Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-May 2024

A brief excerpt:

This 2-part overview for mid-May provides a snapshot of the current housing market.

I always like to start with inventory, since inventory usually tells the tale!
...
Here is a graph of new listing from Realtor.com’s April 2024 Monthly Housing Market Trends Report showing new listings were 12.2% year-over-year in April. This is still well below pre-pandemic levels. From Realtor.com:

However, providing a boost to overall inventory, which has been a drag on sales the past couple of years, sellers turned out in higher numbers this April as newly listed homes were 12.2% above last year’s levels, matching last month’s growth rate. This marked the sixth month of increasing listing activity after a 17-month streak of declines.

Note the seasonality for new listings. December and January are seasonally the weakest months of the year for new listings, followed by February and November. New listings will be up year-over-year in 2024, but still below normal levels.

There are always people that need to sell due to the so-called 3 D’s: Death, Divorce, and Disease. Also, in certain times, some homeowners will need to sell due to unemployment or excessive debt (neither is much of an issue right now).

And there are homeowners who want to sell for a number of reasons: upsizing (more babies), downsizing, moving for a new job, or moving to a nicer home or location (move-up buyers). It is some of the “want to sell” group that has been locked in with the golden handcuffs over the last couple of years, since it is financially difficult to move when your current mortgage rate is around 3%, and your new mortgage rate will be above 7%.

But time is a factor for this “want to sell” group, and eventually some of them will take the plunge. That is probably why we are seeing more new listings now.

There is much more in the article.

From Goldman:

We boosted our Q2 GDP tracking estimate by 0.1pp to +3.4% (qoq ar) and left our domestic final sales estimate unchanged at +2.7%. [May 7th estimate]
emphasis added

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 4.2 percent on May 8, up from 3.3 percent on May 2. After recent releases from the US Bureau of Economic Analysis, the US Census Bureau, the Institute for Supply Management, and the US Census Bureau, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth increased from 3.2 percent and 4.1 percent, respectively, to 3.9 percent and 6.8 percent, while the nowcast of the contribution of the change in real net exports to second-quarter real GDP growth decreased from -0.05 percentage points to -0.10 percentage points. [May 8th estimate]

From STR: U.S. hotel results for week ending 4 May

U.S. hotel performance showed mixed results from the previous week, according to CoStar’s latest data through 4 May. ...

28 April through 4 May 2024 (percentage change from comparable week in 2023):

• Occupancy: 64.4% (-0.8%)
• Average daily rate (ADR): US$159.97 (+1.3%)
• Revenue per available room (RevPAR): US$103.09 (+0.5%)
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.
Click on graph for larger image.

The red line is for 2024, black is 2020, blue is the median, and dashed light blue is for 2023.  Dashed purple is for 2018, the record year for hotel occupancy. 
The 4-week average of the occupancy rate is tracking last year, and slightly above the median rate for the period 2000 through 2023 (Blue).

Note: Y-axis doesn't start at zero to better show the seasonal change.
The 4-week average of the occupancy rate will move mostly sideways seasonally until the summer travel season.

From Matthew Graham at Mortgage News Daily: Mortgage Rates Technically at Lowest Levels in a Month

The most prevalently quoted conventional 30yr fixed rates are at the lowest levels in a month as of today, but there are a few "yeah buts" ... the above has played out in a very narrow range in the bigger picture. The big spike on April 10th was in a completely different league and it was exclusively a response to the Consumer Price Index (CPI). With that in mind, the next CPI will be released next Wednesday. It has just as much power to cause just as big of a move as it did last time, for better or worse. [30 year fixed 7.18%]
emphasis added

Tuesday:
• At 10:00 AM ET, University of Michigan's Consumer sentiment index (Preliminary for May).

Today, in the Calculated Risk Real Estate Newsletter: Housing Starts: Record Average Length of Time from Start to Completion in 2023

A brief excerpt:

In 2023, it took a record 8.6 months from start to completion for single family homes, up from an already elevated 8.3 months in 2022. For 2+ unit buildings, it took a record 17.1 months for buildings with 2 or more units in 2023, unchanged from 17.1 months in 2022.
...
The delays following the housing bubble were due to many projects being mothballed for several years. The recent delays were due to pandemic related supply constraints.

There is more in the article.

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For April, Realtor.com reported inventory was up 30.4% YoY, but still down almost 36% compared to April 2017 to 2019 levels. 
 Now - on a weekly basis - inventory is up 35.1% YoY.

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View—Data for Week Ending May 4, 2024

• Active inventory increased, with for-sale homes 35.1% above year-ago levels

For the 26th straight week, there were more homes listed for sale versus the prior year, giving homebuyers more options. As mortgage rates have climbed to new 2024 highs, we could see sellers adjust their plans, since nearly three-quarters of potential sellers also plan to buy a home. However, the long buildup to listing—80% have been thinking about selling for 1 to 3 years—could mean that this year’s sellers are less deterred by market fluctuations.

• New listings—a measure of sellers putting homes up for sale—were up this week, by 3.6% from one year ago

Although the number of new listings kept rising, the rate of increase slowed considerably compared with the double-digit surges seen in recent weeks. This slowdown highlighted the extent to which sellers’ sentiments are influenced by mortgage rates.

As mortgage rates breach 7% once more, numerous home sellers might be inclined to postpone their selling endeavors. Should mortgage rates persist in their ascent, they will continue to suppress listing activities.

Here is a graph of the year-over-year change in inventory according to realtor.com. 

Inventory was up year-over-year for the 26th consecutive week.  
However, inventory is still historically very low.
New listings remain below typical pre-pandemic levels although up year-over-year.

The DOL reported:

In the week ending May 4, the advance figure for seasonally adjusted initial claims was 231,000, an increase of 22,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 208,000 to 209,000. The 4-week moving average was 215,000, an increase of 4,750 from the previous week's revised average. The previous week's average was revised up by 250 from 210,000 to 210,250.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 215,000.

The previous week was revised up.

Weekly claims were much higher than the consensus forecast.