by Calculated Risk on 4/22/2024 08:08:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Essentially Flat Just Under 5 Month Highs

Mortgage rates began the new week at almost exactly the same levels seen at the end of last week. There were no major events or economic reports to cause volatility in the underlying bond market, but bonds were able to improve modestly by the end of the day.
...
By staying near Friday's levels, the average lender is just shy of the highest rates in 5 months. A top tier conventional 30yr fixed scenario is still in the mid 7% range. [30 year fixed 7.43%]
emphasis added

Tuesday:
• At 10:00 AM ET, New Home Sales for March from the Census Bureau. The consensus is for 670 thousand SAAR, up from 662 thousand in February.

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

by Calculated Risk on 4/22/2024 04:13:00 PM

From the MBA: Share of Mortgage Loans in Forbearance Remains at 0.22% in March

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance remained unchanged at 0.22% as of March 31, 2024. According to MBA’s estimate, 110,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 8.1 million borrowers since March 2020.

In March 2024, the share of Fannie Mae and Freddie Mac loans in forbearance remained at 0.12%. Ginnie Mae loans in forbearance stayed at 0.40%, and the forbearance share for portfolio loans and private-label securities (PLS) increased 2 basis points to 0.31%.

“For the past three months, the number of loans in forbearance has held steady,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The current labor market is showing resilience, minimizing the need for mortgage forbearance. However, life events and temporary hardships still happen, regardless of employment conditions, which may explain why we have reached a floor in the forbearance rate.”
emphasis added

At the end of February, there were about 110,000 homeowners in forbearance plans.

by Calculated Risk on 4/22/2024 02:58:00 PM

Altos reports that active single-family inventory was up 3.0% week-over-week. Inventory bottomed in mid-February this year, as opposed to mid-April in 2023, and inventory is now up 8.5% from the February bottom.

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of April 19th, inventory was at 543 thousand (7-day average), compared to 526 thousand the prior week.   

Inventory is still far below pre-pandemic levels. 

The second graph shows the seasonal pattern for active single-family inventory since 2015.

The red line is for 2024.  The black line is for 2019.  Note that inventory is up almost double from the record low for the same week in 2022, but still well below normal levels.

Inventory was up 30.9% compared to the same week in 2023 (last week it was up 29.6%), and down 37.2% compared to the same week in 2019 (last week it was down 38.2%). 

Back in June 2023, inventory was down almost 54% compared to 2019, so the gap to more normal inventory levels is slowly closing.

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 4/22/2024 10:52:00 AM

The TSA is providing daily travel numbers.

This data is as of April 21st.

Click on graph for larger image.

This data shows the 7-day average of daily total traveler throughput from the TSA (Blue).

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

Air travel - as a percent of 2019 - is tracking at about 105% of pre-pandemic levels.

by Calculated Risk on 4/22/2024 08:14:00 AM

This is something I check occasionally.

The Department of Transportation (DOT) reported:

• Travel on all roads and streets changed by +2.0% (+4.8 billion vehicle miles) for February 2024 as compared with February 2023. Travel for the month is estimated to be 240.2 billion vehicle miles.

• The seasonally adjusted vehicle miles traveled for February 2024 is 274.8 billion miles, a +1.4% ( +3.9 billion vehicle miles) change over February 2023. It also represents a 0.6% change (1.7 billion vehicle miles) compared with January 2024.

• Cumulative Travel for 2024 changed by +0.6% (+2.7 billion vehicle miles). The cumulative estimate for the year is 487.4 billion vehicle miles of travel.
emphasis added

Click on graph for larger image.

This graph shows the monthly total vehicle miles driven, seasonally adjusted.

Miles driven declined sharply in March 2020, and really collapsed in April 2020.  Miles driven are now at pre-pandemic levels.

by Calculated Risk on 4/21/2024 07:14:00 PM

Weekend:
• Schedule for Week of April 21, 2024

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

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 17 and DOW futures are up 100 (fair value).

Oil prices were up over the last week with WTI futures at $83.26 per barrel and Brent at $86.96 per barrel. A year ago, WTI was at $78, and Brent was at $83 - so WTI oil prices are up year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.64 per gallon. A year ago, prices were at $3.67 per gallon, so gasoline prices are down $0.03 year-over-year.

by Calculated Risk on 4/21/2024 09:40:00 AM

As of December 2023, looking at the "dot plot", most FOMC participants expected between 2 and 4 rate cuts in 2024:

As of Dec 2023 Meeting
25 bp Rate Cuts	FOMC Members
No Change	2
One Rate Cut	1
Two Rate Cuts	5
Three Rate Cuts	6
Four Rate Cuts	4
More than Four	1

As of the March 2024 meeting, FOMC participants were down to 2 to 3 rate cuts in 2024:

As of Mar 2024 Meeting
25 bp Rate Cuts	FOMC Members
No Change	2
One Rate Cut	2
Two Rate Cuts	5
Three Rate Cuts	9
Four Rate Cuts	1

Most market participants expect between 1 and 2 rate cuts this year, with the first cut in September.  Here are a couple analyst views:

From BofA:

[W]e revised our Fed forecasts in response to the upside surprise in the March inflation data. We now expect the Fed to start cutting in December rather than June, and we still think cuts will proceed at a quarterly cadence. Importantly, we did not simply push our projected cutting cycle out by two quarters. We removed the June and September 2024 cuts entirely from our forecast, raising the terminal rate by 50bp to 3.5-3.75%.

From Goldman Sachs:

The FOMC was already narrowly divided on its three-cut baseline for 2024, and we think it will now need to see the string of three firmer inflation prints from January to March balanced by a series of softer prints in subsequent months.

We continue to expect cuts at a quarterly pace after July, which now implies two cuts in 2024 in July and November.

by Calculated Risk on 4/20/2024 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• Single Family Starts Up 22% Year-over-year in March; Multi-Family Starts Down Sharply

• NAR: Existing-Home Sales Decreased to 4.19 million SAAR in March

• NMHC: "Apartment Market Continues to Loosen"

• 4th Look at Local Housing Markets in March; California Home Sales Down 4.4% YoY in March

• Lawler: Early Read on Existing Home Sales in March

• 3rd Look at Local Housing Markets in March

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

by Calculated Risk on 4/20/2024 08:11:00 AM

The key reports scheduled for this week are the advance estimate of Q1 GDP, March New Home sales and March Personal Income and Outlays.

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

----- Monday, April 22nd -----
8:30 AM ET: Chicago Fed National Activity Index for March. This is a composite index of other data.

----- Tuesday, April 23rd -----
10:00 AM: New Home Sales for March 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 670 thousand SAAR, up from 662 thousand in February.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for April.

 

----- Wednesday, April 24th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: Durable Goods Orders for March from the Census Bureau. The consensus is for a 2.0% increase in durable goods orders.

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

----- Thursday, April 25th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 210 thousand initial claims, down from 212 thousand last week.

8:30 AM: Gross Domestic Product, 1st quarter 2024 (Advance estimate). The consensus is that real GDP increased 2.1% annualized in Q1, down from 3.4% in Q4.

10:00 AM: Pending Home Sales Index for March. The consensus is for a 2.0% decrease in the index.

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

----- Friday, April 26th -----
8:30 AM ET: Personal Income and Outlays, March 2024. The consensus is for a 0.5% increase in personal income, and for a 0.3% increase in personal spending. And for the Core PCE price index to increase 0.3%.  PCE prices are expected to be up 2.6% YoY, and core PCE prices up 2.7% YoY.

10:00 AM: University of Michigan's Consumer sentiment index (Final for April). The consensus is for a reading of 77.9.

by Calculated Risk on 4/19/2024 07:11:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

It is likely that we will see pandemic lows for hospitalizations and deaths in the next several weeks.  That is welcome news!

For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly.

Hospitalizations have declined significantly from the winter high of 30,027 but are still slightly above the low of 5,386 last year.

COVID Metrics
	Now	Week Ago	Goal
Hospitalized2	5,899	6,686	≤3,0001
Deaths per Week2	779	982	≤3501
1my goals to stop weekly posts, 2Weekly for Currently Hospitalized, and Deaths 🚩 Increasing number weekly for Hospitalized and Deaths ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported.

Weekly deaths have declined sharply from the recent peak of 2,558 but are still 50% above the low of 490 last July.

And here is a graph I'm following concerning COVID in wastewater as of April 18th:

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

Nationally, COVID in wastewater is now off close to 90% from the holiday peak at the end of December, and that suggests weekly hospitalizations and deaths will continue to decline.