by Calculated Risk on 10/28/2021 04:29:00 PM

From the Las Vegas Visitor Authority: September 2021 Las Vegas Visitor Statistics

With stronger weekends but declines midweek vs. August 2021, September visitation saw some stabilization at approximately 2.9M visitors (down ‐2.1% MoM and down ‐15.5% from September 2019) after seeing sharper declines in August as the COVID Delta variant surged.

Hotel occupancy reached 73.0% for the month (up 0.2 pts MoM, down ‐15.3 pts vs. September 2019), as Weekend occupancy improved month‐over‐month to 89.1% (up 2.0 pts MoM) while Midweek occupancy declined from the prior month to 66.1% (down ‐1.7 pts MoM).

September room rates exceeded $155, the highest in the pandemic era, up 11.0% MoM and up 13.6% vs. September 2019 as RevPAR came in at $113.73, up 11.3% MoM and down ‐6.1% vs. September 2019

Click on graph for larger image.

Thist graph shows visitor traffic for 2019 (blue), 2020 (orange) and 2021 (red).

Visitor traffic was down 15.5% compared to the same month in 2019.

There had been no convention traffic since March 2020, but there have been a few conventions since June 2021 (data not available yet).

I'll add a graph of convention traffic once convention data is available.

by Calculated Risk on 10/28/2021 04:07:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 417,795,537, as of a week ago 411,010,650, or 0.97 million doses per day.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	57.6%	57.2%	≥70.0%1
Fully Vaccinated (millions)	191.2	189.9	≥2321
New Cases per Day3	68,792	74,290	≤5,0002
Hospitalized3	45,513	51,175	≤3,0002
Deaths per Day3	1,129	1,246	≤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).  Note: COVID will probably stay endemic (at least for some time).

KUDOS to the residents of the 4 states that have achieved 70% of total population fully vaccinated: Vermont at 71.0%, Rhode Island, Connecticut, and Maine at 70.4% .

KUDOS also to the residents of the 12 states and D.C. that have achieved 60% of total population fully vaccinated: Massachusetts at 69.5%, New York, New Jersey, Maryland, New Mexico, New Hampshire, Washington, Oregon, Virginia, District of Columbia,  Colorado, California and Pennsylvania at 60.3%.

The following 20 states have between 50% and 59.9% fully vaccinated: Delaware at 59.7%, Minnesota, Hawaii, Florida, Wisconsin, Nebraska, Iowa, Illinois, Michigan, Kentucky, South Dakota, Texas, Arizona, Kansas, Nevada, Alaska, Utah, North Carolina, Ohio and Montana at 50.3%.

Next up (total population, fully vaccinated according to CDC) are Oklahoma at 49.8%, South Carolina at 49.8%, Indiana at 49.7%, Missouri at 49.6%, Georgia at 48.0%, and Arkansas at 47.8%.

Click on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

by Calculated Risk on 10/28/2021 12:58:00 PM

Note: Since occupancy declined sharply at the onset of the pandemic, CoStar is comparing to 2019.

From CoStar: STR: US Hotel Occupancy Drops, but Rates Increase Slightly

U.S. hotel occupancy dipped a percentage point week over week, while room rates rose slightly, according to STR‘s latest data through October 23.

October 17-23, 2021 (percentage change from comparable week in 2019*):

• Occupancy: 63.9% (-9.1%)
• Average daily rate (ADR): $134.14 (-0.6%)
• Revenue per available room (RevPAR): $85.74 (-9.6%)

*Due to the steep, pandemic-driven performance declines of 2020, STR is measuring recovery against comparable time periods from 2019.
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 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.

The Summer months had decent occupancy with solid leisure travel, and occupancy was only off about 7% in July and August compared to 2019.

Usually weekly occupancy increases to around 70% in the weeks following Labor Day due to renewed business travel.   However, this year, so far, business travel has been lighter than leisure travel in 2021.

by Calculated Risk on 10/28/2021 11:44:00 AM

Earlier from the BEA: Gross Domestic Product, Third Quarter 2021 (Advance Estimate)

Real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the third quarter of 2021, according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 6.7 percent.
emphasis added

On a Q3-over-Q3 basis, GDP was up 4.9%.

The advance Q2 GDP report, at 2.0% annualized, was below expectations, due to several factors - a sharp decline in Motor vehicles and parts (due to supply constraints), a decline in residential investment, a decline in government expenditures and a negative contribution from trade.

Personal consumption expenditures (PCE) increased at a 1.6% annualized rate in Q3, a much slower pace than the previous two quarters.

The graph below shows the contribution to GDP from residential investment, equipment and software, and nonresidential structures (3 quarter trailing average). This is important to follow because residential investment tends to lead the economy, equipment and software is generally coincident, and nonresidential structure investment trails the economy.

In the graph, red is residential, green is equipment and software, and blue is investment in non-residential structures. So the usual pattern - both into and out of recessions is - red, green, blue.

Of course - with the sudden economic stop due to COVID-19 - the usual pattern doesn't apply.

The dashed gray line is the contribution from the change in private inventories.

Click on graph for larger image.

Residential investment (RI) decreased at a 7.7% annual rate in Q3.  Equipment investment decreased at a 3.2% annual rate, and investment in non-residential structures decreased at a 7.3% annual rate (after getting crushed over the previous year)..

The contribution to Q3 GDP from investment in private inventories was 2.07 percentage points.

On a 3 quarter trailing average basis, RI (red) is down slightly, equipment (green) is up, and nonresidential structures (blue) is still down.

I'll post more on the components of non-residential investment once the supplemental data is released.

The second graph shows residential investment as a percent of GDP.

Residential Investment as a percent of GDP decreased in Q3.

I'll break down Residential Investment into components after the GDP details are released.

Note: Residential investment (RI) includes new single family structures, multifamily structures, home improvement, broker's commissions, and a few minor categories.

The third graph shows non-residential investment in structures, equipment and "intellectual property products".  

Investment in non-residential structures declined in Q3 as a percent GDP, but might pickup in early 2022.

by Calculated Risk on 10/28/2021 10:03:00 AM

From the NAR: Pending Home Sales Dip 2.3% in September

Pending home sales dipped in September, retreating slightly following a previous month of growth, according to the National Association of Realtors®. Each of the four major U.S. regions saw contract activity decline month-over-month and year-over-year, with the Northeast weathering the largest yearly drop.

The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, decreased 2.3% to 116.7 in September. Year-over-year, signings decreased 8.0%. An index of 100 is equal to the level of contract activity in 2001.
...
Month-over-month, the Northeast PHSI fell 3.2% to 93.1 in September, an 18.5% decline from a year ago. In the Midwest, the index dropped 3.5% to 111.4 last month, down 5.8% from September 2020.

Pending home sales transactions in the South decreased 1.8% to an index of 139.1 in September, down 5.8% from September 2020. The index in the West declined 1.4% in September to 105.3, down 7.2% from a year prior.
emphasis added

This was below expectations of a 0.5% increase for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in October and November.

by Calculated Risk on 10/28/2021 08:37:00 AM

The DOL reported:

In the week ending October 23, the advance figure for seasonally adjusted initial claims was 281,000, a decrease of 10,000 from the previous week's revised level. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The previous week's level was revised up by 1,000 from 290,000 to 291,000. The 4-week moving average was 299,250, a decrease of 20,750 from the previous week's revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week's average was revised up by 250 from 319,750 to 320,000.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

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 299,250.

The previous week was revised up.

Regular state continued claims decreased to 2,243,000 (SA) from 2,480,000 (SA) the previous week.

Weekly claims were below consensus forecast.

by Calculated Risk on 10/28/2021 08:33:00 AM

From the BEA: Gross Domestic Product, Third Quarter 2021 (Advance Estimate)

Real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the third quarter of 2021, according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 6.7 percent. ...

The increase in real GDP in the third quarter reflected increases in private inventory investment, personal consumption expenditures (PCE), state and local government spending, and nonresidential fixed investment that were partly offset by decreases in residential fixed investment, federal government spending, and exports. Imports, which are a subtraction in the calculation of GDP, increased.
emphasis added

The advance Q3 GDP report, with 2.0% annualized growth, was below expectations.

I'll have more later ...

by Calculated Risk on 10/27/2021 09:00:00 PM

Goldman Sachs lowered their estimate for Q3 GDP today:

"We lowered our Q3 GDP tracking estimate by ½pp to 2¾% (qoq ar) ahead of tomorrow’s advance release."

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for 295 thousand initial claims, up from 290 thousand last week.

• Also at 8:30 AM, Gross Domestic Product, 3rd quarter 2021 (advance estimate). The consensus is that real GDP increased 2.8% annualized in Q3, down from 6.7% in Q2.

• At 10:00 AM, Pending Home Sales Index for September. The consensus is 0.5% increase in the index.

• At 11:00 AM, Kansas City Fed Survey of Manufacturing Activity for October. This is the last of the regional surveys for October.

by Calculated Risk on 10/27/2021 03:47:00 PM

The headline below "No one seems worried ... Just like last time the bubble burst" applies to government officials in the Bush administration and at the Fed (although there was some concern at the Fed, notably from Dr. Janet Yellen). Plenty of private forecasters were expressing concern in 2005 like Dean Baker (for example, see my post Speculation is the Key in early 2005).

Chris Isidore writes at CNN: No one seems worried about a housing bubble. Just like last time the bubble burst.

CR take: There is agreement that underwriting standards are much better today than during the bubble (although I'm a little concern about some non-QM loans, and FHA loans are always a little risky - but nothing like the insanity during the housing bubble).  And also, if prices do fall, there is agreement we won't be cascading price declines like during the housing bust.

Here are some interesting quotes from the article:

"I don't think we'll see prices fall 20% to 30% once again," said Dean Baker, senior economist and co-founder of the Center for Economic Policy and Research. "I don't think there's that kind of story out there." But he cautioned that even a modest rise in interest rates could lead home prices to slide between 5% and 8%.

And from Mark Zandi:

"The housing market is out of whack. It's not sustainable. It is overvalued, stretched and vulnerable as [mortgage] rates rise, and affordability gets crushed," he said. "But I'm not concerned we're going to have a crash."

And from Ivy Zelman:

Zelman doesn't believe there will be another collapse in housing prices like the last time. She said that a rise in the 30-year fixed rate mortgage from the current 2.9% to about 4% could be enough to send prices lower. "A lot of what we're seeing is scary," she said. "We don't know what will happen with interest rates."

by Calculated Risk on 10/27/2021 03:32:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 416,154,424, as of a week ago 409,438,987, or 0.96 million doses per day.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	57.5%	57.1%	≥70.0%1
Fully Vaccinated (millions)	191.0	189.5	≥2321
New Cases per Day3	68,151	77,011	≤5,0002
Hospitalized3	46,206	52,123	≤3,0002
Deaths per Day3	1,098	1,242	≤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).  Note: COVID will probably stay endemic (at least for some time).

KUDOS to the residents of the 4 states that have achieved 70% of total population fully vaccinated: Vermont at 71.0%, Rhode Island, Connecticut, and Maine at 70.3% .

KUDOS also to the residents of the 12 states and D.C. that have achieved 60% of total population fully vaccinated: Massachusetts at 69.4%, New York, New Jersey, Maryland, New Mexico, New Hampshire, Washington, Oregon, Virginia, District of Columbia,  Colorado, California and Pennsylvania at 60.2%.

The following 20 states have between 50% and 59.9% fully vaccinated: Delaware at 59.7%, Minnesota, Hawaii, Florida, Wisconsin, Nebraska, Iowa, Illinois, Michigan, Kentucky, South Dakota, Texas, Arizona, Kansas, Nevada, Alaska, Utah, North Carolina, Ohio and Montana at 50.2%.

Next up (total population, fully vaccinated according to CDC) are Oklahoma at 49.8%, Indiana at 49.7%, South Carolina at 49.7%, Missouri at 49.5%, Georgia at 48.0%, and Arkansas at 47.7%.

Click on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

by Calculated Risk on 10/27/2021 01:59:00 PM

The National Multifamily Housing Council (NMHC) released their October survey data:

The Market Tightness Index decreased from 96 to 82 – indicating further tightening in market conditions (any reading above 50 indicates tighter conditions).

Most (71 percent) respondents reported tighter market conditions than in the July survey, compared to only 8 percent who reported looser conditions. Twenty percent of respondents felt that conditions were unchanged from 3 months ago.


Click on graph for larger image.

This graph shows the quarterly Apartment Tightness Index. Any reading above 50 indicates tighter conditions from the previous quarter. 

Even though the index declined in October, this indicates market conditions tightened further in October, after being especially weak during the early months of the pandemic.

Here is the question and the responses:

71% of respondents said their markets were tighter (lower vacancy / higher rents) than 3 months ago.

Historically that is a very high percentage.

by Calculated Risk on 10/27/2021 11:03:00 AM

Today, in the Real Estate Newsletter: Real House Prices, Price-to-Rent Ratio and Price-to-Median Income in August; And a look at "Affordability"

Excerpt (there is much more):

This graph uses the year end Case-Shiller house price index - and the nominal median household income through 2020 (from the Census Bureau).  2021 median income is estimated at a 5% annual gain.

By all of the above measures, house prices appear elevated.

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by Calculated Risk on 10/27/2021 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 0.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 22, 2021.

... The Refinance Index decreased 2 percent from the previous week and was 26 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 9 percent lower than the same week one year ago.

““Mortgage rates increased again last week, as the 30-year fixed rate reached 3.30 percent and the 15- year fixed rate rose to 2.59 percent – the highest for both in eight months. The increase in rates triggered the fifth straight decrease in refinance activity to the slowest weekly pace since January 2020. Higher rates continue to reduce borrowers’ incentive to refinance,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase applications picked up slightly, and the average loan size rose to its highest level in three weeks, as growth in the higher price segments continues to dominate purchase activity. Both new and existing-home sales last month were at their strongest sales pace since early 2021, but first-time home buyers are accounting for a declining share of activity. Home prices are still growing at a rapid clip, even if monthly growth rates are showing signs of moderation, and this is constraining sales in many markets, and particularly for first-timers.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.30 percent from 3.23 percent, with points decreasing to 0.34 from 0.35 (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 relatively low rates, the index remains somewhat elevated - but the recent bump in rates has slowed activity to the lowest level since January 2020.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 9% year-over-year unadjusted.

Note: The year ago comparisons for the unadjusted purchase index are now difficult since purchase activity was strong in the second half of 2020.

Note: Red is a four-week average (blue is weekly).

by Calculated Risk on 10/26/2021 07:33:00 PM

The Case-Shiller house price indexes for August were released this morning. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close.

From Zillow Research: August 2021 Case-Shiller Results & Forecast: Beginning to Ease Off the Gas

House price growth through August sustained July’s unprecedented velocity, but autumn’s reports indicate that the market is easing off the gas pedal.
...
Compared to August, homes took a little bit longer to sell in September and the for-sale inventory inched higher. In other words, though extraordinary market conditions pushed house prices skyward between the Spring of 2020 and the Summer of 2021, the latest signs indicate that the market is relenting. And while house price appreciation will remain elevated for the next several months, further acceleration is unlikely.

Monthly growth in September as reported by Case-Shiller is expected to accelerate from August in both the 10- and 20-city indices, and slow in the national index. Annual growth in September is expected to accelerate in the 20-city and national index, and slow in the 10-city index. S&P Dow Jones Indices is expected to release data for the September S&P CoreLogic Case-Shiller Indices on Tuesday, November 30.
emphasis added

The Zillow forecast is for the year-over-year change for the Case-Shiller National index to be at 20.2% in September, up from 19.8% in August.

by Calculated Risk on 10/26/2021 04:13:00 PM

Today, in the Newsletter: Case-Shiller National Index up Record 19.8% Year-over-year in August; The Deceleration is coming

Excerpt (there is much more):

Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).

The MoM increase in Case-Shiller was at 1.43%; still historically high, but lower than the previous five months. House prices started increasing sharply in the Case-Shiller index in August 2020, so the last 13 months have all been historically very strong, but the peak MoM growth is behind us.

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by Calculated Risk on 10/26/2021 04:06:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 414,302,192, as of a week ago 408,797,942, or 0.79 million doses per day.

COVID Metrics
	Today	Week Ago	Goal
Percent fully Vaccinated	57.4%	57.0%	≥70.0%1
Fully Vaccinated (millions)	190.7	189.3	≥2321
New Cases per Day3	65,953	78,197	≤5,0002
Hospitalized3	46,777	52,815	≤3,0002
Deaths per Day3	1,159	1,242	≤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).  Note: COVID will probably stay endemic (at least for some time).

KUDOS to the residents of the 4 states that have achieved 70% of total population fully vaccinated: Vermont at 70.9%, Rhode Island, Connecticut, and Maine at 70.1% .

KUDOS also to the residents of the 12 states and D.C. that have achieved 60% of total population fully vaccinated: Massachusetts at 69.4%, New York, New Jersey, Maryland, New Mexico, New Hampshire, Washington, Oregon, Virginia, District of Columbia,  Colorado, California and Pennsylvania at 60.1%.

The following 20 states have between 50% and 59.9% fully vaccinated: Delaware at 59.6%, Minnesota, Hawaii, Florida, Wisconsin, Nebraska, Iowa, Illinois, Michigan, Kentucky, South Dakota, Texas, Arizona, Kansas, Nevada, Alaska, Utah, North Carolina, Ohio and Montana at 50.0%.

Next up (total population, fully vaccinated according to CDC) are Oklahoma at 49.7%, Indiana at 49.6%, South Carolina at 49.6%, Missouri at 49.5%,  Arkansas at 47.7%, and Georgia at 47.6%.

Click on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

by Calculated Risk on 10/26/2021 12:06:00 PM

Today, in the Newsletter: New Home Sales: Record 106 thousand homes have not been started

Excerpt (there is much more):

The inventory of completed homes for sale was at 36 thousand in September, just above the record low of 33 thousand in March, April, May and July 2021. That is about 0.5 months of completed supply (just above the record low).

The inventory of new homes under construction is at 3.6 months - slightly above the normal level.

However, a record 106 thousand homes have not been started - about 1.6 months of supply - almost double the normal level. emphasis added

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by Calculated Risk on 10/26/2021 10:09:00 AM

The Census Bureau reports New Home Sales in September were at a seasonally adjusted annual rate (SAAR) of 800 thousand.

The previous three months were revised down significantly.

Sales of new single‐family houses in September 2021 were at a seasonally adjusted annual rate of 800,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 14.0 percent above the revised August rate of 702,000, but is 17.6 percent below the September 2020 estimate of 971,000
emphasis added

Click on graph for larger image.

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

New home sales are now declining year-over-year since sales soared following the first few months of the pandemic.

The second graph shows New Home Months of Supply.

The months of supply decreased in September to 5.7 months from 6.5 months in August.

The all time record high was 12.1 months of supply in January 2009. The all time record low was 3.5 months, most recently in October 2020.

This is in the normal range (about 4 to 6 months supply is normal).

"The seasonally‐adjusted estimate of new houses for sale at the end of September was 379,000. This represents a supply of 5.7 months at the current sales rate"

The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).

In September 2021 (red column), 65 thousand new homes were sold (NSA). Last year, 77 thousand homes were sold in September.

The all time high for September was 99 thousand in 2005, and the all time low for September was 24 thousand in 2011.

This was above expectations of 760 thousand SAAR, however sales in the three previous months were revised down significantly. I'll have more later today.

by Calculated Risk on 10/26/2021 09:12:00 AM

S&P/Case-Shiller released the monthly Home Price Indices for August ("August" is a 3 month average of June, July and August prices).

This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.

From S&P: Annual Home Price Gains Remained High in August According To S&P Corelogic Case-Shiller Index

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 19.8% annual gain in August, remaining the same as the previous month. The 10- City Composite annual increase came in at 18.6%, down from 19.2% in the previous month. The 20- City Composite posted a 19.7% year-over-year gain, down from 20.0% in the previous month.

Phoenix, San Diego, and Tampa reported the highest year-over-year gains among the 20 cities in August. Phoenix led the way with a 33.3% year-over-year price increase, followed by San Diego with a 26.2% increase and Tampa with a 25.9% increase. Eight of the 20 cities reported higher price increases in the year ending August 2021 versus the year ending July 2021.
...
Before seasonal adjustment, the U.S. National Index posted a 1.2% month-over-month increase in August, while the 10-City and 20-City Composites both posted increases of 0.8% and 0.9%, respectively.

After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.4%, and the 10-City and 20-City Composites both posted increases of 0.9% and 1.2%, respectively. In August, all 20 cities reported increases before and after seasonal adjustments.

“The U.S. housing market showed continuing strength in August 2021,” says Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. Every one of our city and composite indices stands at its all-time high, and year-over-year price growth continues to be very strong, although moderating somewhat from last month’s levels.

“In August 2021, the National Composite Index rose 19.84% from year-ago levels, marginally ahead of July’s 19.75% increase. This slowing acceleration was also evident in our 10- and 20-City Composites, which rose 18.6% and 19.7% respectively, modestly less than their rates of gain in July. Price gains were once again broadly distributed, as all 20 cities rose, although in most cases at a slower rate than had been the case a month ago.

“We have previously suggested that the strength in the U.S. housing market is being driven in part by a reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. More data will be required to understand whether this demand surge represents an acceleration of purchases that would have occurred anyway over the next several years, or reflects a secular change in locational preferences. August’s data are consistent with either explanation. August data also suggest that the growth in housing prices, while still very strong, may be beginning to decelerate.
emphasis added

Click on graph for larger image.

The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

The Composite 10 index is up 0.9% in August (SA).

The Composite 20 index is up 1.2% (SA) in August.

The National index is 45% above the bubble peak (SA), and up 1.4% (SA) in August.  The National index is up 96% from the post-bubble low set in February 2012 (SA).

The second graph shows the year-over-year change in all three indices.

The Composite 10 SA is up 18.6% compared to July 2020.  The Composite 20 SA is up 19.7% year-over-year.

The National index SA is up 19.8% year-over-year.

Price increases were slightly below expectations.  I'll have more later.

by Calculated Risk on 10/25/2021 09:00:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Improve Modestly From Long-Term Highs

Mortgage rates began the day right in line with Friday afternoon's latest levels. Lenders likely would have been able to offer lower rates if the bond market hadn't begun the day at weaker levels (bond market weakness = higher rates, all other things being equal). As the day progressed, bonds improved enough for most lenders to make positive adjustments. The so-called mid-day reprices left the average lender in just slightly better shape on the day. [30 year fixed 3.27%]
emphasis added

Tuesday:
• At 9:00 AM ET, S&P/Case-Shiller House Price Index for August.  The consensus is for the Composite 20 index to be up 20.1% year-over-year.

• Also at 9:00 AM, FHFA House Price Index for August. This was originally a GSE only repeat sales, however there is also an expanded index.

• At 10:00 AM, New Home Sales for September from the Census Bureau. The consensus is for 760 thousand SAAR, up from 740 thousand in August.

• Also at 10:00 AM, Richmond Fed Survey of Manufacturing Activity for October.