,000 from the previous week's revised level. The previous week's level was revised up by 3,000 from 332,000 to 335,000. The 4-week moving average was 335,750, a decrease of 750 from the previous week's revised average. The previous week's average was revised up by 750 from 335,750 to 336,500.The following graph shows the 4-week moving average of weekly claims since 1971.
emphasis added
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 335,750.
The previous week was revised up.
Regular state continued claims increased to 2,845,000 (SA) from 2,714,000 (SA) the previous week.
Note (released with a 2 week delay): There were an additional 4,896,125 receiving Pandemic Unemployment Assistance (PUA) that decreased from 5,487,233 the previous week (there are questions about these numbers). This was a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance. And threre were an additional 3,644,555 receiving Pandemic Emergency Unemployment Compensation (PEUC) down from 3,805,795.
Weekly claims were higher than the consensus forecast.
Wednesday, September 22, 2021
Thursday: Unemployment Claims, Q2 Flow of Funds
by Calculated Risk on 9/22/2021 09:00:00 PM
Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 320 thousand initial claims, down from 332 thousand last week.
• Also at 8:30 AM, Chicago Fed National Activity Index for August. This is a composite index of other data.
• At 11:00 AM, the Kansas City Fed manufacturing survey for September.
• At 12:00 PM, Q2 Flow of Funds Accounts of the United States from the Federal Reserve.
September 22nd COVID-19: 7-Day Average New Cases Off 20% from Recent High
by Calculated Risk on 9/22/2021 06:14:00 PM
The CDC is the source for all data.
According to the CDC, on Vaccinations. Total doses administered: 387,493,716, as of a week ago 382,294,795, or 0.74 million doses per day.
| COVID Metrics | ||||
|---|---|---|---|---|
| Today | Week Ago | Goal | ||
| Percent fully Vaccinated | 54.9% | 54.1% | ≥70.0%1 | |
| Fully Vaccinated (millions) | 182.4 | 179.7 | ≥2321 | |
| New Cases per Day3 | 127,655 | 147,804 | ≤5,0002 | |
| Hospitalized3 | 82,870 | 91,282 | ≤3,0002 | |
| Deaths per Day3🚩 | 1,513 | 1,470 | ≤502 | |
| 1 Minimum to achieve "herd immunity" (estimated between 70% and 85%). 2my goals to stop daily posts, 37 day average for Cases, Currently Hospitalized, and Deaths 🚩 Increasing 7 day average week-over-week for Cases, Hospitalized, and Deaths ✅ Goal met. | ||||
IMPORTANT: For "herd immunity" most experts believe we need 70% to 85% of the total population fully vaccinated (or already had COVID).
KUDOS to the residents of the 12 states that have achieved 60% of total population fully vaccinated: Vermont at 69.1%, Massachusetts, Maine, Connecticut, Rhode Island, Maryland. New Jersey, Washington, New York, New Mexico, New Hampshire and Oregon at 60.1%.
The following 19 states and D.C. have between 50% and 59.9% fully vaccinated: Virginia at 59.8%, District of Columbia, Colorado, California, Minnesota, Hawaii, Delaware, Pennsylvania, Wisconsin, Florida, Nebraska, Iowa, Illinois, Michigan, South Dakota, Kentucky, Arizona, Kansas and Texas, and Nevada at 50.1%.
Next up (total population, fully vaccinated according to CDC) are Utah at 49.9%, Ohio at 49.7%, Alaska at 49.5%, North Carolina 48.9% and Montana at 48.0%.
Click on graph for larger image.This graph shows the daily (columns) and 7 day average (line) of positive tests reported.
Black Knight: National Mortgage Delinquency Rate Decreased in August
by Calculated Risk on 9/22/2021 04:34:00 PM
Note: At the beginning of the pandemic, the delinquency rate increased sharply (see table below). Loans in forbearance are counted as delinquent in this survey, but those loans are not reported as delinquent to the credit bureaus.
From Black Knight: Black Knight: With Moratoria Lifted, Foreclosure Starts Edge Higher, But Still 80% Below Pre-Pandemic Levels; Delinquency Rate Falls to 4% For First Time Since Early 2020
• The national delinquency rate on first lien mortgages fell to 4.00% in August, the lowest it’s been since pandemic-related impacts caused mortgage delinquencies to spike in early 2020According to Black Knight's First Look report, the percent of loans delinquent decreased 3.5% in August compared to July, and decreased 42% year-over-year.
• Serious delinquencies – including those in active forbearance – fell by 108,000 from July and, though down by more than 1 million from last August, are still roughly 930,000 above pre-pandemic levels
• August’s 7,100 foreclosure starts represented the largest such volume in eight months after foreclosure moratoria on federally backed loans were lifted at the end of July
• Despite the increase – which was driven primarily by restarting the process on loans that had been in foreclosure prior to the moratoria – start volumes remain 80% below August 2019 levels
• Though the number of loans in active foreclosure saw the first monthly rise of 2021 (+2,000), volumes remain near record lows and are still down 44% (-97,000) from pre-pandemic levels
• Prepayment activity rose by nearly 9% in the month with interest rates – which have held below 3% in recent months – continuing to spur both refinance and purchase activity
emphasis added
The percent of loans in the foreclosure process increased 1.7% in August and were down 24% over the last year.
Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 4.00% in August, down from 4.14% in July.
The percent of loans in the foreclosure process increased in August to 0.27%, from 0.26% in July.
The number of delinquent properties, but not in foreclosure, is down 1,557,000 properties year-over-year, and the number of properties in the foreclosure process is down 45,000 properties year-over-year.
| Black Knight: Percent Loans Delinquent and in Foreclosure Process | ||||
|---|---|---|---|---|
| Aug 2021 | July 2021 | Aug 2020 | Aug 2019 | |
| Delinquent | 4.00% | 4.14% | 6.88% | 3.45% |
| In Foreclosure | 0.27% | 0.26% | 0.35% | 0.48% |
| Number of properties: | ||||
| Number of properties that are delinquent, but not in foreclosure: | 2,122,000 | 2,206,000 | 3,679,000 | 1,818,000 |
| Number of properties in foreclosure pre-sale inventory: | 142,000 | 140,000 | 187,000 | 253,000 |
| Total Properties | 2,264,000 | 2,346,000 | 3,867,000 | 2,066,000 |
FOMC Projections and Press Conference
by Calculated Risk on 9/22/2021 02:11:00 PM
Statement here.
Fed Chair Powell press conference video here starting at 2:30 PM ET.
Here are the projections. In June, most participants expected around two rate hikes in 2023. Now, about half of participants expect one rates hike in 2022.
Wall Street forecasts were for GDP to increase at a 8.6% annual rate in Q2 (came in at 6.6%) and forecasts for Q3 have been downgraded recently.
So GDP was revised down for 2021.
1 Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.
The unemployment rate was at 5.2% in August.
| GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1 | ||||
|---|---|---|---|---|
| Projection Date | 2021 | 2022 | 2023 | 2024 |
| Sept 2021 | 5.8 to 6.0 | 3.4 to 4.5 | 2.2 to 2.5 | 2.0 to 2.2 |
| June 2021 | 6.8 to 7.3 | 2.8 to 3.8 | 2.0 to 2.5 | |
The unemployment rate was at 5.2% in August.
Note that the unemployment rate doesn't capture the economic damage to the labor market. Not only are there 2.7 million more people currently unemployed than prior to the pandemic, over 2.9 million people have left the labor force since February 2020. And millions more were being supported by various provisions of the disaster relief acts.
The unemployment rate was revised up slightly for 2021.
2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.
As of July 2021, PCE inflation was up 4.2% from July 2020.
The projections for inflation were revised up and the FOMC sees inflation solidly above target in 2021.
PCE core inflation was up 3.6% in July year-over-year.
Projections for core inflation were revised up.
The unemployment rate was revised up slightly for 2021.
| Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2 | ||||
|---|---|---|---|---|
| Projection Date | 2021 | 2022 | 2023 | 2024 |
| Sept 2021 | 4.6 to 4.8 | 3.6 to 4.0 | 3.3 to 3.7 | 3.3 to 3.6 |
| June 2021 | 4.4 to 4.8 | 3.5 to 4.0 | 3.2 to 3.8 | |
As of July 2021, PCE inflation was up 4.2% from July 2020.
The projections for inflation were revised up and the FOMC sees inflation solidly above target in 2021.
| Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1 | ||||
|---|---|---|---|---|
| Projection Date | 2021 | 2022 | 2023 | 2024 |
| Sept 2021 | 4.0 to 4.3 | 2.0 to 2.5 | 2.0 to 2.3 | 2.0 to 2.2 |
| June 2021 | 3.1 to 3.5 | 1.9 to 2.3 | 2.0 to 2.2 | |
PCE core inflation was up 3.6% in July year-over-year.
Projections for core inflation were revised up.
| Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1 | ||||
|---|---|---|---|---|
| Projection Date | 2021 | 2022 | 2023 | 2024 |
| Sept 2021 | 3.6 to 3.8 | 2.0 to 2.5 | 2.0 to 2.3 | 2.0 to 2.2 |
| June 2021 | 2.9 to 3.1 | 1.9 to 2.3 | 2.0 to 2.2 | |
FOMC Statement: No Policy Change; Taper "May soon be warranted"
by Calculated Risk on 9/22/2021 02:04:00 PM
The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.
With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months, but the rise in COVID-19 cases has slowed their recovery. Inflation is elevated, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.
The path of the economy continues to depend on the course of the virus. Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation having run persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. Last December, the Committee indicated that it would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward its maximum employment and price stability goals. Since then, the economy has made progress toward these goals. If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller.
emphasis added
AIA: "Architecture billings continue to increase" in August
by Calculated Risk on 9/22/2021 12:14:00 PM
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: Architecture billings continue to increase
The Architecture Billings Index (ABI) recorded its seventh consecutive positive month, according to a new report today from The American Institute of Architects (AIA).
The ABI score for August was 55.6, up from July’s score of 54.6. Any score above 50 indicates an increase in billings from the prior month. During August, scoring for both the new project inquiries and design contracts moderated slightly but remained in positive territory, posting scores of 64.7 and 56.6 respectively.
“The surge in design activity continued in August, signifying an expected upturn in construction activity in the fourth quarter and continuing into 2022,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “This expected expansion will magnify the already serious problems of price inflation and availability of many construction products and materials, as well as the emerging labor shortages in the industry.”
...
• Regional averages: West (57.2); Midwest (55.2); South (52.5); Northeast (51.7)
• Sector index breakdown: mixed practice (56.0); commercial/industrial (54.7); institutional (54.4); multi-family residential (54.3)
emphasis added
Click on graph for larger image.This graph shows the Architecture Billings Index since 1996. The index was at 55.6 in August, up from 54.6 in July. Anything above 50 indicates expansion in demand for architects' services.
Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.
This index had been below 50 for eleven consecutive months, but has been solidly positive for the last seven months.
The eleven months of decline represented a significant decrease in design services, and suggests a decline in CRE investment through most of 2021 (This index usually leads CRE investment by 9 to 12 months), however we might see a pickup in CRE investment towards the end of the 2021 and into 2022.
Comments on August Existing Home Sales
by Calculated Risk on 9/22/2021 10:40:00 AM
In the Newsletter I have additional comments on August existing home sales.
This was the first month this year with sales down year-over-year. This should continue through the rest of the year, since sales averaged 6.6 million SAAR over the last four months of 2020.
NAR: Existing-Home Sales Decreased to 5.88 million in August
by Calculated Risk on 9/22/2021 10:11:00 AM
From the NAR: Existing-Home Sales Recede 2.0% in August
Existing-home sales retreated in August, breaking two straight months of increases, according to the National Association of Realtors®. Each of the four major U.S. regions experienced declines on both a month-over-month and a year-over-year perspective.
Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 2.0% from July to a seasonally adjusted annual rate of 5.88 million in August. Year-over-year, sales dropped 1.5% from a year ago (5.97 million in August 2020).
...
Total housing inventory at the end of August totaled 1.29 million units, down 1.5% from July's supply and down 13.4% from one year ago (1.49 million). Unsold inventory sits at a 2.6-month supply at the current sales pace, unchanged from July but down from 3.0 months in August 2020.
emphasis added
Click on graph for larger image.This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.
Sales in August (5.88 million SAAR) were down 2.0% from last month, and were 1.5% below the August 2020 sales rate.
The second graph shows nationwide inventory for existing homes.
According to the NAR, inventory decreased to 1.29 million in August from 1.31 million in July.Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.
The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.
Inventory was down 13.4% year-over-year in August compared to August 2020.
Months of supply was unchanged at 2.6 months in August from 2.6 months in July.
This was slightly above the consensus forecast. I'll have more later.
The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.
Inventory was down 13.4% year-over-year in August compared to August 2020. Months of supply was unchanged at 2.6 months in August from 2.6 months in July.
This was slightly above the consensus forecast. I'll have more later.
MBA: Mortgage Applications Increase in Latest Weekly Survey
by Calculated Risk on 9/22/2021 07:00:00 AM
From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey
Mortgage applications increased 4.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 17, 2021. The previous week’s results included an adjustment for the Labor Day holiday.
... The Refinance Index increased 7 percent from the previous week and was 5 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 12 percent compared with the previous week and was 13 percent lower than the same week one year ago.
“There was a resurgence in mortgage applications the week after Labor Day, with activity overall at its highest level in over a month, and purchase applications jumping to a high last seen in April 2021,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Housing demand is strong heading into the fall, despite fast-rising home prices and low inventory. The inventory situation is improving, with more new homes under construction and more homeowners listing their home for sale. Despite this week’s increase, purchase applications were still 13 percent lower than the same week a year ago.”
Added Kan, “Homeowners acted while rates remained low at 3.03 percent. This week’s refinance gain of 7 percent was driven heavily by an increase in FHA and VA applications.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) remained unchanged at 3.03 percent, with points decreasing to 0.30 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added
Click on graph for larger image.The first graph shows the refinance index since 1990.
With low rates, the index remains elevated.
The second graph shows the MBA mortgage purchase index
According to the MBA, purchase activity is down 13% year-over-year unadjusted.Note: The year ago comparisons for the unadjusted purchase index are now difficult since purchase activity picked up in late May 2020.
Note: Red is a four-week average (blue is weekly).
Tuesday, September 21, 2021
Wednesday: Existing Home Sales, FOMC Announcement
by Calculated Risk on 9/21/2021 09:00:00 PM
Wednesday:
• At 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).
• At 10:00 AM, Existing Home Sales for August from the National Association of Realtors (NAR). The consensus is for 5.81 million SAAR, down from 5.99 million in July.
• At 2:00 PM, FOMC Meeting Announcement. See FOMC Preview: Tapering "Advance Notice" Likely
• At 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.
• At 2:30 PM, Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.
September 21st COVID-19: 7-day average deaths is the highest since February
by Calculated Risk on 9/21/2021 05:23:00 PM
The CDC is the source for all data.
The 7-day average deaths is the highest since February 27th.
According to the CDC, on Vaccinations. Total doses administered: 386,780,816, as of a week ago 381,453,265, or 0.76 million doses per day.
| COVID Metrics | ||||
|---|---|---|---|---|
| Today | Week Ago | Goal | ||
| Percent fully Vaccinated | 54.8% | 54.0% | ≥70.0%1 | |
| Fully Vaccinated (millions) | 182.0 | 179.3 | ≥2321 | |
| New Cases per Day3 | 130,916 | 141,314 | ≤5,0002 | |
| Hospitalized3 | 83,998 | 91,810 | ≤3,0002 | |
| Deaths per Day3🚩 | 1,533 | 1,361 | ≤502 | |
| 1 Minimum to achieve "herd immunity" (estimated between 70% and 85%). 2my goals to stop daily posts, 37 day average for Cases, Currently Hospitalized, and Deaths 🚩 Increasing 7 day average week-over-week for Cases, Hospitalized, and Deaths ✅ Goal met. | ||||
IMPORTANT: For "herd immunity" most experts believe we need 70% to 85% of the total population fully vaccinated (or already had COVID).
KUDOS to the residents of the 12 states that have achieved 60% of total population fully vaccinated: Vermont at 69.0%, Massachusetts, Maine, Connecticut, Rhode Island, Maryland. New Jersey, Washington, New York, New Mexico, New Hampshire and Oregon at 60.0%.
The following 19 states and D.C. have between 50% and 59.9% fully vaccinated: Virginia at 59.8%, District of Columbia, Colorado, California, Minnesota, Hawaii, Delaware, Pennsylvania, Wisconsin, Florida, Nebraska, Iowa, Illinois, Michigan, South Dakota, Kentucky, Arizona, Kansas and Texas, and Nevada at 50.0%.
Next up (total population, fully vaccinated according to CDC) are Utah at 49.8%, Ohio at 49.7%, Alaska at 49.3%, North Carolina 48.8% and Montana at 47.9%.
Click on graph for larger image.This graph shows the daily (columns) and 7 day average (line) of positive tests reported.
Prime Age Participation Rate
by Calculated Risk on 9/21/2021 03:22:00 PM
Here is an initial look at the prime age (25 to 54) participation rate.
The first graph shows the prime age participation rate since 1948.
Click on graph for larger image.
There are two clear long term trends:
1. The participation rate for prime age women increased significantly from around 34% in the '40s to around 77% in 2000 (and then started declining).
2. The participation rate for prime age men has gradually been decreasing, from close to 97% in the '40s to around 88% in 2014.
The second graphs show the trend since 2010.
The participation rate for both men and women appears to have bottomed around 2014, and then were impacted significantly by the pandemic in 2020.
Currently the participation rate for prime age women is 75.4%, and 88.4% for prime age men.
Some of increase in the second half of the last decade was probably due to a large cohort aging out of the "prime age". Even in the prime age (25 to 54), different cohorts have different participation rates, with the group in the 50 to 54 having the lowest participation rate. I'll look at an age adjusted graph soon.
Comments on August Housing Starts
by Calculated Risk on 9/21/2021 11:24:00 AM
In the Newsletter I have additional comments on August housing starts
Currently there are also 702 thousand multi-family units under construction. This is the highest level since 1974! For multi-family, construction delays are a factor. The completion of these units should help with rent pressure.
Housing Starts increased to 1.615 Million Annual Rate in August
by Calculated Risk on 9/21/2021 08:40:00 AM
From the Census Bureau: Permits, Starts and Completions
Housing Starts:
Privately‐owned housing starts in August were at a seasonally adjusted annual rate of 1,615,000. This is 3.9 percent above the revised July estimate of 1,554,000 and is 17.4 percent above the August 2020 rate of 1,376,000. Single‐family housing starts in August were at a rate of 1,076,000; this is 2.8 percent below the revised July figure of 1,107,000. The August rate for units in buildings with five units or more was 530,000
Building Permits:
Privately‐owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,728,000. This is 6.0 percent above the revised July rate of 1,630,000 and is 13.5 percent above the August 2020 rate of 1,522,000. Single‐family authorizations in August were at a rate of 1,054,000; this is 0.6 percent above the revised July figure of 1,048,000. Authorizations of units in buildings with five units or more were at a rate of 632,000 in August.
emphasis added
Click on graph for larger image.The first graph shows single and multi-family housing starts for the last several years.
Multi-family starts (red, 2+ units) increased in August compared to July. Multi-family starts were up 53% year-over-year in August.
Single-family starts (blue) decreased in August, and were up 5% year-over-year.
The second graph shows single and multi-family housing starts since 1968. The second graph shows the huge collapse following the housing bubble, and then the eventual recovery (but still not historically high).
Total housing starts in August were above expectations, and starts in June and July were revised up slightly.
I'll have more later …
