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Friday: Existing Home Sales

2 days ago

Friday:• At 10:00 AM ET, Existing Home Sales for December from the National Association of Realtors (NAR). The consensus is for 6.55 million SAAR, down from 6.69 million.Housing economist Tom Lawler estimates the NAR will report sales of 6.62 million SAAR for December.

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January 21 COVID-19 Test Results and Vaccinations

2 days ago

Note: Bloomberg has great data on vaccinations. "Vaccinations in the U.S. began Dec. 14 with health-care workers, and so far 18.4 million shots have been given, according to a state-by-state tally by Bloomberg and data from the Centers for Disease Control and Prevention. In the last week, an average of 939,973 doses per day were administered."Also check out the graphs at COVID-19 Vaccine Projections The site has several interactive graphs related to US COVID vaccinations including a breakdown of how many have had one shot, and how many have had both shots. It is possible the 7-day average cases has peaked. Stay safe! I’m looking forward to not posting this data in a few months. The US is now averaging close to 2 million tests per day. Based on the experience of other countries,

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Hotels: Occupancy Rate Declined 31.8% Year-over-year

3 days ago

From CoStar: US Hotel Occupancy Exceeds 40% During Week of Jan. 16U.S. weekly hotel occupancy climbed back to the 40% mark, according to STR‘s latest data through 16 January.10-16 January 2021 (percentage change from comparable week in 2020):• Occupancy: 40.1% (-31.8%)• Average daily rate (ADR): US$89.39 (-31.9%)• evenue per available room (RevPAR): US$35.85 (-53.6%)emphasis addedThe 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, and dashed light blue is for 2009 (the worst year since the Great Depression for hotels prior to 2020).Even when occupancy increases to 2009 levels, hotels will still be hurting.Seasonally we’d expect that business

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Comments on December Housing Starts

3 days ago

Earlier: Housing Starts increased to 1.669 Million Annual Rate in DecemberTotal housing starts in December were above expectations, and starts in October and November were revised up. The single family sectors has increased sharply, but the volatile multi-family sector is down significantly year-over-year (apartments are under  pressure from COVID).The housing starts report showed starts were up 5.8% in December compared to November, and starts were up 5.2% year-over-year compared to December 2019.Single family starts were up 28% year-over-year.  Single family starts are at the highest level since 2006.  Low mortgage rates and limited existing home inventory have given a boost to single family housing starts.The first graph shows the month to month comparison for total starts between 2019

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Housing Starts increased to 1.669 Million Annual Rate in December

3 days ago

From the Census Bureau: Permits, Starts and CompletionsHousing Starts:Privately-owned housing starts in December were at a seasonally adjusted annual rate of 1,669,000. This is 5.8 percent above the revised November estimate of 1,578,000 and is 5.2 percent above the December 2019 rate of 1,587,000. Single-family housing starts in December were at a rate of 1,338,000; this is 12.0 percent above the revised November figure of 1,195,000. The December rate for units in buildings with five units or more was 312,000. An estimated 1,380,300 housing units were started in 2020. This is 7.0 percent above the 2019 figure of 1,290,000. Building Permits:Privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,709,000. This is 4.5 percent

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Weekly Initial Unemployment Claims decreased to 900,000

3 days ago

The DOL reported:In the week ending January 16, the advance figure for seasonally adjusted initial claims was 900,000, a decrease of 26,000 from the previous week’s revised level. The previous week’s level was revised down by 39,000 from 965,000 to 926,000. The 4-week moving average was 848,000, an increase of 23,500 from the previous week’s revised average. The previous week’s average was revised down by 9,750 from 834,250 to 824,500. emphasis addedThis does not include the 423,734 initial claims for Pandemic Unemployment Assistance (PUA) that was up from 284,886 the previous week.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

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Thursday: Housing Starts, Unemployment Claims, Philly Fed Mfg

3 days ago

Thursday:• At 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for a decrease to 910 thousand from 965 thousand last week.• Also at 8:30 AM, Housing Starts for December. The consensus is for 1.560 million SAAR, up from 1.547 million SAAR.• Also at 8:30 AM, the Philly Fed manufacturing survey for January. The consensus is for a reading of 12.3, up from 9.1.

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January 20 COVID-19 Test Results

3 days ago

Note: Bloomberg has great data on vaccinations. "Vaccinations in the U.S. began Dec. 14 with health-care workers, and so far 17.2 million shots have been given, according to a state-by-state tally by Bloomberg and data from the Centers for Disease Control and Prevention. In the last week, an average of 912,497 doses per day were administered." It is possible the 7-day average cases has peaked. Stay safe! I’m looking forward to not posting this data in a few months. The US is now averaging close to 2 million tests per day. Based on the experience of other countries, for adequate test-and-trace (and isolation) to reduce infections, the percent positive needs to be under 5% (probably close to 1%), so the US has far too many daily cases – and percent positive – to do effective

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AIA: "Architecture Billings continue to lose ground" in December

4 days ago

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.From the AIA: Architecture Billings continue to lose groundDemand for design services from U.S. architecture firms took a pointed dip last month, according to a new report from the American Institute of Architects (AIA).The pace of decline during December accelerated from November, posting an Architecture Billings Index (ABI) score of 42.6 from 46.3 (any score below 50 indicates a decline in firm billings). Meanwhile, the pace of growth of inquiries into new projects remained flat from November to December with a score of 52.4, though the value of new design contracts stayed in negative territory with a score of 48.5.“Since the national economic recovery appears to have stalled, architecture

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LA Area Port Traffic: Strong Imports, Weak Exports in December

4 days ago

Note: 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

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NAHB: Builder Confidence Decreased to 83 in January

4 days ago

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 83, down from 86 in December. Any number above 50 indicates that more builders view sales conditions as good than poor.From the NAHB: Builder Confidence Down on Rising Material Prices, Upsurge in COVID-19 CasesRising material costs led by a huge upsurge in lumber prices, along with a resurgence of the coronavirus across much of the nation, pushed builder confidence in the market for newly built single-family homes down three points to 83 in January, according to the latest NAHB/Wells Fargo Housing Market Index (HMI) released today. Despite the drop, builder sentiment remains at a strong level. “Despite robust housing demand and low mortgage rates, buyers are facing a dearth of new homes on the

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MBA: Mortgage Applications Decrease in Latest Weekly Survey

4 days ago

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly SurveyMortgage applications decreased 1.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 15, 2021…. The Refinance Index decreased 5 percent from the previous week and was 87 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 9 percent compared with the previous week and was 15 percent higher than the same week one year ago.“Mortgage rates increased across the board last week, with the 30-year fixed rate rising to 2.92 percent – its highest level since November 2020 – and the 15-year fixed rate

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Wednesday: Homebuilder Survey

4 days ago

Wednesday:• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.• At 10:00 AM, The January NAHB homebuilder survey. The consensus is for a reading of  86, unchanged from 86 in December. Any number above 50 indicates that more builders view sales conditions as good than poor.• During the day, The AIA’s Architecture Billings Index for December (a leading indicator for commercial real estate).

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January 19 COVID-19 Test Results

4 days ago

Note: Bloomberg has great data on vaccinations. "The U.S. has administered 15.6 million doses" The testing data is probably still light due to the holiday, but it is possible the 7-day average cases has peaked. Stay safe! I’m looking forward to not posting this data in a few months. The US is now averaging close to 2 million tests per day. Based on the experience of other countries, for adequate test-and-trace (and isolation) to reduce infections, the percent positive needs to be under 5% (probably close to 1%), so the US has far too many daily cases – and percent positive – to do effective test-and-trace.There were 1,698,121 test results reported over the last 24 hours.There were 144,047 positive tests.Over 55,000 US deaths have been reported so far in January. See the graph on US

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MBA Survey: "Share of Mortgage Loans in Forbearance Decreases to 5.37%"

4 days ago

Note: This is as of January 10th.From the MBA: Share of Mortgage Loans in Forbearance Decreases to 5.37%The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased from 5.46% of servicers’ portfolio volume in the prior week to 5.37% as of January 10, 2021. According to MBA’s estimate, 2.7 million homeowners are in forbearance plans….“The week of January 10th saw the largest – and only the second – decrease in the share of loans in forbearance in nine weeks, with declines across almost every tracked loan category,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “The rate of exits from forbearance has picked up a bit over the past two weeks but remains much lower than what

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Update Then and Now: With Column Excluding Pandemic

5 days ago

A few indicators comparing four years ago and today (and a column after three years – excluding the pandemic) …  Jan-17Jan-20Dec-20Vehicle Sales116.716.916.4Employment change2 2,5912,195-704Unemployment Rate34.7%3.5%6.7%Participation Rate462.8%63.4%61.5% Housing Starts51,0561,2621,278New Home Sales6486644679Mortgage Delinquency Rate76.1%4.6%8.3%GDP Growth82.3%2.5%1.0% Budget Deficit93.2%4.6%16.0%S&P 500102,2693,3173,8001millions, SAAR (average previous 4 years, or 3 years for Jan 2020)2Thousands (Average previous 4 years, or 3 years for Jan 2020)3Most Recent Month4Most Recent Month 5Thousands, SAAR (average previous 4 years, or 3 years for Jan 2020)6Thousands, SAAR (average previous 4 years, or 3 years for Jan 2020)7Annual GDP growth (over previous 4 years, or 3 years for Jan

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Lawler: Early Read on Existing Home Sales in December

5 days ago

From housing economist Tom Lawler:Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 6.62 million in December, down 1.0% from November’s preliminary pace and up 19.7% from last December’s seasonally adjusted pace.Local realtor reports, as well as reports from national inventory trackers, suggest that the YOY decline in the inventory of existing homes for sale was slightly greater in December than November, though what that means for the NAR inventory estimate is unclear. As I’ve noted before, the inventory measure in most publicly-released local realtor/MLS reports excludes listings with pending contracts, but

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Then and Now

5 days ago

A few indicators comparing four years ago and today …  Jan-17Dec-20Vehicle Sales116.716.4Employment change2 10,364-2,818Unemployment Rate34.7%6.7%Participation Rate462.8%61.5% Housing Starts51,0561,278New Home Sales6486679Mortgage Delinquency Rate76.1%8.3%Budget Deficit83.2%16.0%S&P 50092,2693,7901millions, SAAR (average previous 4 years)2Thousands (over previous 4 years)3Most Recent Month4Most Recent Month 5Thousands, SAAR (average previous 4 years)6Thousands, SAAR (average previous 4 years)7Source: MBA, Quarterly including in-foreclosure (most recent quarter)8Annual, fiscal 2016 vs. 20209Jan 20, 2017 vs Jan 19, 2021

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A Positive Note from Merrill: "A light at the end of the COVID cave"

5 days ago

Here is a positive outlook on the 2021 economy.  A few brief excerpts from a research note by Merrill Lynch Global Economist Ethan Harris: A light at the end of the COVID cave Normally we write about COVID news in the back, but now it deserves front-page coverage; With COVID cases falling and vaccines accelerating, this is probably the beginning of the end of the COVID crisis. Here we argue: • Renewed restrictions and the end to the holiday season seem to be bending the cases curve.• The vaccine rollout should continue to accelerate as new resources and effort is put into the project.• There is one major caveat: new more contagious strains have arrived in the US….What does this mean for the economy? We continue to see upside risks to our above consensus forecast. We think the

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January 18 COVID-19 Test Results

5 days ago

Note: Holiday data is always light. But it is possible the 7-day average cases has peaked. Stay safe! I’m looking forward to not posting this data in a few months. The US is now averaging close to 2 million tests per day. Based on the experience of other countries, for adequate test-and-trace (and isolation) to reduce infections, the percent positive needs to be under 5% (probably close to 1%), so the US has far too many daily cases – and percent positive – to do effective test-and-trace.There were 2,079,206 test results reported over the last 24 hours.There were 150,385 positive tests.Over 53,000 US deaths have been reported so far in January. See the graph on US Daily Deaths here.Click on graph for larger image.This data is from the COVID Tracking Project.The percent positive over

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Housing Inventory Weekly Update: Starting the Year at Record Lows

6 days ago

One of the key questions for 2021 is: Will inventory increase as the pandemic subsides, or will inventory decrease further in 2021?Tracking inventory will be very important this year, and I’ll be using some weekly sources.Click on graph for larger image in graph gallery.This inventory graph is courtesy of Altos Research.As of January 15th, inventory is at 389 thousand (7 day average), compared to 740 thousand the same week a year ago.  That is a decline of 47%.A week ago, inventory was at 397 thousand, and seasonally inventory should bottom soon.Mike Simonsen discusses this data regularly on Youtube.

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Seven High Frequency Indicators for the Economy

6 days ago

These indicators are mostly for travel and entertainment.    It will interesting to watch these sectors recover as the vaccine is distributed.   IMPORTANT: Be safe now – if all goes well, we could all be vaccinated by Q2 2021.—– Airlines: Transportation Security Administration —–The TSA is providing daily travel numbers. Click on graph for larger image.This data shows the seven day average of daily total traveler throughput from the TSA for 2019-2020 (Blue) and 2020-2021 (Red).The dashed line is the percent of last year for the seven day average.This data is as of January 17th.The seven day average is down 59.0% from last year (41.0% of last year).  (Dashed line)There has been a slow increase from the bottom, with ups and downs due to the Thanksgiving and Christmas holidays.—–

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January 17 COVID-19 Test Results

6 days ago

Note: It is possible the 7-day average cases has peaked. Stay safe! I’m looking forward to not posting this data in a few months. The US is now averaging close to 2 million tests per day. Based on the experience of other countries, for adequate test-and-trace (and isolation) to reduce infections, the percent positive needs to be under 5% (probably close to 1%), so the US has far too many daily cases – and percent positive – to do effective test-and-trace.There were 1,836,498 test results reported over the last 24 hours.There were 185,518 positive tests.Over 52,000 US deaths have been reported so far in January. See the graph on US Daily Deaths here.Click on graph for larger image.This data is from the COVID Tracking Project.The percent positive over the last 24 hours was 10.1% (red

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Update: The Inland Empire

7 days ago

Way back in 2006 I disagreed with some analysts on the outlook for the Inland Empire in California. I wrote: As the housing bubble unwinds, housing related employment will fall; and fall dramatically in areas like the Inland Empire. The more an area is dependent on housing, the larger the negative impact on the local economy will be.So I think some pundits have it backwards: Instead of a strong local economy keeping housing afloat, I think the bursting housing bubble will significantly impact housing dependent local economies.And sure enough, the economies of housing dependent areas like the Inland Empire were devastated during the housing bust.  However, prior to the pandemic, the Inland Empire was coming back strong. Click on graph for larger image.This graph shows the unemployment rate

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January 16 COVID-19 Test Results; Over 50,000 Deaths in January Already

7 days ago

Note: It is possible the 7-day average cases is nearing a peak. I’m looking forward to not posting this data in a few months. The US is now averaging close to 2 million tests per day. Based on the experience of other countries, for adequate test-and-trace (and isolation) to reduce infections, the percent positive needs to be under 5% (probably close to 1%), so the US has far too many daily cases – and percent positive – to do effective test-and-trace.There were 2,015,414 test results reported over the last 24 hours.There were 215,449 positive tests.Over 50,000 US deaths have been reported so far in January. See the graph on US Daily Deaths here.Click on graph for larger image.This data is from the COVID Tracking Project.The percent positive over the last 24 hours was 10.7% (red line is

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Schedule for Week of January 17, 2021

8 days ago

The key reports this week are December housing starts and existing home sales.For manufacturing, the January Philly Fed manufacturing survey will be released.—– Monday, Jan 18th —–All US markets will be closed in observance of Martin Luther King Jr. Day—– Tuesday, Jan 19th —–No major economic releases scheduled.—– Wednesday, Jan 20th —–7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.10:00 AM: The January NAHB homebuilder survey. The consensus is for a reading of  86, unchanged from 86 in December. Any number above 50 indicates that more builders view sales conditions as good than poor.During the day: The AIA’s Architecture Billings Index for December (a leading indicator for commercial real

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January 15 COVID-19 Test Results

8 days ago

Note: It is possible the 7-day average cases is nearing a peak. I’m looking forward to not posting this data in a few months. The US is now averaging close to 2 million tests per day. Based on the experience of other countries, for adequate test-and-trace (and isolation) to reduce infections, the percent positive needs to be under 5% (probably close to 1%), so the US has far too many daily cases – and percent positive – to do effective test-and-trace.There were 2,279,606 test results reported over the last 24 hours.There were 243,996 positive tests.Over 46,000 US deaths have been reported so far in January. See the graph on US Daily Deaths here.Click on graph for larger image.This data is from the COVID Tracking Project.The percent positive over the last 24 hours was 10.7% (red line is

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Phoenix Real Estate in December: Sales Up 27.4% YoY, Active Inventory Down 52% YoY

8 days ago

The Arizona Regional Multiple Listing Service (ARMLS) reports ("Stats Report"):1) Overall sales were at 9,666 in December, up from 8,886 in November, and up from 7,585 in December 2019. Sales were down 8.8% from November 2020 (previous month), and up 27.4% from December 2019.2) Active inventory was at 5,969, down from 12,425 in November 2019. That is down 52% year-over-year.3) Months of supply decreased to 1.01 in December from 1.40 in November. This is very low.Sales are reported at the close of escrow, so these sales were mostly signed in October and November.

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Black Knight: Number of Homeowners in COVID-19-Related Forbearance Plans Decreased

9 days ago

Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.This data is as of January 5th.From Black Knight: Slow Improvement in Forbearance Numbers ContinuesThe number of mortgages in active forbearance declined slightly once again this week, continuing the trend of very slow improvement seen in recent weeks. Total active forbearance plans are now down 1.5% from last month. This gradual rate of improvement sets the stage for a large number of plans to still be in active status when the first wave of forbearances begins to expire at the end of March….New plans edged higher thanks to an increase in restart activity, but overall, these numbers remain below pre-holiday levels. Forbearance starts were up 10,000 from last

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Q4 GDP Forecasts

9 days ago

From Merrrill Lynch: We revise up 1Q 2021 GDP growth to 4.0% qoq saar from 1.0%, but take down 2Q to 5.0% from 7.0%, reflecting the earlier passage of stimulus in December. This leaves annual 2021 growth at 5.0% from 4.6% previously, with risks tilted to the upside if additional stimulus makes it through Washington in coming months. We continue to track 5.0% qoq saar for 4Q 2020 GDP. [Jan 15 estimate] emphasis addedFrom the NY Fed Nowcasting ReportThe New York Fed Staff Nowcast stands at 2.5% for 2020:Q4 and 6.2% for 2021:Q1. [Jan 15 estimate]And from the Altanta Fed: GDPNowThe GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2020 is 7.4 percent on January 15, down from 8.7 percent on January 8. [Jan 15 estimate]

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