The key reports this week are the second estimate of Q2 GDP, July New and Existing Home sales, and Personal Income and Outlays for July. For manufacturing, the August Richmond and Kansas City Fed surveys will be released. Fed Chair Jerome Powell will speak on "The Economic Outlook" at the Jackson Hole Symposium on Friday.

California’s housing market moderated for the third straight month in July with both home sales and prices tempering from the heated market conditions seen over the past year, while still staying above pre-pandemic levels, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 428,980 in July, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2021 if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. July home sales dipped 1.6 percent on a monthly basis from 436,020 in June and were down 2 percent from a year ago, when 437,890 homes were sold on an annualized basis. July’s sales level was the second highest...

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.

Note: Several readers have asked why their state health department data doesn't exactly match the CDC data for a given state.   Sometimes the reason is a different denominator (total population vs. 12+ for example), sometimes the reason isn't clear.  These are questions for the state health departments. This data is from the CDC.

Residential home sales decreased across the Austin-Round Rock Metropolitan Statistical Area (MSA) for the first time since May 2020, according to the Austin Board of REALTORS® July 2021 Central Texas Housing Report. Despite the dip, the five-county MSA was just 445 homes shy of breaking the all-time home sales record set in July 2020.

Note: I'm tracking data for many local markets around the U.S. I think it is especially important to watch inventory this year. The Arizona Regional Multiple Listing Service (ARMLS) reports ("Stats Report"): 1) Overall sales were at 8,715 in July, down 15.4% from 10,303 in July 2020. 2) Active inventory was at 6,746, down 15.8% from 8,010 in July 2020. 3) Months of supply decreased to 1.24 in July from 1.26 in July 2020. This is low. Inventory in July was up 15.0% from last month, and up 63% from the record low in February 2021.

Note: I'm tracking data for many local markets around the U.S. I think it is especially important to watch inventory this year. For for the entire state of Rhode Island: Closed sales (single family and condos) in July 2021 were 1,305, down 9.3% from 1,439 in July 2020. Active Listings (single family and condos) in July 2021 were 2,110, down 24.0% from 2,775 in July 2020. Inventory in July was up 6.3% from last month, and up 84.6% from the all time low in May 2021.

Note: The year-over-year occupancy comparisons are easy, since occupancy declined sharply at the onset of the pandemic.  So STR is comparing to the same week in 2019. The occupancy rate is down 8.3% compared to the same week in 2019.

The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 5.47 percent of all loans outstanding at the end of the second quarter of 2021, according to the Mortgage Bankers Association's (MBA) National Delinquency Survey. For the purposes of the survey, MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage. The delinquency rate was down 91 basis points from the first quarter of 2021 and down 275 basis points from one year ago. "Mortgage delinquencies across all loan types - conventional, FHA, and VA - reached their lowest levels since the first quarter of 2020," said Marina Walsh, CMB, MBA's Vice President of Industry Analysis. "The drop in the delinquency rate for FHA loans and VA loans was the largest quarterly decline for both in the history of MBA's survey dating back to 1979." ... Walsh added, "Much of the second-quarter...

In the week ending August 14, the advance figure for seasonally adjusted initial claims was 348,000, a decrease of 29,000 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 2,000 from 375,000 to 377,000. The 4-week moving average was 377,750, a decrease of 19,000 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 500 from 396,250 to 396,750. emphasis added

On daily deaths: Just over a month ago, the 7-day average for daily COVID deaths was around 180.  Since then, the 7-day average of daily deaths has tripled, and since deaths lag hospitalizations, it seems likely daily deaths will double again.   Be careful!

From housing economist Tom Lawler (see important comments on inventory): 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 5.86 million in July, unchanged from June’s preliminary pace and down 0.7% from last July’s seasonally adjusted pace. Unadjusted sales should show a larger YOY decline, reflecting this July’s lower business day count compared to last July. Local realtor reports, as well as reports from national inventory trackers, suggest that while the inventory of existing homes for sale remained low last month, inventories on the month increased by substantially more than the seasonal norm, and the YOY decline in July was significantly less than in June. What this means for the NAR’s inventory estimate for July, however, is unclear As I’ve noted before, the inventory measure in most...

Participants discussed aspects of the Federal Reserve's asset purchases, including progress made toward the Committee's maximum-employment and price-stability goals since the adoption of the asset purchase guidance in December 2020. They also considered the question of how asset purchases might be adjusted once economic conditions met the standards of that guidance. Participants agreed that their discussion at this meeting would be helpful background for the Committee's future decisions about modifying asset purchases. No decisions regarding future adjustments to asset purchases were made at this meeting.... In their discussion of considerations related to asset purchases, various participants noted that these purchases were an important part of the monetary policy toolkit and a critical aspect of the Federal Reserve's response to the economic effects of the pandemic, supporting smooth financial market functioning and accommodative financial conditions, which aided the flow of...

The Architecture Billings Index (ABI) recorded its sixth consecutive positive month, according to a new report today from The American Institute of Architects (AIA). The ABI score for July was 54.6. While this was down slightly from June’s score of 57.1, it still indicates very strong business conditions overall (any score above 50 indicates an increase in billings from the prior month). Scoring for new project inquiries also declined in July but remained near its all-time high at 65.0. The score for new design contracts was essentially unchanged from June to July with a score of 58.0. “In prior business cycles, architecture firms generally saw their project work soften quickly and then recover slowly,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “So the strength of this recovery is unprecedented. Firm leaders who have leaned into this economic upturn by reinvesting in their firms by hiring staff and upgrading their technology, will likely have a better year than...

In accordance with usual practice, the Bureau of Labor Statistics (BLS) is announcing the preliminary estimate of the upcoming annual benchmark revision to the establishment survey employment series. The final benchmark revision will be issued in February 2022 with the publication of the January 2022 Employment Situation news release.

Each year, the Current Employment Statistics (CES) survey employment estimates are benchmarked to comprehensive counts of employment for the month of March. These counts are derived from state unemployment insurance (UI) tax records that nearly all employers are required to file. For National CES employment series, the annual benchmark revisions over the last 10 years have averaged plus or minus one-tenth of one percent of total nonfarm employment. The preliminary estimate of the benchmark revision indicates a downward adjustment to March 2021 total nonfarm employment of -166,000 (-0.1 percent).

Preliminary benchmark revisions are...

The first graph shows the month to month comparison for total starts between 2020 (blue) and 2021 (red).  Click on graph for larger image. Starts were up 2.5% in July compared to July 2020.  The year-over-year comparison are more difficult starting in the second half of 2021. In 2020, starts were off to a strong start before the pandemic, and with low interest rates, and little competing existing home inventory, starts finished 2020 strong.  

The first graph shows the month to month comparison for total starts between 2020 (blue) and 2021 (red).  Click on graph for larger image. Starts were up 2.5% in July compared to July 2020.  The year-over-year comparison are more difficult starting in the second half of 2021. In 2020, starts were off to a strong start before the pandemic, and with low interest rates, and little competing existing home inventory, starts finished 2020 strong.  

Housing Starts: Privately?owned housing starts in July were at a seasonally adjusted annual rate of 1,534,000. This is 7.0 percent below the revised June estimate of 1,650,000, but is 2.5 percent above the July 2020 rate of 1,497,000. Single?family housing starts in July were at a rate of 1,111,000; this is 4.5 percent below the revised June figure of 1,163,000. The July rate for units in buildings with five units or more was 412,000. Building Permits: Privately?owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,635,000. This is 2.6 percent above the revised June rate of 1,594,000 and is 6.0 percent above the July 2020 rate of 1,542,000. Single?family authorizations in July were at a rate of 1,048,000; this is 1.7 percent below the revised June figure of 1,066,000. Authorizations of units in buildings with five units or more were at a rate of 532,000 in July emphasis added