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Logan Mohtashami on how the housing market is holding up

In this HW+ Q&A, HousingWire Lead Analyst Logan Mohtashami breaks down the latest purchase application data.
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In this HW+ Slack Q&A, HousingWire Lead Analyst Logan Mohtashami gives the inside scoop on where rates are headed, his insights on the latest economic reports and more.

As a member of HW+, you get access to 30-minute Slack Q&As, where we invite the HW Media newsroom to break down the hottest topics in the industry. This Q&A was hosted in the HW+ Slack channel, which is exclusively available to members. To get access to the next Q&A on May 4th, you can join HW+ here.

The following Q&A has been lightly edited for length and clarity. This Q&A was originally hosted on April 20th.

HousingWire: The best way to start is to talk about purchase application data, can you break that down for us?

Logan Mohtashami: Yes, purchase application data has always been a useful forward looking indicator for housing, especially when we are dealing with higher mortgage rates. What have we seen this year? After making some Covid-19 adjustments to the data line, we will have our first negative year over year since 2014, unless something changes on the mortgage rate side.

4-20-Purchase-aps-

However, I would label this a mild decline so far for now:

  1. Week to week -3%
  2. Year over Year -14%
  3. 4 Week MA YoY -9.75%

In the last four weeks, the week-to-week data has had two positive and two mild negative prints. So not much action there, but the year over year 4-week moving average trend has been lower for sure. The last time we had 5% mortgage rates was in 2018. We only have three very mild negative year-over-year prints for all the hype of housing crashing back then.

MBA-2018-INK-

2014 was the last year we saw a noticeable weakness in purchase application data. The trend back then was 20% negative year over year data. When the application data gets weak or hot, it moves 20%-30% both ways.

4-20-2014-INK-

So, I would label this a mild decline in purchase application activity after making the Covid-19 adjustments. We have been mindful that the data we got with housing starts yesterday, and today’s existing home sales data is backward-looking.

HW+ Member: Do you expect 20-30% declines this year?

Logan Mohtashami: If rates stay above 5% with duration, we should have some prints this year at that level, but clearly, the trend hasn’t been that bad this year.

HousingWire: How are existing home sales trends and inventory affecting the housing market right now?

Logan Mohtashami: Existing home sales look about right to me this year; this was the pre 5% housing market. I was looking for sales to get 5,740,000 and have a few prints below that level to find our base sales. However, the 5%+ mortgage world means we have more downside activity than that.

As we can see below, when rates go higher, it does impact sales trends. At the end of 2017, we went from a 5.72 million sales trend to 4.98 million in January of 2019. Rates went lower in 2019, and sales rebounded toward the end of the year.

4-Existing-home-sales-NAR-Ink-

The main story of housing is that inventory got worse at the start of the year, and even this week, inventory levels are still showing negative year-over-year data. However, higher rates should create more days on the market, and we should be able to break the downtrend in negative year-over-year data we have seen this year.

4-EHS-monthy-supply-2.0-

If that doesn’t happen with higher rates, we are in more trouble than I thought, and this inventory crisis has been my main reason for talking about unhealthy home price growth for some time now. However, traditionally higher rates do their thing, and we are working from shallow levels in 2022.

April-Active-Listings-1

Inventory is very seasonal. It rises in the spring and summer and fades in the fall and winter. So, it’s essential to track the year-over-year data. Even if we get some positive inventory prints on a year-over-year basis, all this means is that we are still working from all-time low levels, but just a tad higher.

The goal I have had for some time is to get total inventory into a range between 1.52 million – and 1.93 million; this will make the housing much saner. Currently, based on the last NAR report, we are 950,000, so we got some work to do.

1-2022-Inventory-total-3

HousingWire: How are mortgage rates looking in comparison to earlier this year?

Logan Mohtashami: Mortgage rates, if you think about have made almost a 3% move higher from the recent lows of 2.50% that some people can get. 5.25% roughly right now; I know some can get higher or lower depending on the second pricing. However, this is the most positive housing story we have in 2022 because sub 4% mortgage and unemployment rates meant more unhealthy home price growth.

Today the NAR reported 15% median sales price growth, not a good thing folks. Home sellers and builders had too much pricing power, and as a collective whole, they were and are pushing it to the limits to make as much money as possible. higher rates have always been the stabilizing factor in this equation, and now that they’re here, they need to stick. We have seen a reversal in bond yields right now; the 10-year yield got as high as 2.98% and currently is down to 2.82.

For rates to stay at these levels, the economic data has to remain firm, not only here but worldwide. China is slowing down, and so is Europe. The U.S. economy has been solid, but we are starting to see cracks in the global inflation story. However, the Russian Invasion and the China lockdown is keeping some inflationary pressure that won’t be resolved until both those situations get closure.

The concern I have is that if those inflationary pressures fade and the economic data gets weaker, rates and bond yields fall again and whatever inventory we did see an increase gets taken off the market. This is actually might biggest concern for housing, So I know where I am is different from other people.

Have more questions for Logan? Share them in the comment section below. We will work to address them here or in the next Slack Q&A session.

The post Logan Mohtashami on how the housing market is holding up appeared first on HousingWire.

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Maternal mortality jumped during COVID-19 pandemic

The COVID-19 pandemic and its impacts have taken a disproportionate toll on American mothers who were pregnant or just gave birth. Maternal mortality (i.e.,…

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The COVID-19 pandemic and its impacts have taken a disproportionate toll on American mothers who were pregnant or just gave birth. Maternal mortality (i.e., deaths during pregnancy or in the early postpartum period) increased by 18% in 2020, according to data from the National Center for Health Statistics, exceeding the ~16% increase in overall US mortality in 2020. Yet according to a new analysis from the University of Maryland and Boston University, the maternal death rate after the start of the COVID-19 pandemic was even higher, and disproportionately impacted Black and non-white Hispanic mothers. 

Credit: Marie E. Thoma, PhD; Eugene R. Declercq, PhD in JAMA Network Open

The COVID-19 pandemic and its impacts have taken a disproportionate toll on American mothers who were pregnant or just gave birth. Maternal mortality (i.e., deaths during pregnancy or in the early postpartum period) increased by 18% in 2020, according to data from the National Center for Health Statistics, exceeding the ~16% increase in overall US mortality in 2020. Yet according to a new analysis from the University of Maryland and Boston University, the maternal death rate after the start of the COVID-19 pandemic was even higher, and disproportionately impacted Black and non-white Hispanic mothers. 

A research letter published in JAMA Network Open by Marie Thoma in the UMD School of Public Health and Eugene Declercq in the BU School of Public Health compared maternal mortality data from 2018-March 2020, when the pandemic began, to April-December 2020. Overall, they found large increases in maternal death (33%) and late maternal deaths (41%) after March 2020 compared with before the pandemic, and conspicuous increases among Black and Hispanic mothers. 

“The increase was really driven by deaths after the start of the pandemic, which are higher than what we see for overall excess mortality in 2020,” said Dr. Thoma, assistant professor of family science in the UMD SPH. The study also showed that existing and new disparities emerged after the pandemic with a 40% jump among already high rates for non-Hispanic Black women and a 74% jump among formerly lower rates in Hispanic women.  

Strikingly, said Dr. Declercq, professor of community health sciences at BUSPH, “for the first time in more than a decade, the maternal mortality rate for Hispanic women during the pandemic was higher than that for non-Hispanic white women, a shift that may be related to COVID and deserves greater attention moving forward.”  

COVID-19 was listed as a secondary cause of death in 14.9% of maternal deaths in the last nine months of 2020, with it being a contributing factor for 32% of Hispanic, 12.9% of Black and 7% of non-Hispanic white women giving birth.

In their analysis of causes of maternal death, they found the largest increases were due to conditions directly related to COVID-19 (respiratory or viral infection) and conditions made worse by COVID-19 infection, such as diabetes or cardiovascular disease. However, interruptions to the health care system could have led to delayed prenatal care that could have meant that risk factors for pregnancy complications went undetected. 

“We need more detailed data on the specific causes of maternal deaths overall and those associated with COVID-19,” Dr. Thoma said. “Potentially we could see improvements in 2021 due to the rollout of vaccines, as well as the extension of postpartum care provided for Medicaid recipients as part of the American Rescue Act of 2021 in some states. We’re going to continue to examine this.”


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U.S. FDA will decide on redesigned COVID vaccines by early July

U.S. regulators plan to decide by early July on whether to change the design of COVID-19 vaccines this fall in order to combat more recent variants of…

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U.S. FDA will decide on redesigned COVID vaccines by early July

By Michael Erman

“The better the match of the vaccines to the circulating strain we believe may correspond to improve vaccine effectiveness, and potentially to a better durability of protection,” Dr. Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, said at a meeting of outside advisers to the regulator.

Vials with Pfizer-BioNTech and Moderna coronavirus disease (COVID-19) vaccine labels are seen in this illustration picture taken March 19, 2021. REUTERS/Dado Ruvic/Illustration

The committee is scheduled to vote on a recommendation on whether to make the change later on Tuesday.

The updated shots are likely to be redesigned to fight the Omicron variant of the coronavirus, experts say. read more The exact composition of the retooled shots and whether they also will include some of the original vaccine alongside new components will be considered at the meeting.

Pfizer Inc (PFE.N), Moderna Inc (MRNA.O) and Novavax Inc. (NVAX.O) are scheduled to present data at the meeting. All three companies have been testing versions of their vaccines updated to combat the BA.1 Omicron variant that was circulating and led to a massive surge in infections last winter.

Both Moderna and Pfizer with partner BioNTech (22UAy.DE) have said that their respective redesigned vaccines generate a better immune response against BA.1 than their current shots that were designed for the original virus that emerged from China.

They have said that their new vaccines also appear to work against the more recently circulating BA.4 and BA.5 Omicron subvariants, even though that protection is not as strong as against BA.1.

Experts also want to know if the new shots will boost protection against severe disease and death for younger, healthier people or merely offer a few months’ additional safeguard against mild infection.

Scientists who have questioned the value of booster shots for young and healthy people have said a broad campaign is not needed with an updated shot either.

Other experts have championed any additional protection new vaccines may offer.

Reporting by Michael Erman Editing by Bill Berkrot and Bernadette Baum

Our Standards: The Thomson Reuters Trust Principles.

Source: Reuters

 

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Stock Market Today: Dow Jones, S&P 500 Edge Higher; Trip.com Stock Surges From China Covid Easing

Markets opened in the green today as they rebound from Monday’s losses.
The post Stock Market Today: Dow Jones, S&P 500 Edge Higher; Trip.com Stock…

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Stock Market Today Mid-Morning Updates

On Tuesday, the Dow Jones Industrial Average is up by 270 points as it followed modest losses on Wall Street. Investors are still weighing the risks of red-hot inflation as rates continue to rise. Aside from the U.S., European Central Bank Leader Christine Lagarde downplayed recession concerns in the eurozone, already being destabilized by Russia’s war on Ukraine. She also says that her team is ready to raise rates at a faster pace if needed, in order to combat inflation.

Shares of Morgan Stanley (NYSE: MS), Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), and Goldman Sachs (NYSE: GS) raised their dividends after passing their annual stress tests. For instance, Goldman Sachs is boosting its dividend payout by 25% to $2.50 per share. On the other hand, shares of Las Vegas Sands (NYSE: LVS) and Wynn Resorts (NASDAQ: WYNN) are up today after China announced that it will be easing Covid-19 quarantine rules for international arrivals.

Among the Dow Jones leaders, shares of Apple (NASDAQ: AAPL) are up by 0.13% today while Microsoft (NASDAQ: MSFT) is down by 0.79%. Meanwhile, Disney (NYSE: DIS) and Nike (NYSE: NKE) are trading mixed on Tuesday. Among the Dow financial leaders, Visa (NYSE: V) is up by 0.17% while JPMorgan Chase (NYSE: JPM) is also up by 1.67%

Shares of EV leader Tesla (NASDAQ: TSLA) are up by 0.83% on Tuesday. Rival EV companies like Rivian (NASDAQ: RIVN) are down by 0.17%. Lucid Group (NASDAQ: LCID) is down by 1.09% today as well. However, Chinese EV leaders like Nio (NYSE: NIO) and Xpeng Motors (NYSE: XPEV) are trading mixed today. 

Dow Jones Today: U.S. Treasury Yields Inches Higher; House Price Increases Slows Down In April 

Following the stock market opening on Tuesday, the S&P 500, Dow, and Nasdaq are trading higher at 0.68%, 0.89%, and 0.31% respectively. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (NASDAQ: QQQ) is up by 0.28% while the SPDR S&P 500 ETF (NYSEARCA: SPY) is also up by 0.67%. 

The benchmark 10-year U.S. Treasury yield currently hovers around 3.22% as the market continues to push against a bear market. Oil prices rallied for the third day today as major producers like Saudi Arabia looked unlikely to be able to boost output significantly. This comes as the West agreed to explore ways to cap the price of Russian oil. Brent crude, for instance, currently trades at around $116 per barrel.

Home prices increased slower than before in April and could be a potential sign of a cooling in prices. Diving in, prices rose by 20.4% nationally in April compared with a year earlier. This is according to the S&P CoreLogic Case-Shiller Index. For comparison, home prices increased by 20.6% year-over-year in March. Cities like Tampa, Miami, and Phoenix continue to lead the pack with the strongest price gains. Tampa home prices, for instance, are up by a whopping 35.8% year-over-year.

[Read More] Top Stock Market News For Today June 28, 2022 

Trip.com Stock Gains Following Better-Than-Expected Quarterly Performance On Travel Rebound; China Covid Easing

Trip.com Group (NASDAQ: TCOM) seems to be among the top gainers in the stock market now. Evidently, TCOM stock is now up by over 14% at the opening bell today. Overall, this likely stems from the company’s latest financial update. Getting straight into it, Trip.com reported a quarterly loss per share of $0.01. Furthermore, the company’s total quarterly revenue is $649 million. For reference, consensus figures on Wall Street are a loss per share of $0.08 on revenue of $575.04 million. With these commendable results, investors looking to bet on the return of travel would be considering TCOM stock.

According to Trip.com, the company has recovering travel demand in global markets to thank for its latest quarterly performance. In particular, Trip.com highlights a bump in activity from consumers across its Europe and Asia Pacific user bases. This, the company believes, is a result of easing travel restrictions amidst countries in these regions. Moreover, Trip.com also notes that staycation-related travel in China is another notable contributor to growth for the quarter. Accordingly, its local hotel bookings are now up by 20% year-over-year.

On the whole, travel firms like Trip.com continue to thrive as consumers book their vacations. For its latest quarter, the company’s air-ticket bookings on global platforms are now up by a whopping 270% year-over-year. As mentioned earlier, this is mainly led by a rebound in demand from its European and Asian Pacific operations. Looking forward, CEO Jane sun notes that Trip.com will “remain adaptive to embrace the changing environment and be flexible with our strategies to swiftly seize growth opportunities.” With all this in mind, I could understand if TCOM stock is turning some heads in the stock market today.

TCOM stock
Source: TradingView

[Read More] Best Oil Stocks To Buy Right Now? 5 For Your Late June 2022 Watchlist 

Occidental Petroleum On The Rise Following Latest Berkshire Hathaway Stake Increase

Meanwhile, the likes of Occidental Petroleum (NYSE: OXY) seem to be gaining attention in the stock market now. For the most part, this is likely a result of the latest regulatory filing from Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A). Namely, Berkshire disclosed a purchase of an additional 794,000 shares of Occidental. This adds up to a $44 million transaction, bringing its total stake to about 16.4%. In total, Berkshire currently holds about 153.5 million shares of OXY stock, worth $9 billion.

All in all, Buffett’s focus on Occidental would likely draw attention to the energy firm’s shares. This is apparent as OXY stock is currently gaining by over 6% in the stock market now. According to Berkshire’s filings since March, the company’s average purchase price per share of OXY stock is $53. Following this investment, Berkshire would be bolstering its position as Occidental’s largest stakeholder. In second place on this front is investment firm Vanguard with an almost 11% stake. As a result of all this, it would not surprise me to see OXY stock making the rounds in the stock market now.

OXY stock
Source: TradingView

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The post Stock Market Today: Dow Jones, S&P 500 Edge Higher; Trip.com Stock Surges From China Covid Easing appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

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