CalculatedRisk Newsletter

The CalculatedRisk Newsletter focuses on in-depth analysis and updates on the real estate market, including housing sales, mortgage rates, housing inventory, credit scores, market dynamics, policy proposals, and economic implications of events like the pandemic on housing. It combines data-driven insights with forecasts and trends.

Real Estate Market Analysis Housing Sales and Inventory Mortgage Rates and Debt Economic Trends Affecting Real Estate Policy and Regulatory Changes Market Forecasts and Predictions

The hottest Substack posts of CalculatedRisk Newsletter

And their main takeaways

New Home Sales at 661,000 Annual Rate in January

43 implied HN points • 26 Feb 24
💰 Finance Real Estate Market Data Economic Trends Housing supply
  1. In January 2024, new home sales were reported at a seasonally adjusted annual rate of 661,000, showing a positive trend compared to the previous year.
  2. The median new home price has dropped by 15% from its peak, indicating potential shifts in the real estate market.
  3. Inventory levels for new homes show variations, with completed homes for sale at a level close to the norm, while homes under construction are high but below previous peak levels.

3rd Look at Local Housing Markets in January; California Home Sales Up 5.9% YoY in January

47 implied HN points • 19 Feb 24
💼 Business Housing Markets Real Estate Sales Inventory Mortgage Rates
  1. California home sales were up 5.9% year-over-year in January, marking the first year-over-year sales gain in 31 months.
  2. Active listings in California decreased year-over-year for the 10th month but new listings increased, suggesting some balance in the market.
  3. In January, closed sales in various markets were up 3.0%, showing improvement compared to the previous month, but they are down compared to January 2019 levels.

Lawler: Rent Trends at some Large Holders of Multifamily Properties

28 implied HN points • 11 Mar 24
💼 Business Real Estate Economics Finance Market Analysis Housing
  1. Rent growth has slowed sharply at large holders of multifamily properties like MAA, Equity Residential, and Avalon Bay Communities in the past year.
  2. Despite overall rent growth slowdown, year-over-year growth in rent renewals remained in the 4.5% - 5% range in January, showing a different trend.
  3. There is a lesson to be learned from the 1994-1995 Fed tightening episode where the Federal Reserve raised the policy rate significantly without triggering a recession, providing valuable insights for current monetary policymaking.

Lawler: Update on Mortgage Rates and Spreads

57 implied HN points • 05 Feb 24
  1. 2023 saw high volatility in US fixed-income and mortgage markets, but rates ended close to the beginning.
  2. Mortgage rates and MBS yields had more volatility than Treasury rates in 2023.
  3. Various factors impact the spreads between mortgage rates and 10-year Treasury rates.
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ICE Mortgage Monitor: "First-Time Homebuyers Make Up Record 47% of GSE Purchase Loans"

28 implied HN points • 04 Mar 24
💰 Finance Mortgages
  1. First-time homebuyers constituted a significant portion of GSE purchase loans in 2023, reaching a record 47%, the highest in at least a decade.
  2. Mortgage originations in 2023 hit a 30-year low, with a heavy focus on purchase transactions, while refinance lending showed potential for growth if rates decrease.
  3. In January, mortgage delinquencies dropped to 3.38%, the lowest level since October, indicating a positive trend below pre-pandemic levels.

Inflation Adjusted House Prices 2.3% Below Peak

52 implied HN points • 01 Feb 24
  1. Inflation adjusted house prices are currently 2.3% below the recent peak.
  2. Price-to-rent index is 7.0% below the recent peak.
  3. House prices are elevated based on different measures like affordability and real return.

Asking Rents Mostly Unchanged Year-over-year

43 implied HN points • 02 Feb 24
  1. Asking rents have not changed much year-over-year.
  2. Apartment rents are slightly cheaper compared to the previous year.
  3. National single-family rent growth is stable and slower than previous years.

Inventory will Tell the Tale

124 implied HN points • 08 Nov 23
💰 Finance Economic Forecasting
  1. The importance of monitoring inventory in forecasting the housing market.
  2. Changes in housing inventory have been helpful in predicting market trends.
  3. In-depth analysis of existing home sales reports from key sources.

Early Read on Existing Home Sales in November

76 implied HN points • 18 Dec 23
  1. Existing home sales in November were estimated to be at a rate of around 3.87 million, showing a slight increase from October.
  2. The National Association of Realtors is projected to report a 2.1% rise in existing home sales compared to the previous month.
  3. However, there was a 6.1% decline in existing home sales when compared to the same period last year.

Q3 Update: Delinquencies, Foreclosures and REO

81 implied HN points • 08 Dec 23
  1. Even with some increase in REOs, the housing market is not expected to face a significant impact as most homeowners have substantial equity in their homes.
  2. Homeowner equity has been on the rise, with a 6.8% year-over-year increase and a total gain of $1.1 trillion.
  3. Low mortgage rates and high equity levels mean that few homeowners are likely to experience financial challenges.

Inflation Adjusted House Prices 3.0% Below Peak

86 implied HN points • 01 Dec 23
  1. Inflation adjusted house prices are 3.0% below the recent peak.
  2. Price-to-rent ratio is 6.9% below the recent peak.
  3. Nominal house prices are at all-time highs in September.

Final Look at Local Housing Markets in December

43 implied HN points • 24 Jan 24
  1. Existing home sales hit a new cycle low in December.
  2. New listings were up year-over-year for the 3rd month in a row.
  3. Sales in December were down 8%, showing a significant decline compared to 2019.

Final Look at Local Housing Markets in January

23 implied HN points • 26 Feb 24
💰 Finance Housing Markets Real Estate Inventory Mortgage Rates
  1. The final look at local housing markets in January showed low existing home sales but an increase in new listings for the fourth month in a row.
  2. Active listings in January were up 3.0% year over year, highlighting the importance of monitoring inventory trends in the coming months.
  3. Closed sales in January saw a 3.0% increase year over year, revealing differences from sales in January 2019 and hinting at potential sales growth in February.

Inflation Adjusted House Prices 2.4% Below Peak

19 implied HN points • 05 Mar 24
💰 Finance Real Estate Inflation Affordability Indexes Housing
  1. Real house prices in the US are currently 2.4% below the recent peak, indicating a slight decline in prices adjusted for inflation.
  2. It's important to consider the price-to-rent ratio to understand the affordability of housing markets.
  3. National house prices are historically high after being 10.2% above the bubble peak level, despite the market's ups and downs over 17 years.

Part 2: Current State of the Housing Market; Overview for mid-December

66 implied HN points • 13 Dec 23
  1. The Case-Shiller National Index showed a 3.9% year-over-year increase in September.
  2. House prices are expected to show a more positive year-over-year change in October.
  3. The post offers an overview of the current state of the housing market in mid-December.

Lawler: Update on Invitation Homes Rental Trends

23 implied HN points • 20 Feb 24
💰 Finance Real Estate Investing Economy Markets Analysis
  1. Invitation Homes focused on boosting occupancy rates in Q4 for peak leasing season, taking an aggressive stance.
  2. Renewal rates for rental properties were pushed lower than expected with renewal rate increases averaging 6.8%.
  3. Despite previous claims of pricing rentals at 'market' levels, recent data suggests that renewal rates have not followed this trend for Invitation Homes.

Lawler: Update on American Homes for Rent (AMH)

19 implied HN points • 27 Feb 24
💰 Finance Real Estate Investments Inflation Earnings
  1. American Homes for Rent (AMH) saw a decline in occupancy rate last quarter, contrasting with Invitation Homes.
  2. The average monthly rents of INVH and AMH seem to lead the CPI's Rent of Primary Residence by about two quarters, and rent growth has remained above the overall inflation rate.
  3. Rental inflation remains elevated for many single-family renters despite certain limitations in the rent trend comparisons and geographic focuses of these companies.

NAR: Existing-Home Sales Increased to 3.82 million SAAR in November

57 implied HN points • 20 Dec 23
  1. Existing-home sales increased to 3.82 million SAAR in November, breaking a five-month decline
  2. Housing inventory decreased seasonally in November to 1.13 million units
  3. Year-over-year sales declined by 7.3% compared to November 2022, marking the twenty-seventh consecutive month of decline

The "Home ATM" Mostly Closed in Q3

66 implied HN points • 07 Dec 23
  1. In Q3, Mortgage Equity Withdrawal (MEW) was low
  2. Quarterly increase in mortgage debt decreased in Q3
  3. Most homeowners have large equity cushions in their homes

4th Look at Local Housing Markets in October

76 implied HN points • 20 Nov 23
  1. The National Association of Realtors is set to release October existing home sales data.
  2. Expectations are for sales of 3.93 million SAAR, with a forecast of 3.94 million SAAR by housing economist Tom Lawler.
  3. The projected sales would be a new cycle low, below 4.00 million SAAR in January 2023.

Lawler: Single-Family Rent Results

86 implied HN points • 03 Nov 23
  1. The post discusses the year-over-year changes in rent indexes for different types of rental properties.
  2. The author highlights indexes like the Apartment List Rent Index (ALRI) and the Zillow Observed Rent Index (ZORI).
  3. The table shown in the post includes data from the CoreLogic Single-Family Rent Index (CLSF) as well.

3rd Look at Local Housing Markets in October

76 implied HN points • 15 Nov 23
  1. Markets report around 4 million SAAR in October
  2. Data includes states and metropolitan areas
  3. Starting next month, there will be comparisons to 2019 data

Final Look at Local Housing Markets in October

66 implied HN points • 29 Nov 23
  1. The article provides a final look at local housing markets in October.
  2. There is an increase in new listings year-over-year in October.
  3. The author plans to include comparisons to 2019 data starting next month.