by Calculated Risk on 3/23/2022 09:06:00 PM

Thursday:
• At 8:30 AM ET, the initial weekly unemployment claims report will be released.  The consensus is for an increase to 215 thousand from 214 thousand last week.

• At 8:30 AM, Durable Goods Orders for February from the Census Bureau. The consensus is for a 0.5% decrease in durable goods orders.

• At 9:10 AM, Discussion, Fed Governor Waller, U.S. Housing Market, At the Tel Aviv University and Rutgers University Webinar: Recent Fiscal and Monetary Policies and Implications for US and Israeli Real Estate Markets (Virtual)

• At 11:00 AM, the Kansas City Fed manufacturing survey for March.

On COVID data tracker is down today.

by Calculated Risk on 3/23/2022 02:24:00 PM

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.

From the AIA: Demand for design service continues to grow

Demand for design services in February grew slightly since January, according to a new report today from The American Institute of Architects (AIA).

AIA’s Architecture Billings Index (ABI) score for February was 51.3, up from a score of 51.0 in January. Any score above 50 indicates an increase in billings. Firms reported both project inquiries and design contracts remaining positive in February, but while project inquiries increased to 62.5 from 61.9 in January, design contracts decreased to 55.2 from 56.1.

“Despite the continued healthy demand for design services, activity is plateauing as firms face a myriad of external challenges, from staffing to supply chain disruptions to high inflation and rising interest rates,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “While the rebound from the pandemic has positively impacted firms in most regions, the prolonged lack of demand for design services in the Northeast is of growing concern.”
...
• Regional averages: South (58.6); Midwest (53.2); West (47.9); Northeast (44.3)

• Sector index breakdown: commercial/industrial (55.4); mixed practice (53.8); multi-family residential (52.6); institutional (47.2)
emphasis added

Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was at 51.3 in February, up from 51.0 in January. 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 has been positive for thirteen consecutive months.  

This index usually leads CRE investment by 9 to 12 months, so this index suggests a pickup in CRE investment in 2022.

by Calculated Risk on 3/23/2022 11:36:00 AM

Today, in the Calculated Risk Real Estate Newsletter: February New Home Sales: Few Completed Inventory, High Number of Homes Under Construction

Brief excerpt:

The next graph shows new home sales for 2021 and 2022 by month (Seasonally Adjusted Annual Rate). Sales in February 2022 were down 6.2% from February 2021.

The year-over-year comparisons will be easier going forward.
...
The next graph shows the months of supply by stage of construction. “Months of supply” is inventory at each stage, divided by the sales rate.

The inventory of completed homes for sale was at 35 thousand in February, up from the record low of 33 thousand in several months in 2021. That is about 0.5 months of completed supply (red line). This is about half the normal level.

The inventory of new homes under construction is at 4.1 months (blue line) - well above the normal level. This elevated level of homes under construction is due to supply chain constraints.

And 106 thousand homes have not been started - about 1.7 months of supply (grey line) - almost double the normal level. Homebuilders are probably waiting to start some homes until they have a firmer grasp on prices.

You can subscribe at https://calculatedrisk.substack.com/.

by Calculated Risk on 3/23/2022 10:08:00 AM

The Census Bureau reports New Home Sales in February were at a seasonally adjusted annual rate (SAAR) of 772 thousand.

The previous three months were revised up slightly, combined.

Sales of new single‐family houses in February 2022 were at a seasonally adjusted annual rate of 772,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.0 percent below the revised January rate of 788,000 and is 6.2 percent below the February 2021 estimate of 823,000.
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 increased in February to 6.3 months from 6.1 months in January.

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 above the top of the normal range (about 4 to 6 months of supply is normal).

"The seasonally‐adjusted estimate of new houses for sale at the end of February was 407,000. This represents a supply of 6.3 months at the current sales rate."

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

In February 2022 (red column), 65 thousand new homes were sold (NSA). Last year, 70 thousand homes were sold in February

The all-time high for February was 109 thousand in 2005, and the all-time low for February was 22 thousand in 2011.

This was below expectations, however sales in the three previous months were revised up slightly, combined. I'll have more later today.

by Calculated Risk on 3/23/2022 07:00:00 AM

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

Mortgage applications decreased 8.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 18, 2022.

... The Refinance Index decreased 14 percent from the previous week and was 54 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 12 percent lower than the same week one year ago.

“Rates on 30-year conforming mortgages jumped by 23 basis points last week, the largest weekly increase since March 2020. The jump in rates comes as markets moved to price in a much faster pace of rate hikes, as well as expectations of fewer MBS purchases from the Federal Reserve. With mortgage rates now at 4.5 percent, compared to rates at or below 3 percent not that long ago, it is no surprise that refinance volume has dropped by more than 50 percent compared to this time last year. MBA’s new March forecast expects mortgage rates to continue to trend higher through the course of 2022,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Purchase application volume was down slightly for the week, with a larger drop in FHA and VA purchase volume, and a small decline in conventional purchase loans. First-time homebuyers, who rely on these government programs, are increasingly challenged by both the rapid increase in home prices and higher mortgage rates. Repeat homebuyers, who are more likely to use conventional loans, benefit from the gains in home equity realized on a sale which can be used to fuel their next purchase, even with rates moving higher.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.50 percent from 4.27 percent, with points increasing to 0.59 from 0.54 (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 higher mortgage rates, the refinance index has declined sharply over the last several months and is at the lowest level since December 2019.

Refinance activity will likely decline further in the survey next week since mortgage rates increased again this week.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 12% year-over-year unadjusted.

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

by Calculated Risk on 3/22/2022 09:27:00 PM

Wednesday:
• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 8:00 AM, Discussion, Fed Chair Powell, Panel on Emerging Challenges for Central Bank Governors in a Digital World, At the Bank for International Settlements (BIS) Innovation Summit 2022 (Virtual)

• At 10:00 AM, New Home Sales for February from the Census Bureau. The consensus is for 815 thousand SAAR, up from 801 thousand in January.

• During the day, The AIA's Architecture Billings Index for February (a leading indicator for commercial real estate).

On COVID (focus on hospitalizations and deaths):

COVID Metrics
	Now	Week Ago	Goal
Percent fully Vaccinated	65.4%	---	≥70.0%1
Fully Vaccinated (millions)	217.1	---	≥2321
New Cases per Day3	28,657	31,558	≤5,0002
Hospitalized3	18,203	25,105	≤3,0002
Deaths per Day3	861	1,167	≤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.

Click on graph for larger image.

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

New cases, hospitalizations and deaths are now declining.

by Calculated Risk on 3/22/2022 05:51:00 PM

From WardsAuto: Forecast March U.S. Light-Vehicle Sales: SAAR Down from February but First-Quarter Results Best Since Q2-2021 (pay content)

Supply issues continue to impact vehicle sales, but it appears the supply chain disruption bottom is in.

Click on graph for larger image.

This graph shows actual sales from the BEA (Blue), and Wards forecast for March (Red).

The Wards forecast of 13.4 million SAAR, would be down about 5% from last month, and down 24% from a year ago (sales were solid in March 2021, as sales recovered from the depths of the pandemic, and weren't yet impacted by supply chain issues).

by Calculated Risk on 3/22/2022 02:30:00 PM

By request, here is an update to the "distressing gap" graph that I first started posting following the housing bubble to show the emerging gap caused by distressed sales.

I haven't posted this in a couple of years since the pandemic distorted the numbers.

The "distressing gap" graph shows existing home sales (left axis) and new home sales (right axis) through January 2022. This graph starts in 1994, but the relationship had been fairly steady back to the '60s.

Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales.

In 2020, the gap was mostly closed with help from the pandemic.

However, now the gap has returned somewhat, probably due to supply constraints limiting new home sales (and the recent boost to existing home sales due to low mortgage rates, favorable demographics, and strong investor buying).

Another way to look at this is a ratio of existing to new home sales.

This ratio was fairly stable from 1994 through 2006, and then the flood of distressed sales kept the number of existing home sales elevated and depressed new home sales. (Note: This ratio was fairly stable back to the early '70s, but I only have annual data for the earlier years).

In general, the ratio has been trending down since the housing bust - and was close to the historical ratio before the pandemic.

Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So, the timing of sales is different.

by Calculated Risk on 3/22/2022 11:21:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Mortgage Rates Moving Closer to 5%

A brief excerpt:

Mortgage News Daily reports that the most prevalent 30-year fixed rate is now at 4.66% for top tier scenarios. Matthew Graham at Mortgage News Daily wrote yesterday: Bond Market Betrayal as Mortgage Rates Hit Another Long Term High

The event in question was a speech (and subsequent comments) from Fed Chair Powell. Rather than do anything at all to push back against last week's Fed-driven rate spike, Powell forcefully doubled down on the Fed's urgent need to shift Fed policy to an even less rate-friendly stance.

Mortgage lenders were already roughly an eighth of a point higher in terms of 30yr fixed rates this morning. After Powell, rates nearly doubled that move (i.e. some lenders are a quarter of a point higher in rate versus Friday's latest levels). That makes today one of only 5 days with this big of a spike in more than a decade.

Lender rate offerings are widely stratified and many are still getting caught up with the market volatility, but it's safe to say the average lender is now over 4.5%, and much closer to 4.625% for top tier conventional 30yr fixed scenarios.

Of course, rates are still historically low. But rates are up sharply from the recent lows, and my view is the change in rates is what will impact housing (see my post last week: Housing, the Fed, Interest Rates and Inflation; Housing is a key transmission mechanism for the FOMC). Here is a long-term graph of 30-year mortgage rates (Freddie Mac PMMS, February is today’s rate).

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

by Calculated Risk on 3/22/2022 09:29:00 AM

A few excerpt from a Goldman Sachs research note: Moving “Expeditiously” Implies a Faster Pace; Forecasting 50bp Hikes in May and June

In a speech [yesterday], Chair Powell said, “There is an obvious need to move expeditiously to return the stance of monetary policy to a more neutral level, and then to move to more restrictive levels if that is what is required to restore price stability.” He repeated the call “to move expeditiously” at the end of the speech. ... We now forecast 50bp hikes at both the May and June meetings, followed by 25bp hikes at the four remaining meetings in the back half of 2022 ... We continue to expect the FOMC to announce the start of balance sheet reduction at the May meeting.
emphasis added

CNBC's Steve Liesman tweeted this morning:

"The Dec. Fed Funds contract trades with an implied yield of 2.13... that means 7 MORE hikes from here or 8 total this year. At least one of those meetings needs to be 50bp. The 50bp probability for May is 68%. There is also going to be balance sheet reduction."

So a 50bps hike - and balance sheet reduction - are becoming the consensus view.

by Calculated Risk on 3/21/2022 09:00:00 PM

From Matthew Graham at Mortgage News Daily: From Bad to Worse as Powell Doubles Down on Policy Shift

Things were already fairly ugly this morning as the bond market opted to pay no attention to last Friday's consolidation potential. Fed Funds Futures showed the market pricing in at least one 50bp hike in addition to a 25bp hike at every remaining Fed meeting this year. Powell's scheduled speech added a significant amount of fuel to that fire at 12:30pm. He did nothing to try to calm the market down, but instead, essentially told traders they were correct in rushing to price in more rate hikes and faster policy normalization. This resulted in overnight losses more than doubling across the curve, and widespread negative reprices. [30 year fixed 4.66%]
emphasis added

Tuesday:
• At 10:00 AM ET, Richmond Fed Survey of Manufacturing Activity for March.

On COVID (focus on hospitalizations and deaths):

COVID Metrics
	Now	Week Ago	Goal
Percent fully Vaccinated	65.4%	---	≥70.0%1
Fully Vaccinated (millions)	217.1	---	≥2321
New Cases per Day3	27,786	33,721	≤5,0002
Hospitalized3	18,203	25,105	≤3,0002
Deaths per Day3	901	1,187	≤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.

Click on graph for larger image.

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

New cases, hospitalizations and deaths are now declining.

by Calculated Risk on 3/21/2022 04:00:00 PM

Note: This is as of February 28th.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 1.18% in February

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 12 basis points from 1.30% of servicers’ portfolio volume in the prior month to 1.18% as of February 28, 2022. According to MBA’s estimate, 590,000 homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 8 basis points to 0.56%. Ginnie Mae loans in forbearance decreased 10 basis points to 1.50%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 30 basis points to 2.72%

“There were many positive results in overall mortgage performance in February. The percentage of borrowers in forbearance declined for the 21st consecutive month, and the percentage of borrowers current on their mortgage payments increased to almost 95 percent – 350 basis points higher than one year ago. Finally, the percentage of borrowers with existing loan workouts who were current on their mortgage payments improved for the first time since June 2021,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “These three results – the lower forbearance rates and higher performance rates for both total borrowers and borrowers in workouts – are especially favorable given that there is typically a dip in mortgage performance in February because of the shortened number of days to make a payment.”

Added Walsh, “We can credit several factors to the improved performance, including the availability of viable loss mitigation options, low unemployment that is now below 4.0 percent, strong wage growth, and rising home equity."
emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.  The number of forbearance plans is decreasing.

by Calculated Risk on 3/21/2022 03:10:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Final Look at Local Housing Markets in February

A brief excerpt:

This update adds Columbus, Illinois, Indiana, Maryland, Miami, New York, Pennsylvania, Phoenix, Rhode Island and Washington, D.C.

My view is that if the housing market starts slowing, it will show up in inventory first.
...
Here is a summary of active listings for these housing markets in February. Inventory was down 3.8% in February month-over-month (MoM) from January, and down 28.0% year-over-year (YoY).

It appears inventory has bottomed seasonally in some areas. Last month, these markets were down 30.5% YoY, so the YoY decline in February is smaller than in January. This isn’t indicating a slowing market, but maybe a few baby steps towards a more balanced market in some areas.

Notes for all tables:

1. New additions to table in BOLD.

2. Northwest (Seattle), North Texas (Dallas), and Santa Clara (San Jose), Jacksonville, Source: Northeast Florida Association of REALTORS®

3. Totals do not include Atlanta, Denver, Minneapolis (included in state totals).

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

by Calculated Risk on 3/21/2022 12:34:00 PM

From Fed Chair Powell: Restoring Price Stability. Excerpt on inflation:

Turning to price stability, the inflation outlook had deteriorated significantly this year even before Russia's invasion of Ukraine.

The rise in inflation has been much greater and more persistent than forecasters generally expected. For example, at the time of our June 2021 meeting, every Federal Open Market Committee (FOMC) participant and all but one of 35 submissions in the Survey of Professional Forecasters predicted that 2021 inflation would be below 4 percent. Inflation came in at 5.5 percent.

For a time, moderate inflation forecasts looked plausible—the one-month headline and core inflation rates declined steadily from April through September. But inflation moved up sharply in the fall, and, just since our December meeting, the median FOMC projection for year-end 2022 jumped from 2.6 percent to 4.3 percent.

Why have forecasts been so far off? In my view, an important part of the explanation is that forecasters widely underestimated the severity and persistence of supply-side frictions, which, when combined with strong demand, especially for durable goods, produced surprisingly high inflation.

The pandemic and the associated shutdown and reopening of the economy caused a serious upheaval in many parts of the economy, snarling supply chains, constraining labor supply, and creating a major boom in demand for goods and a bust in services demand. The combination of the surge in goods demand with supply chain bottlenecks led to sharply rising goods prices (figure 4). The most notable example here is motor vehicles. Prices soared across the vehicles sector as booming demand was met by a sharp decline in global production during the summer of 2021, owing to shortages of computer chips. Production remains below pre-pandemic levels, and an expected sharp decline in prices has been repeatedly postponed.

Many forecasters, including FOMC participants, had been expecting inflation to cool in the second half of last year, as the economy started going back to normal after vaccines became widely available.3 Expectations were that the supply-side damage would begin to heal. Schools would reopen—freeing parents to return to work—and labor supply would begin bouncing back, kinks in supply chains would begin resolving, and consumption would start rotating back to services, all of which could reduce price pressures. While schools are open, none of the other expectations has been fully met. Part of the reason may be that, contrary to expectations, COVID has not gone away with the arrival of vaccines. In fact, we are now headed once again into more COVID-related supply disruptions from China. It continues to seem likely that hoped-for supply-side healing will come over time as the world ultimately settles into some new normal, but the timing and scope of that relief are highly uncertain. In the meantime, as we set policy, we will be looking to actual progress on these issues and not assuming significant near-term supply-side relief.
emphasis added

by Calculated Risk on 3/21/2022 09:36:00 AM

Tracking existing home inventory is very important in 2022.

Inventory usually declines in the winter, and then increases in the spring.  It appears that inventory bottomed seasonally at the beginning of March.

Click on graph for larger image in graph gallery.

This inventory graph is courtesy of Altos Research.

As of March 18th, inventory was at 248 thousand (7-day average), compared to 316 thousand for the same week a year ago.  That is a decline of 21.7%. 

 A week ago, inventory was at 249 thousand, and was also down 21.7% YoY.    

Inventory was down 0.4% from the previous week, and UP 2.7% from the seasonal low at the beginning of March.

Compared to the same week in 2020, inventory is down 66.4% from 738 thousand.

Last year inventory bottomed seasonally in April 2021 - very late in the year. This year it appears inventory bottomed seasonally at the beginning of March (we need a few more weeks of increasing inventory to confirm this).

And here is a table of the year-over-year change by week since the beginning of the year. 

Week Ending	YoY Change
12/31/2021	-30.0%
1/7/2022	-26.0%
1/14/2022	-28.6%
1/21/2022	-27.1%
1/28/2022	-25.9%
2/4/2022	-27.9%
2/11/2022	-27.5%
2/18/2022	-25.8%
2/25/2022	-24.9%
3/4/2022	-24.2%
3/11/2022	-21.7%
3/18/2022	-21.7%

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 3/21/2022 08:38:00 AM

These indicators are mostly for travel and entertainment.    It is interesting to watch these sectors recover as the pandemic subsides.

----- Airlines: Transportation Security Administration -----
The TSA is providing daily travel numbers.

This data is as of March 20th.

Click on graph for larger image.

This data shows the 7-day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Black), 2021 (Blue) and 2022 (Red).

The dashed line is the percent of 2019 for the seven-day average.

The 7-day average is down 10.5% from the same day in 2019 (89.5% of 2019).  (Dashed line) 

Air travel was picking up over the last few of weeks.

----- Restaurants: OpenTable -----
The second graph shows the 7-day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities.

IMPORTANT: OpenTable notes that all data is compared to 2019. Thanks!

Thanks to OpenTable for providing this restaurant data:

This data is updated through March 19, 2022.

This data is "a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. For year-over-year comparisons by day, we compare to the same day of the week from the same week in the previous year."

Dining was mostly moving sideways but declined during the winter wave of COVID and is now increasing.  The 7-day average for the US is unchanged compared to 2019.

----- Movie Tickets: Box Office Mojo -----
This data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue).  

Black is 2020, Blue is 2021 and Red is 2022.  

The data is from BoxOfficeMojo through March 17th.

Note that the data is usually noisy week-to-week and depends on when blockbusters are released.  

Movie ticket sales were at $140 million last week, down about 36% from the median for the week. 

----- Hotel Occupancy: STR -----
This graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.

The red line is for 2022, black is 2020, blue is the median, and dashed light blue is for 2021.

This data is through March 12th. The occupancy rate was down 9.8% compared to the same week in 2019.

The 4-week average of the occupancy rate is close to the median rate for the previous 20 years (Blue).

Notes: Y-axis doesn't start at zero to better show the seasonal change.

The 4-week average of the occupancy rate will increase seasonally over the next few weeks.

----- Transit: Apple Mobility -----
This graph is from Apple mobility. From Apple: "This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities." This is just a general guide - people that regularly commute probably don't ask for directions.

This data is through March 17th 

for the United States and several selected cities.

The graph is the running 7-day average to remove the impact of weekends.

IMPORTANT: All data is relative to January 13, 2020. This data is NOT Seasonally Adjusted. People walk and drive more when the weather is nice, so I'm just using the transit data.

According to the Apple data directions requests, public transit in the 7-day average for the US is at 123% of the January 2020 level. 

----- New York City Subway Usage -----
Here is some interesting data on New York subway usage (HT BR).

This graph is from Todd W Schneider. 

This graph shows how much MTA traffic has recovered in each borough (Graph starts at first week in January 2020 and 100 = 2019 average).

Manhattan is at about 37% of normal.

This data is through Friday, March 18th.

He notes: "Data updates weekly from the MTA’s public turnstile data, usually on Saturday mornings".

by Calculated Risk on 3/20/2022 07:14:00 PM

Weekend:
• Schedule for Week of March 20, 2022

Monday:
• At 8:30 AM ET, Chicago Fed National Activity Index for February. This is a composite index of other data.

• At 12:00 PM, Speech, Fed Chair Powell, Economic Outlook, At the National Association for Business Economics (NABE) Annual Economic Policy Conference, Washington, D.C

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 and DOW futures are mostly unchanged fair value).

Oil prices were down over the last week with WTI futures at $106.00 per barrel and Brent at $109.01 per barrel. A year ago, WTI was at $61, and Brent was at $64 - so WTI oil prices are up 75% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $4.23 per gallon. A year ago prices were at $2.86 per gallon, so gasoline prices are up $1.37 per gallon year-over-year.

by Calculated Risk on 3/20/2022 08:30:00 AM

Notes: The expansion to the Panama Canal was completed in 2016 (As I noted a few years ago), and some of the traffic that used the ports of Los Angeles and Long Beach is probably going through the canal. This might be impacting TEUs on the West Coast.

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12-month average.

Click on graph for larger image.

On a rolling 12-month basis, inbound traffic was up 0.3% in February compared to the rolling 12 months ending in January.   Outbound traffic was down 0.3% compared to the rolling 12 months ending the previous month.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year.

As expected, there wasn't a dip in February this year with ships still backed up waiting to unload.

Imports were up 4% YoY in February, and exports were down 3% YoY.

This was record inbound traffic for the month of February.

by Calculated Risk on 3/19/2022 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• NAR: Existing-Home Sales Decreased to 6.02 million SAAR in February

• February Housing Starts: Most Housing Units Under Construction Since 1973

• Housing, the Fed, Interest Rates and Inflation Housing is a key transmission mechanism for the FOMC

• 3rd Look at Local Housing Markets in February California Sales Down 8.2% YoY, Inventory up from January

• Housing Inventory May Have Bottomed Seasonally

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

The blog will continue as always!

You can subscribe at https://calculatedrisk.substack.com/ Most content is available for free (and no Ads), but please subscribe!

by Calculated Risk on 3/19/2022 08:11:00 AM

The key report this week is February New Home sales.

For manufacturing, the March Richmond and Kansas City manufacturing surveys will be released.

Also Fed Chair Powell speaks on the economic outlook, and Fed Governor Waller discusses the U.S. housing market.

----- Monday, March 21st -----
8:30 AM ET: Chicago Fed National Activity Index for February. This is a composite index of other data.

12:00 PM: Speech, Fed Chair Powell, Economic Outlook, At the National Association for Business Economics (NABE) Annual Economic Policy Conference, Washington, D.C

----- Tuesday, March 22nd -----
10:00 AM: Richmond Fed Survey of Manufacturing Activity for March.

----- Wednesday, March 23rd -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:00 AM: Discussion, Fed Chair Powell, Panel on Emerging Challenges for Central Bank Governors in a Digital World, At the Bank for International Settlements (BIS) Innovation Summit 2022 (Virtual)

10:00 AM: New Home Sales for February from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the sales rate for last month.

The consensus is for 815 thousand SAAR, up from 801 thousand in January.

During the day: The AIA's Architecture Billings Index for February (a leading indicator for commercial real estate).

----- Thursday, March 24th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for an increase to 215 thousand from 214 thousand last week.

8:30 AM: Durable Goods Orders for February from the Census Bureau. The consensus is for a 0.5% dncrease in durable goods orders.

9:10 AM: Discussion, Fed Governor Waller, U.S. Housing Market, At the Tel Aviv University and Rutgers University Webinar: Recent Fiscal and Monetary Policies and Implications for US and Israeli Real Estate Markets (Virtual)

11:00 AM: the Kansas City Fed manufacturing survey for March.

----- Friday, March 25th -----
10:00 AM: Pending Home Sales Index for February. The consensus is for a 1.5% increase in the index.

10:00 AM: University of Michigan's Consumer sentiment index (Final for March). The consensus is for a reading of 59.7.

10:00 AM: State Employment and Unemployment (Monthly), February 2022