The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the economy will depend significantly on the course of the virus, including progress on vaccinations. The ongoing public health crisis continues to weigh on the economy, and risks to the economic outlook remain. The Committee...

In 2020, with the pandemic, inventory dropped to record lows, and prices really increased (record low mortgage rates and demographics were factors too). I don't have a crystal ball, but watching inventory helps understand the housing market. Click on graph for larger image. This graph below shows existing home months-of-supply (from the NAR) vs. the seasonally adjusted month-to-month price change in the Case-Shiller National Index (both since January 1999 through February 2021).

Mortgage applications decreased 2.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 23, 2021. ... The Refinance Index decreased 1 percent from the previous week and was 18 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 34 percent higher than the same week one year ago. “Mortgage applications decreased last week, even as mortgage rates dropped for the third week in a row. The 30-year fixed rate was down 3 basis points to 3.17 percent, which is still 32 basis points higher than the low reported in December 2020. Even with a few weeks of lower rates, most borrowers have likely already refinanced, which is why activity has decreased in seven of the last eight weeks,” said Joel Kan, MBA’s Associate Vice...

Already rising at a blistering pace, home price appreciation pressed higher in February as competition for housing remained red hot. ... As more signs emerge that the economy’s recovery is gathering steam, a wave of eager buyers – many of them seeking their first home purchase – remain determined to find their next home. But with relatively few for-sale homes on the market, bidding wars have become increasingly common, pushing sale prices higher and leading homes to sell at a record pace. In the near-term, it appears unlikely that these upward price pressures will relent meaningfully, particularly as recent retreats in mortgage rates offer many home shoppers increased buying power. However, after pausing in February, home listing activity has shown a meaningful improvement in recent weeks and some recent signs suggest that the historically tight inventory pressures may finally be starting to ease. Should those signs materialize, the meteoric rise in home prices may finally have...

Note: I'm looking forward to not posting this daily! I've been posting this data daily for over a year, and I'll stop once all three of these criteria are met: 1) 70% of the population over 18 has had at least one dose of vaccine, 2) new cases are under 5,000 per day, and 3) hospitalizations are below 3,000. According to the CDC, 232.4 million doses have been administered. 37.3% of the population over 18 is fully vaccinated, and 54.2% of the population over 18 has had at least one dose (139.9 million people over 18 have had at least one dose). And check out COVID Act Now to see how each state is doing. 

March 2021 saw the highest visitation since Feb of last year as the destination welcomed more than 2.2M visitors, up nearly 45% MoM. With travel reduced last March due to the initial shutdown, year?over?year (YoY) comparisons show a 45.7% increase while a comparison to pre?COVID 2019 monthly metrics shows visitation down roughly ?40% from March 2019. Hotel occupancy ramped up to 55.5%, up 13.5 pts MoM, as Weekend occupancy reached 77.7% (up 14.9 pts MoM) and Midweek occupancy reached 47.8% (up 15.7% MoM).

Here is the post earlier on Case-Shiller: Case-Shiller: National House Price Index increased 12.0% year-over-year in February It has been fifteen years since the bubble peak. In the Case-Shiller release today, the seasonally adjusted National Index (SA), was reported as being 31% above the previous bubble peak. However, in real terms, the National index (SA) is about 4% above the bubble peak (and historically there has been an upward slope to real house prices).  The composite 20, in real terms, is still 5% below the bubble peak. The year-over-year growth in prices increased to 12.0% nationally. Usually people graph nominal house prices, but it is also important to look at prices in real terms (inflation adjusted).  Case-Shiller and others report nominal house prices.  As an example, if a house price was $200,000 in January 2000, the price would be over $295,000 today adjusted for inflation (48%).  That is why the second graph below is important - this...

This report is frequently mentioned by analysts and the media to track household formation, the homeownership rate, and the homeowner and rental vacancy rates.  However, there are serious questions about the accuracy of this survey. This survey might show the trend, but I wouldn't rely on the absolute numbers. Analysts probably shouldn't use the HVS to estimate the excess vacant supply or household formation, or rely on the homeownership rate, except as a guide to the trend.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 12.0% annual gain in February, up from 11.2% in the previous month. The 10-City Composite annual increase came in at 11.7%, up from 10.9% in the previous month. The 20-City Composite posted an 11.9% year-over-year gain, up from 11.1% in the previous month. Phoenix, San Diego, and Seattle reported the highest year-over-year gains among the 20 cities in February. Phoenix led the way with a 17.4% year-over-year price increase, followed by San Diego with a 17.0% increase and Seattle with a 15.4% increase. Nineteen of the 20 cities reported higher price increases in the year ending February 2021 versus the year ending January 2021. ... Before seasonal adjustment, the U.S. National Index posted an 1.1% month-over-month increase, while the 10-City and 20-City Composites both posted increases of 1.1% and 1.2% respectively in February. After seasonal adjustment,...

CR Note: Back in November, housing economist Tom Lawler wrote The Dismal Demographics of 2020. Here is an update from Tom Lawler: Updated provisional data released by the CDC indicates that the US “demographics” in 2020 was even more dismal that what I indicated in my November report of last year. Provisional data through this week show that there were over 3.36 million deaths in 2020. Deaths: US deaths last year were up by 17.8% from 2019. Given reporting lags in some states the total death count for last year will be somewhat higher than that shown in the table below, these number will probably be pretty close to the total.

CR Note: A key takeaway from this excellent analysis by Tom Lawler is that annual household growth will be much lower than previously expected. From housing economist Tom Lawler: Census: New Long-Term Population Projections Show Slower Growth than Previous Projections but Are Still Too High; Projections Overstate Growth in all Age Groups Save the Very Young and the Very Old This week the Census Bureau released new projections of the US population, and to the surprise of no one reading this report the new projections show substantially slower population growth than the last set of projections, released at the end of 2014. Virtually all of the slower projected population growth stemmed from a sharp decline in projected net international migration. The new projections show average annual growth in the total US population from 2017 to 2020 (I’m only focusing on the short-term projections) of 2.355 million (compound annual growth rate (CAGR) of 0.72%), down by 271 thousand from...

Note: I'm looking forward to not posting this daily! I've been posting this data daily for over a year, and I'll stop once all three of these criteria are met: 1) 70% of the population over 18 has had at least one dose of vaccine, 2) new cases are under 5,000 per day, and 3) hospitalizations are below 3,000. According to the CDC, 230.8 million doses have been administered. 37.0% of the population over 18 is fully vaccinated, and 53.9% of the population over 18 has had at least one dose (139.2 million people over 18 have had at least one dose). And check out COVID Act Now to see how each state is doing. 

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 1 basis point from 4.50% of servicers’ portfolio volume in the prior week to 4.49% as of April 18, 2021. According to MBA’s estimate, 2.25 million homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance remained the same relative to the prior week at 2.44%. Ginnie Mae loans in forbearance decreased 7 basis points to 6.09%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 8 basis points to 8.42%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers remained the same relative to the prior week at 4.72%, and the percentage of loans in forbearance for depository servicers declined 3 basis points to 4.64%. “After two weeks of large declines, the share of loans in forbearance decreased for the eighth straight...

As part of the new home sales report released last week, the Census Bureau reported the number of homes sold by price and the average and median prices. From the Census Bureau: "The median sales price of new houses sold in March 2021 was $330,800. The average sales price was $397,800." The following graph shows the median and average new home prices. Click on graph for larger image. During the housing bust, the builders had to build smaller and less expensive homes to compete with all the distressed sales.  When housing started to recovery - with limited finished lots in recovering areas - builders moved to higher price points to maximize profits.

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 (Light Blue), 2020 (Blue) and 2021 (Red). The dashed line is the percent of 2019 for the seven day average. This data is as of April 25th. The seven day average is down 42.7% from the same day in 2019 (57.3% of 2019).  (Dashed line) There was a slow increase from the bottom, with ups and downs due to the holidays - and TSA data has picked up in 2021, but down slightly over the last few weeks.

Strong buyer demand pushed builder confidence up in April even as builders continued to grapple with rising lumber prices and supply chain issues and consumers faced higher home prices due to a lack inventory. The latest NAHB/Wells Fargo Housing Market Index (HMI) released today shows that builder confidence in the market for newly built single-family homes rose one point to 83 in April. “Despite strong buyer traffic, builders continue to face challenges to add much needed housing supply to the market,” said NAHB Chairman Chuck Fowke. “The supply chain for residential construction is tight, particularly regarding the cost and availability of lumber, appliances, and other building materials. Though builders are seeking to keep home prices affordable in a market in need of more inventory, policymakers must find ways to increase the supply of building materials as the economy runs hot in 2021.” “While mortgage interest rates have trended higher since February and home prices...

In March, total industrial production increased 1.4 percent. The gain in March followed a drop of 2.6 percent in February, which largely resulted from widespread outages related to severe winter weather in the south central region of the country. For the first quarter as a whole, total industrial production rose 2.5 percent at an annual rate. In March, manufacturing production and mining output increased 2.7 percent and 5.7 percent, respectively. The output of utilities dropped 11.4 percent, as the demand for heating fell because of a swing in temperatures from an unseasonably cold February to an unseasonably warm March. At 105.6 percent of its 2012 average, total industrial production in March was 1.0 percent higher than its year-earlier level, but it was 3.4 percent below its pre-pandemic (February 2020) level. Capacity utilization for the industrial sector increased 1.0 percentage point in March to 74.4 percent, a rate that is 5.2 percentage points below its long-run...

Advance estimates of U.S. retail and food services sales for March 2021, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $619.1 billion, an increase of 9.8 percent from the previous month, and 27.7 percent above March 2020. emphasis added

In the week ending April 10, the advance figure for seasonally adjusted initial claims was 576,000, a decrease of 193,000 from the previous week's revised level. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The previous week's level was revised up by 25,000 from 744,000 to 769,000. The 4-week moving average was 683,000, a decrease of 47,250 from the previous week's revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week's average was revised up by 6,500 from 723,750 to 730,250. emphasis added