Connect with us

Uncategorized

Housing Market Tracker: Inventory falls even lower

Active housing inventory fell 5,383 last week and new listing data is still trending at all-time lows in 2023.

Published

11 months ago

on

The seasonal housing inventory bottom evaded us again last week as active listings fell and new listing inventory decreased. Purchase application data rose again, with more positive than negative data in 2023. Mortgage rates didn’t move much last week, but the 10-year yield rose even though inflation data was tamer than expected, and we had a weaker retail sales report number.

Here’s a quick rundown of the last week:

  • Active inventory fell 5,383 last week, and new listing data is still trending at all-time lows in 2023.
  • Mortgage rates didn’t move too much last week but ended the week on a higher note at 6.50%.
  • Purchase application data was up 8% weekly, and the year-over-year decline was the lowest since September 2022. 

Weekly housing inventory

Looking at the Altos Research data from last week, the big question is: Have we seen the seasonal bottom in Inventory? The answer is no! 

In fact we just made history as the seasonal inventory bottom has now broken new ground regarding how late it is in the year. I talked about this in February on the HousingWire Daily podcast, talking about why inventory is bottoming out later in the last few years. For those who might have missed that podcast, my working theory on this has to do with the purchase application data, with total active listing being at all-time lows.

  • Weekly inventory change (April 7-14): Inventory fell from 410,851 to 405,468
  • Same week last year (April 8-April 15): Inventory rose from 258,264 to 267,459
  • The bottom for 2022 was 240,194

Now is there an Easter impact on housing inventory data? I am always skeptical of housing data around any national holiday, so let’s see what happens next week with inventory. Since the second half of 2022, after mortgage rates reached 6.25%, new listing data has been in a constant year-over-year decline and hasn’t recovered.

This is one reason housing inventory has taken so long to bottom out. Mortgage rate volatility was so wild in the second half of 2022 and even this year that some home sellers are gun-shy in listing their homes, since they will be buying another one. That’s understandable: who wants to list their home and have mortgage rates jump 1%-2% during that process?


Here are some weekly numbers to see the difference in new listings from past years over the same week. One thing to notice is that the new listing data in 2022 was higher than in 2021. This isn’t the case, of course, this year, but if there is one data line I hope surpasses 2022 levels, it is new listing data. 

  • 2021: 66,836
  • 2022: 67,567
  • 2023: 49,045

Compare our current new listing data to weekly new listing data in previous years when we had a more normal housing market:

  • 2015: 94,470
  • 2016: 86,608
  • 2017: 78,886

The NAR data going back decades shows how difficult it’s been to get back to anything normal on the active listing side. In 2007, when sales were down big, total active listings peaked at over 4 million. Today, even though sales are trending at 2007 levels, we are at 980,000 total active listings, per the last existing home sales. We are getting the next existing home sales report this week; just remember this inventory data is considerably lagging and also includes homes that are pending.



People often ask me why there is such a difference between the NAR data versus the Altos Research inventory data. This link explains the difference and is worth a read.

The 10-year yield and mortgage rates

Last week, mortgage rates didn’t move much; even with the two inflation reports and weaker retail sales data, rates ended up pretty much flat.

In my 2023 forecast, I said that if the economy stays firm, the 10-year yield range should be between 3.21% and 4.25%, equating to 5.75% to 7.25% mortgage rates. If the economy gets weaker and we see a noticeable rise in jobless claims, the 10-year yield should go as low as 2.73%, translating to 5.25% mortgage rates.

As you can see in the chart below, we have stayed in the firm economic 10-year yield range 100% of the time. We can also see how hard it’s been for the 10-year yield to break below the 3.37%-3.42% area with any conviction.

The labor market, while getting somewhat softer recently, hasn’t broken this year, so even with all the drama we’ve seen in 2023, the bond market channel has held within its proper channel, meaning mortgage rates should stay in the range between 5.75%-7.25%.



The banking crisis is an entirely new variable this year as short-term rates, such as the 2-year yield, have simply collapsed, assuming the Federal Reserve is going to have to cut rates faster that it wants. Even though the market stress has decreased lately, the assumption is that credit will only get tighter as the year grows. The Fed believes the banks getting tighter with their lending is like having three to four rate hikes, which means the economy will feel this stress and the Fed has to do less work. 

The Fed will welcome credit getting tighter as this means their forecasted recession might finally happen. In the most recent Fed minutes, they have even used the R-word, saying it might happen later this year due to credit getting tighter.

I am keeping an eye on jobless claims because I believe the Fed will pivot their language on the economy once jobless claims get above 323,000 on the four-week moving average. However, we are still far from those levels, even though it has been rising recently. Last week initial jobless claims increased by 11,000, and the four-week moving average also rose to 240,000.

Purchase application data

Purchase application data has been one of the most improved housing market data lines since Nov. 9, 2022. This is one big factor for why total housing inventory hasn’t found a bottom yet, as demand has stabilized from its waterfall dive in 2022. This also explains why the most recent existing home sales report had one of the most significant month-to-month sales prints ever. Given that rise, we should expect a month-to-month decline on the next one.

We have had three consecutive rising pending home sales reports as well.

Purchase application data rose 8% weekly in the last report, which means five out of the last six weekly prints are positive, and we are getting closer to the seasonal end of this data line. I traditionally put the most weight on this index between the last two weeks of January through the first week of May. After May, volumes traditionally fall.

Year over year, purchase applications declined 31%, the lowest since September 2022. However, context is critical for the rest of the year. Because the year-over-year comps will get easier as the year moves on, especially in the second half of the year, we need to focus on the weekly data more. This wouldn’t be an issue in regular times, but post COVID-19, we have extreme year-over-year data that needs context.

However, with that said, 2023 year-to-date data has had eight positive prints versus five negative prints, so the data has stabilized in 2023. This is much different than the V-shaped recovery we saw during COVID-19. 

The week ahead has tons of housing data

This week will be full of housing data. We have the S&P CoreLogic Case-Shiller home price index, which is lagging compared to the current data that Altos Research shows, the FHFA house price index, the builder’s confidence report, housing starts and existing home sales.

The housing recession is ongoing because housing permits haven’t been rising; we will get fresh data on this topic this week. One thing I will be keeping an eye on is whether we see more housing completion growth, because the best way to deal with rental inflation is getting more and more of those apartments up.

With rental inflation already cooling off in real time and more apartments coming online, that is the best 1-2 punch to push CPI inflation lower over the next year, as I discuss here.


The housing market tracker is designed to give an outlook for the future, and as I have written, the housing market dynamics changed starting Nov. 9. However, when mortgage rates rise to 7% and more, we have seen the weekly data get hit, impacting the sales data going out.

However, housing data has generally stabilized and we still haven’t found the seasonal bottom in inventory. New listings have been trending at all-time lows, which is what the tracker data has been telling us for some time now. 

Read More

Related Topics:
Continue Reading

Uncategorized

February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

Published

2 days ago

on

March 9, 2024

By

By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

Read More

Continue Reading

Uncategorized

Mortgage rates fall as labor market normalizes

Jobless claims show an expanding economy. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

Published

2 days ago

on

March 8, 2024

By

Everyone was waiting to see if this week’s jobs report would send mortgage rates higher, which is what happened last month. Instead, the 10-year yield had a muted response after the headline number beat estimates, but we have negative job revisions from previous months. The Federal Reserve’s fear of wage growth spiraling out of control hasn’t materialized for over two years now and the unemployment rate ticked up to 3.9%. For now, we can say the labor market isn’t tight anymore, but it’s also not breaking.

The key labor data line in this expansion is the weekly jobless claims report. Jobless claims show an expanding economy that has not lost jobs yet. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

From the Fed: In the week ended March 2, initial claims for unemployment insurance benefits were flat, at 217,000. The four-week moving average declined slightly by 750, to 212,250


Below is an explanation of how we got here with the labor market, which all started during COVID-19.

1. I wrote the COVID-19 recovery model on April 7, 2020, and retired it on Dec. 9, 2020. By that time, the upfront recovery phase was done, and I needed to model out when we would get the jobs lost back.

2. Early in the labor market recovery, when we saw weaker job reports, I doubled and tripled down on my assertion that job openings would get to 10 million in this recovery. Job openings rose as high as to 12 million and are currently over 9 million. Even with the massive miss on a job report in May 2021, I didn’t waver.

Currently, the jobs openings, quit percentage and hires data are below pre-COVID-19 levels, which means the labor market isn’t as tight as it once was, and this is why the employment cost index has been slowing data to move along the quits percentage.  

2-US_Job_Quits_Rate-1-2

3. I wrote that we should get back all the jobs lost to COVID-19 by September of 2022. At the time this would be a speedy labor market recovery, and it happened on schedule, too

Total employment data

4. This is the key one for right now: If COVID-19 hadn’t happened, we would have between 157 million and 159 million jobs today, which would have been in line with the job growth rate in February 2020. Today, we are at 157,808,000. This is important because job growth should be cooling down now. We are more in line with where the labor market should be when averaging 140K-165K monthly. So for now, the fact that we aren’t trending between 140K-165K means we still have a bit more recovery kick left before we get down to those levels. 




From BLS: Total nonfarm payroll employment rose by 275,000 in February, and the unemployment rate increased to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing.

Here are the jobs that were created and lost in the previous month:

IMG_5092

In this jobs report, the unemployment rate for education levels looks like this:

  • Less than a high school diploma: 6.1%
  • High school graduate and no college: 4.2%
  • Some college or associate degree: 3.1%
  • Bachelor’s degree or higher: 2.2%
IMG_5093_320f22

Today’s report has continued the trend of the labor data beating my expectations, only because I am looking for the jobs data to slow down to a level of 140K-165K, which hasn’t happened yet. I wouldn’t categorize the labor market as being tight anymore because of the quits ratio and the hires data in the job openings report. This also shows itself in the employment cost index as well. These are key data lines for the Fed and the reason we are going to see three rate cuts this year.

Read More

Continue Reading

Uncategorized

Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January…

Published

2 days ago

on

March 8, 2024

By

Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January jobs report was the "most ridiculous in recent history" but, boy, were we wrong because this morning the Biden department of goalseeked propaganda (aka BLS) published the February jobs report, and holy crap was that something else. Even Goebbels would blush. 

What happened? Let's take a closer look.

On the surface, it was (almost) another blockbuster jobs report, certainly one which nobody expected, or rather just one bank out of 76 expected. Starting at the top, the BLS reported that in February the US unexpectedly added 275K jobs, with just one research analyst (from Dai-Ichi Research) expecting a higher number.

Some context: after last month's record 4-sigma beat, today's print was "only" 3 sigma higher than estimates. Needless to say, two multiple sigma beats in a row used to only happen in the USSR... and now in the US, apparently.

Before we go any further, a quick note on what last month we said was "the most ridiculous jobs report in recent history": it appears the BLS read our comments and decided to stop beclowing itself. It did that by slashing last month's ridiculous print by over a third, and revising what was originally reported as a massive 353K beat to just 229K,  a 124K revision, which was the biggest one-month negative revision in two years!

Of course, that does not mean that this month's jobs print won't be revised lower: it will be, and not just that month but every other month until the November election because that's the only tool left in the Biden admin's box: pretend the economic and jobs are strong, then revise them sharply lower the next month, something we pointed out first last summer and which has not failed to disappoint once.

To be fair, not every aspect of the jobs report was stellar (after all, the BLS had to give it some vague credibility). Take the unemployment rate, after flatlining between 3.4% and 3.8% for two years - and thus denying expectations from Sahm's Rule that a recession may have already started - in February the unemployment rate unexpectedly jumped to 3.9%, the highest since February 2022 (with Black unemployment spiking by 0.3% to 5.6%, an indicator which the Biden admin will quickly slam as widespread economic racism or something).

And then there were average hourly earnings, which after surging 0.6% MoM in January (since revised to 0.5%) and spooking markets that wage growth is so hot, the Fed will have no choice but to delay cuts, in February the number tumbled to just 0.1%, the lowest in two years...

... for one simple reason: last month's average wage surge had nothing to do with actual wages, and everything to do with the BLS estimate of hours worked (which is the denominator in the average wage calculation) which last month tumbled to just 34.1 (we were led to believe) the lowest since the covid pandemic...

... but has since been revised higher while the February print rose even more, to 34.3, hence why the latest average wage data was once again a product not of wages going up, but of how long Americans worked in any weekly period, in this case higher from 34.1 to 34.3, an increase which has a major impact on the average calculation.

While the above data points were examples of some latent weakness in the latest report, perhaps meant to give it a sheen of veracity, it was everything else in the report that was a problem starting with the BLS's latest choice of seasonal adjustments (after last month's wholesale revision), which have gone from merely laughable to full clownshow, as the following comparison between the monthly change in BLS and ADP payrolls shows. The trend is clear: the Biden admin numbers are now clearly rising even as the impartial ADP (which directly logs employment numbers at the company level and is far more accurate), shows an accelerating slowdown.

But it's more than just the Biden admin hanging its "success" on seasonal adjustments: when one digs deeper inside the jobs report, all sorts of ugly things emerge... such as the growing unprecedented divergence between the Establishment (payrolls) survey and much more accurate Household (actual employment) survey. To wit, while in January the BLS claims 275K payrolls were added, the Household survey found that the number of actually employed workers dropped for the third straight month (and 4 in the past 5), this time by 184K (from 161.152K to 160.968K).

This means that while the Payrolls series hits new all time highs every month since December 2020 (when according to the BLS the US had its last month of payrolls losses), the level of Employment has not budged in the past year. Worse, as shown in the chart below, such a gaping divergence has opened between the two series in the past 4 years, that the number of Employed workers would need to soar by 9 million (!) to catch up to what Payrolls claims is the employment situation.

There's more: shifting from a quantitative to a qualitative assessment, reveals just how ugly the composition of "new jobs" has been. Consider this: the BLS reports that in February 2024, the US had 132.9 million full-time jobs and 27.9 million part-time jobs. Well, that's great... until you look back one year and find that in February 2023 the US had 133.2 million full-time jobs, or more than it does one year later! And yes, all the job growth since then has been in part-time jobs, which have increased by 921K since February 2023 (from 27.020 million to 27.941 million).

Here is a summary of the labor composition in the past year: all the new jobs have been part-time jobs!

But wait there's even more, because now that the primary season is over and we enter the heart of election season and political talking points will be thrown around left and right, especially in the context of the immigration crisis created intentionally by the Biden administration which is hoping to import millions of new Democratic voters (maybe the US can hold the presidential election in Honduras or Guatemala, after all it is their citizens that will be illegally casting the key votes in November), what we find is that in February, the number of native-born workers tumbled again, sliding by a massive 560K to just 129.807 million. Add to this the December data, and we get a near-record 2.4 million plunge in native-born workers in just the past 3 months (only the covid crash was worse)!

The offset? A record 1.2 million foreign-born (read immigrants, both legal and illegal but mostly illegal) workers added in February!

Said otherwise, not only has all job creation in the past 6 years has been exclusively for foreign-born workers...

Source: St Louis Fed FRED Native Born and Foreign Born

... but there has been zero job-creation for native born workers since June 2018!

This is a huge issue - especially at a time of an illegal alien flood at the southwest border...

... and is about to become a huge political scandal, because once the inevitable recession finally hits, there will be millions of furious unemployed Americans demanding a more accurate explanation for what happened - i.e., the illegal immigration floodgates that were opened by the Biden admin.

Which is also why Biden's handlers will do everything in their power to insure there is no official recession before November... and why after the election is over, all economic hell will finally break loose. Until then, however, expect the jobs numbers to get even more ridiculous.

Tyler Durden Fri, 03/08/2024 - 13:30

Read More

Continue Reading

Trending