Calculated Risk

MBA Survey: "Share of Mortgage Loans in Forbearance Increases Slightly to 5.38%"

Note: This is as of January 17th.

From the MBA: Share of Mortgage Loans in Forbearance Increases Slightly to 5.38%
The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance increased slightly from 5.37% of servicers’ portfolio volume in the prior week to 5.38% as of January 17, 2021. According to MBA’s estimate, 2.7 million homeowners are in forbearance plans.
...
The small increase in the share of loans in forbearance was led by a gain in the portfolio/PLS loan segment. The good news is that the forbearance numbers for GSE loans continues to decline more consistently, as these borrowers typically have stronger credit and more stable employment,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “The rate of exits from forbearance slowed in the prior week, while the rate of new forbearance requests remained steady at a low level.”

Fratantoni added, “The latest housing market data show strong momentum entering 2021, with both the pace of home sales and new construction booming. We expect that this strong market could benefit homeowners who need to sell their home, as record-low inventory is causing for-sale homes to go under contract quickly and is pushing up home prices.”
emphasis added
MBA Forbearance Survey Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.  Most of the increase was in late March and early April, and has generally been trending down.

The MBA notes: "Weekly forbearance requests as a percent of servicing portfolio volume (#) remained flat relative to the previous two weeks at 0.07 percent."

Record Low Mortgage Rates; Loans Taking 2 Months to Close

From Jann Swanson at MortgageNewsDaily: Loans Still Taking 2 Months to Close as Refi Demand Stays Strong
The interest rates on 30-year fixed rate mortgages originated in December reached an all-time low in ICE Mortgage Technology's (formerly Ellie Mae's) records, an average of 2.93 percent and a 4-basis point decline from the November rate. ... The time to close all loans increased to 58 days from 55 days in November with purchase loans, at 56 days compared to 49 days, accounting for all the increase. The refinance timeline remained at 59 days. [Today's Most Prevalent Rates For Top Tier Scenarios 30YR FIXED - 2.78%]
Mortgage Rates Click on graph for larger image.

This graph from Mortgage News Daily shows mortgage rates since January 2011.

Mortgage rates are essentially at record lows.

This graph is interactive, and you could view mortgage rates back to the mid-1980s - click here for interactive graph.

Housing Inventory Weekly Update: At Record Lows

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.

Lumcber PricesClick on graph for larger image in graph gallery.

This inventory graph is courtesy of Altos Research.
As of January 22nd, inventory is at 380 thousand (7 day average), compared to 736 thousand the same week a year ago.  That is a decline of 48%.
A week ago, inventory was at 389 thousand, and seasonally inventory should bottom soon.

Mike Simonsen discusses this data regularly on Youtube.

Dallas Fed: "Texas Manufacturing Expansion Moderates" in January

From the Dallas Fed: Texas Manufacturing Expansion Moderates
Texas factory activity continued to expand in January, albeit at a markedly slower pace, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 26.8 to 4.6, indicating a sharp deceleration in output growth.

Other measures of manufacturing activity also point to more muted growth this month. The new orders index dropped 13 points to 6.3, and the growth rate of orders index fell from 15.9 to 5.9. The capacity utilization index declined 10 points to 9.2, and the shipments index fell from 23.4 to 13.5.

Perceptions of broader business conditions continued to improve in January. The general business activity index remained positive but edged down from 10.5 to 7.0. The company outlook index also stayed in positive territory but retreated, from 18.2 to 10.3. Uncertainty regarding companies’ outlooks continued to rise; the index increased six points to 19.3.

Labor market measures indicated slightly slower growth in employment and a continued increase in work hours. The employment index came in at 16.6, down from 20.9 but still indicative of increased head counts.
emphasis added

Seven High Frequency Indicators for the Economy

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.

TSA Traveler Data 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 24th.

The seven day average is down 64.5% from last year (35.5% of last year).  (Dashed line)

There was a slow increase from the bottom, with ups and downs due to the holidays - but TSA data has mostly moved sideways.

----- 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.

Move Box OfficeThanks to OpenTable for providing this restaurant data:

This data is updated through January 23, 2021.

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."

Note that this data is for "only the restaurants that have chosen to reopen in a given market". Since some restaurants have not reopened, the actual year-over-year decline is worse than shown.

Dining picked up during the holidays.  Note that dining is generally lower in the northern states - Illinois, Pennsylvania, and New York. Note that California dining is off sharply with the orders to close.

----- Movie Tickets: Box Office Mojo -----
Move Box OfficeThis data shows domestic box office for each week (red) and the maximum and minimum for the years 2016 through 2019.  Blue is 2020 and Red is 2021.  
The data is from BoxOfficeMojo through January 21st.

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

Movie ticket sales were at $12 million last week (compared to usually around $200 million per week at this time of year).

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

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 - before 2020).

This data is through January 16th. Hotel occupancy is currently down 31.8% year-over-year. Seasonally we'd expect that business travel would start to pick up in the new year, but there will probably not be much pickup early in 2021.

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

----- Gasoline Supplied: Energy Information Administration -----
gasoline ConsumptionThis graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019.

Blue is for 2020. At one point, gasoline supplied was off almost 50% YoY. Red is for 2021.

As of January 15th, gasoline supplied was off about 8.5% (about 91.5% of the same week in 2019).

Note: People driving instead of flying might have boosted gasoline consumption.

----- 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.

There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index. However the index is set "relative to its weekday-specific average over January–February", and is not seasonally adjusted, so we can't tell if an increase in mobility is due to recovery or just the normal increase in the Spring and Summer.

Apple Mobility DataThis data is through January 24th 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 47% of the January 2020 level. It is at 35% in Chicago, and 53% in Houston - and mostly moving sideways.

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

New York City Subway UsageThis graph is from Todd W Schneider. This is daily data since early 2020.

This data is through Friday, January 22nd.

Schneider has graphs for each borough, and links to all the data sources.

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

Sunday Night Futures

Weekend:
Schedule for Week of January 24, 2021

FOMC Preview

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

• At 10:30 AM, Dallas Fed Survey of Manufacturing Activity for January.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 6 and DOW futures are up 60 (fair value).

Oil prices were unchanged over the last week with WTI futures at $52.28 per barrel and Brent at $55.36 barrel. A year ago, WTI was at $54, and Brent was at $59 - so WTI oil prices are down about 5% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.39 per gallon. A year ago prices were at $2.54 per gallon, so gasoline prices are down $0.15 per gallon year-over-year.

January 24 COVID-19 Test Results and Vaccinations

Note: Bloomberg has great data on vaccinations.
"Vaccinations in the U.S. began Dec. 14 with health-care workers, and so far 22.4 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 1.16 million 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, 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 1,700,000 test results reported over the last 24 hours.

There were 143,000 positive tests.

Over 73,000 US deaths have been reported so far in January. See the graph on US Daily Deaths here.

COVID-19 Tests per Day and Percent PositiveClick on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 8.4% (red line is 7 day average).  The percent positive is calculated by dividing positive results by total tests (including pending).

And check out COVID Act Now to see how each state is doing. (updated link to new site)

COVID-19 Positive Tests per DayThe second graph shows the 7 day average of positive tests reported and daily hospitalizations.

It is possible cases and hospitalizations have peaked, but are declining from a very high level.   

FOMC Preview

Expectations are there will be no change to rate policy when the FOMC meets on Tuesday and Wednesday this week.

Here are some comments from Goldman Sachs economists:
"The January FOMC meeting should be fairly quiet. While the pace of economic recovery has faltered in recent months due to virus resurgence, nearly all Fed officials have said that the medium-term outlook remains bright. We expect the statement to acknowledge the negative growth news and worsening public health situation but to stop short of suggesting any downgrade to the medium-term outlook. ...Our best guess remains that the Fed begins tapering in 2022 ..."
emphasis added
No projections will be released at this meeting.  However, for review, here are the December FOMC projections.

Note that GDP decreased at a 5.0% annual rate in Q1, decreased at a 31.4% annual rate in Q2, and increased at 33.1% annual rate in Q3. Consensus forecasts are for GDP to increase around a 4.3% annual rate in Q4 (to be released this coming Thursday).  This forecast would put the economy down around 2.4% Q4-over-Q4.   Close to the bottom of the December projections.
Some early forecasts for 2021 are for GDP to increase 5% or more in 2021.  For example, Merrill Lynch noted on Friday: 
"The economic outlook for the US is brightening. Our latest work on the consumer gives us another reason to call for upside risk to our already-above consensus GDP forecast of 5% in 2021. Tack on another targeted stimulus package of around $1tn, US growth could easily exceed 6% this year."
But there also downside risk for 2021. For example, if there are vaccine resistant mutations to the virus, or it takes longer than expected to achieve "herd immunity". The pandemic is still a huge unknown.

GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1Projection Date2020202120222023Dec 2020-2.5 to -2.23.7 to 5.03.0 to 3.52.2 to 2.7 1 Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.

The unemployment rate was at 6.7% in December. This will put the unemployment rate in the middle of the range of the December projections for Q4.   
Note that the unemployment rate doesn't remotely capture the economic damage to the labor market.  Not only are there 10.7 million people unemployed, and 4.1 million people have left the labor force since January.  And millions more are being supported by various provisions of the CARES Act - that still hasn't been renewed and is schedule to expire on December 26th.

My sense is the FOMC was optimistic on the unemployment rate for 2021.  Hopefully I'm wrong.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2Projection Date2020202120222023Dec 20206.7 to 6.84.7 to 5.43.8 to 4.63.5 to 4.32 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of November 2020, PCE inflation was up 1.1% from November 2019.    

Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1Projection Date2020202120222023Dec 20201.21.7 to 1.91.8 to 2.01.9 to 2.1
PCE core inflation was up 1.4% in November year-over-year. 

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1 Projection Date2020202120222023Dec 20201.41.7 to 1.81.8 to 2.01.9 to 2.1
My guess is core PCE inflation (year-over-year) will increase in 2021 (from the current 1.4%), but I think too much inflation will NOT be a concern in 2021. Since we saw negative MoM PCE and core PCE reading in March and April, we should ignore a jump in YoY inflation in March, April and May!

January 23 COVID-19 Test Results and Vaccinations

Note: Bloomberg has great data on vaccinations.
"Vaccinations in the U.S. began Dec. 14 with health-care workers, and so far 21.1 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 1.06 million 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, 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 1,898,062 test results reported over the last 24 hours.

There were 173,729 positive tests.

Over 71,000 US deaths have been reported so far in January. See the graph on US Daily Deaths here.

COVID-19 Tests per Day and Percent PositiveClick on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 9.1% (red line is 7 day average).  The percent positive is calculated by dividing positive results by total tests (including pending).

And check out COVID Act Now to see how each state is doing. (updated link to new site)

COVID-19 Positive Tests per DayThe second graph shows the 7 day average of positive tests reported and daily hospitalizations.

It is possible cases and hospitalizations have peaked, but are still at a very high level.   

Schedule for Week of January 24, 2021

The key reports scheduled for this week are the advance estimate of Q4 GDP and December New Home sales.  Other key indicators include December Personal Income and Outlays and November Case-Shiller house prices.

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

The FOMC meets this week, and no change to policy is expected at this meeting.

----- Monday, Jan 25th -----
8:30 AM ET: Chicago Fed National Activity Index for December. This is a composite index of other data.

10:30 AM: Dallas Fed Survey of Manufacturing Activity for January.

----- Tuesday, Jan 26th -----
9:00 AM: FHFA House Price Index for November. This was originally a GSE only repeat sales, however there is also an expanded index.

Case-Shiller House Prices Indices9:00 AM ET: S&P/Case-Shiller House Price Index for November.

This graph shows the Year over year change in the nominal seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the most recent report (the Composite 20 was started in January 2000).

The consensus is for a 8.1% year-over-year increase in the Comp 20 index.

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

10:00 AM: State Employment and Unemployment (Monthly) for December 2020

----- Wednesday, Jan 27th -----
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 December. The consensus is for a 0.9% increase in durable goods.

2:00 PM: FOMC Meeting Announcement. No change to policy is expected at this meeting.

2:30 PM: Fed Chair Jerome Powell holds a press briefing following the FOMC announcement.

----- Thursday, Jan 28th -----
8:30 AM: Gross Domestic Product, 4th quarter 2020 (Advance estimate). The consensus is that real GDP increased 4.3% annualized in Q4.

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for an decrease to 880 thousand from 900 thousand last week.

New Home Sales10:00 AM: New Home Sales for December 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 860 thousand SAAR, up from 841 thousand in November.

11:00 AM: the Kansas City Fed manufacturing survey for January. This is the last of regional manufacturing surveys for January.

----- Friday, Jan 29th -----
8:30 AM ET: Personal Income and Outlays for December. The consensus is for a 0.1% increase in personal income, and for a 0.4% decrease in personal spending. And for the Core PCE price index to increase 0.1%.

9:45 AM: Chicago Purchasing Managers Index for January. The consensus is for a reading of 48.5, up from 48.2 in December.

10:00 AM: Pending Home Sales Index for December. The consensus is for a 0.6% decrease in the index.

10:00 AM: University of Michigan's Consumer sentiment index (Final for January). The consensus is for a reading of 79.2.

January 22 COVID-19 Test Results and Vaccinations

Note: Bloomberg has great data on vaccinations.
"Vaccinations in the U.S. began Dec. 14 with health-care workers, and so far 19.8 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 982,739 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, 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 1,988,756 test results reported over the last 24 hours.

There were 188,983 positive tests.

Almost 68,000 US deaths have been reported so far in January. See the graph on US Daily Deaths here.

COVID-19 Tests per Day and Percent PositiveClick on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 9.5% (red line is 7 day average).  The percent positive is calculated by dividing positive results by total tests (including pending).

And check out COVID Act Now to see how each state is doing. (updated link to new site)

COVID-19 Positive Tests per DayThe second graph shows the 7 day average of positive tests reported and daily hospitalizations.

It is possible cases and hospitalizations have peaked, but are still at a very high level.   

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

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 19th.

From Black Knight: Active Forbearance Plans Increase Slightly as Imporvement Continues to Plateau
The trend of mid-month increases in active forbearance plans we’ve been reporting on for some time continues in 2021, with the population of homeowners in such plans rising by 17,000 this week.

According to the latest weekly snapshot of our McDash Flash daily mortgage performance data, 2.74 million homeowners were in active forbearance as of January 19. The population has been vacillating between 2.71 and 2.83 million since early November, when the country began seeing new coronavirus case spikes and resulting shutdowns.
...
Black Knight ForbearanceClick on graph for larger image.

Removal rates have also slowed noticeably following the six-month point of forbearance plans. This suggests that those borrowers who remain in forbearance were likely more heavily impacted by the economic downturn and thus are less likely to leave such plans before the full allowable 12-month period runs down.
...
Though we are a far cry from the peaks we saw last summer as far as the total number of active forbearance plans, the rate of improvement continues to be relatively slow. We’re seeing fewer new plan starts, with that number holding steady at the three-week average and down 30 percent from the same week in December. At the same time, plan removals remain weak, with this week recording the second lowest weekly removal volume observed to date since we began monitoring the situation in April.
emphasis added

Comments on December Existing Home Sales

Earlier: NAR: Existing-Home Sales Increased to 6.76 million in December

A few key points:

1) This was the highest sales rate for December since 2004, and the 2nd highest sales for December on record. Some of the increase over the last several months was probably related to pent up demand from the shutdowns in March and April.  Other reasons include record low mortgage rates, a move away from multi-family rentals, strong second home buying (to escape the high-density cities) and favorable demographics.
The delay in the buying season has pushed the seasonally adjusted number to very high levels.  For example, this number of sales, Not Seasonally Adjusted (NSA) in July, would have given a 5.3 million Seasonally Adjusted Annual Rate (SAAR), as opposed to 6.76 million SAAR.   So the delay in the buying season is a factor in the headline number being so high.

There are going to be some difficult comparisons in the second half of next year!
2) Inventory is very low, and was down 23% year-over-year (YoY) in December. This is the lowest level of inventory for December since at least the early 1990s.  Months-of-supply is at a record low.  Inventory will be important to watch in 2021, see: Some thoughts on Housing Inventory
3) As usual, housing economist Tom Lawler's forecast was closer to the NAR report than the Consensus.

Existing Home Sales YoYClick on graph for larger image.

This graph shows existing home sales by month for 2019 and 2020.

Note that existing home sales picked up somewhat in the second half of 2019 as interest rates declined.

Even with weak sales in April, May, and June, annual sales in 2020 were at 5,640,000, up 5.6% from 5,340,000 in 2019. This was the highest annual sales rate since 2006 (6,477,000).

Existing Home Sales NSAThe second graph shows existing home sales Not Seasonally Adjusted (NSA) by month (Red dashes are 2020), and the minimum and maximum for 2005 through 2019.

Sales NSA in December (537,000) were 23.7% above sales last year in December (434,000). This was the highest sales for December (NSA) since 2004.

Q4 GDP Forecasts

The BEA will release the preliminary estimate for Q4 GDP this coming Thursday, January 28th. The consensus estimate is for a 4.3% annualized increase in GDP.

From Merrrill Lynch:
We expect the first estimate of 4Q GDP growth to come in at a robust 4.5% qoq saar, supported by continued strength in residential and equipment investment. Consumption likely slowed but remained positive. [Jan 22 estimate] emphasis added
From Goldman Sachs:
We left our Q4 GDP tracking estimate unchanged at +4.0% (qoq ar). [Jan 21 estimate]
From the NY Fed Nowcasting Report
The New York Fed Staff Nowcast stands at 2.6% for 2020:Q4 and 6.6% for 2021:Q1. [Jan 22 estimate]
And from the Altanta Fed: GDPNow
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2020 is 7.5 percent on January 21, up from 7.4 percent on January 15. [Jan 21 estimate]

NAR: Existing-Home Sales Increased to 6.76 million in December

From the NAR: Existing-Home Sales Rise 0.7% in December, Annual Sales See Highest Level Since 2006
Existing-home sales rose in December, with home sales in 2020 reaching their highest level since 2006, according to the National Association of Realtors®. Activity in the major regions was mixed on a month-over-month basis, but each of the four areas recorded double-digit year-over-year growth in December.

Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.7% from November to a seasonally-adjusted annual rate of 6.76 million in December. Sales in total rose year-over-year, up 22.2% from a year ago (5.53 million in December 2019).
...
Total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from one year ago (1.39 million). Unsold inventory sits at an all-time low 1.9-month supply at the current sales pace, down from 2.3 months in November and down from the 3.0-month figure recorded in December 2019. NAR first began tracking the single-family home supply in 1982.
emphasis added
Existing Home SalesClick on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in December (6.76 million SAAR) were up 0.7% from last month, and were 22.2% above the December 2019 sales rate.

The second graph shows nationwide inventory for existing homes.

Existing Home InventoryAccording to the NAR, inventory decreased to 1.07 million in December from 1.28 million in December.   Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Year-over-year Inventory Inventory was down 23% year-over-year in December compared to December 2019.

Months of supply decreased to 1.9 months in December (an all time low).

This was above the consensus forecast. I'll have more later.

Black Knight: National Mortgage Delinquency Rate Decreased in December

Note: Loans in forbearance are counted as delinquent in this survey, but those loans are not reported as delinquent to the credit bureaus.

From Black Knight: Black Knight’s First Look: 2020 Ends With 1.7 Million More Seriously Delinquent Homeowners Than at Start of Year; Foreclosures at Record Low
• The year ended with 1.54 million more delinquent and 1.7 million more seriously delinquent mortgages than at the start of 2020, a looming reminder of the challenges facing the market in 2021

• Despite the year-over-year increase, the national delinquency rate saw modest improvement in December, falling by 3.9% from November to 6.08%, the lowest level since April 2020

• Serious delinquencies (loans 90 or more days past due) also improved, falling to 2.15 million from 2.19 million the month prior

• Even after months of improvement, 90-day default activity rose by more than 250% (+2.6 million) overall in 2020

• Foreclosure starts fell by 67% from the year prior and the year’s 40,000 foreclosure sales (completions) represented an annual decline of more than 70%

Starts and sales have hit record lows as moratoriums and forbearance plans protect distressed homeowners from facing foreclosure in the wake of the pandemic

• Prepayment activity rose by 12% percent in December, ending the year 112% higher than the same month in 2019 and highlighting a still-strong refinance market entering 2021
emphasis added
According to Black Knight's First Look report, the percent of loans delinquent decreased 3.9% in December compared to November, and increased 79% year-over-year.

The percent of loans in the foreclosure process increased 1.3% in December and were down 28% over the last year.

Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 6.08% in December, down from 6.33% in November.
The percent of loans in the foreclosure process increased slightly in December to 0.33%, from 0.33% in November.

The number of delinquent properties, but not in foreclosure, is up 1,448,000 properties year-over-year, and the number of properties in the foreclosure process is down 67,000 properties year-over-year.

Black Knight: Percent Loans Delinquent and in Foreclosure Process  Dec 
2020Nov
2020Dec
2019Dec
2018Delinquent6.08%6.33%3.40%3.88%In Foreclosure0.33%0.33%0.46%0.52%Number of properties:Number of properties
that are delinquent,
but not in foreclosure:3,251,0003,381,0001,803,0002,013,000Number of properties
in foreclosure
pre-sale inventory:178,000176,000245,000271,000Total Properties3,429,0003,557,0002,047,0002,283,000

January 21 COVID-19 Test Results and Vaccinations

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, 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 1,919,138 test results reported over the last 24 hours.

There were 184,864 positive tests.

Almost 64,000 US deaths have been reported so far in January. See the graph on US Daily Deaths here.

COVID-19 Tests per Day and Percent PositiveClick on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 9.6% (red line is 7 day average).  The percent positive is calculated by dividing positive results by total tests (including pending).

And check out COVID Act Now to see how each state is doing. (updated link to new site)

COVID-19 Positive Tests per DayThe second graph shows the 7 day average of positive tests reported and daily hospitalizations.

It is possible cases and hospitalizations have peaked, but are still at a very high level.   

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

From CoStar: US Hotel Occupancy Exceeds 40% During Week of Jan. 16
U.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 added
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Hotel Occupancy RateClick 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 travel would start to pick up in the new year, but there will probably not be much pickup early in 2021.

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

Comments on December Housing Starts

Earlier: Housing Starts increased to 1.669 Million Annual Rate in December

Total 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 (blue) and 2020 (red). A key point: Housing starts averaged 1.590 million SAAR in the three months prior to the pandemic. That is about the same as the last three months. 2020 was off to a strong start before the pandemic, and with low interest rates and little competing existing home inventory, starts finished the year strong.

Starts Housing 2019 and 2020Click on graph for larger image.

Starts were up 5.2% in December compared to December 2019.

In 2019, starts picked up at the end of the year - and were strong in early 2020 - so the comparisons for the next couple of months will be difficult - and then the comparisons will be easy in March, April and May.  Don't be surprised if starts are down year-over-year sometime over the next two months.

Starts were up 7.0%  in 2020 from 2019. This is close to my forecast for 2020, although I didn't expect a pandemic!

I expect starts to remain solid, but the growth rate will slow.

Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).

These graphs use a 12 month rolling total for NSA starts and completions.

Multifamily Starts and completionsThe blue line is for multifamily starts and the red line is for multifamily completions.

The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession - then mostly moved sideways.  Completions (red line) had lagged behind - then completions caught up with starts- then starts picked up a little again late last year, but have fallen off with the pandemic.

Single family Starts and completionsThe last graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions.

Single family starts are getting back to more normal levels, and  I expect some further increases in single family starts and completions on a rolling 12 month basis.

Pages