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From Matthew Graham at Mortgage News Daily: Mortgage Rates Stay Flat Despite Underlying Market Volatility We know that mortgage rates are driven by financial markets and we know that financial markets have experienced volatility amid the roll-out of new tariffs over the weekend. But rates are starting the current week right in line with Friday's latest levels (themselves, little-changed from any other day last week). [30 year fixed 7.05%] emphasis added Job Openings and Labor Turnover Survey for December from the BLS.
Wards Auto released their estimate of light vehicle sales for January: U.S. Light-Vehicle Sales Start 2025 With 4% Increase in January (pay site). There did not appear to be an end-of-month boost in demand, either as a rebound from the mid-month weather-related losses or pull-ahead volume in case of still-possible future tariff-related price increases. However, January’s gain marked the fourth straight year-over-year increase in volume and fifth consecutive for the seasonally adjusted annual rate. Click on graph for larger image. Sales in January (15.60 million SAAR) were down 7.1% from December, and up 3.8% from January 2024. Sales in January were at the consensus forecast. The second graph shows light vehicle sales since the BEA started keeping data in 1967. This was the best January since 2021.
From the Federal Reserve: The January 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices The January 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the fourth quarter of 2024. tighter lending standards for commercial and industrial (C&I) loans to firms of all sizes. Meanwhile, banks reported stronger demand for C&I loans to large and middle-market firms, while demand for C&I loans to small firms remained basically unchanged. Furthermore, banks generally reported tighter standards and basically unchanged demand for commercial real estate (CRE) loans. unchanged lending standards and weaker demand across most categories of residential real estate (RRE) loans. In addition, standards reportedly tightened for credit card loans and remained basically unchanged for auto and other consumer loans, while demand weakened for credit card and other consumer loans but remained basically unchanged for auto loans. Further, banks reported basically unchanged lending standards and demand for home equity lines of credit (HELOCs). emphasis added Click on graph for larger image. Senior Loan Officer Survey Charts. This graph is for demand and shows that demand has been weak since late 2021. The left graph is from 1990 to 2014. The right graph is from 2015 to Q4 2024.
From the Census Bureau reported that overall construction spending increased: Construction spending during December 2024 was estimated at a seasonally adjusted annual rate of $2,192.2 billion, 0.5 percent above the revised November estimate of $2,180.3 billion. The December figure is 4.3 percent above the December 2023 estimate of $2,101.3 billion. emphasis added Private spending increased and public spending decreased: Click on graph for larger image. Private non-residential (blue) spending is at a new peak. The second graph shows the year-over-year change in construction spending. private residential construction spending is up 6.0%. Private non-residential spending is up 2.3% year-over-year. Public spending is up 4.3% year-over-year. This was above consensus expectations and spending for the previous two months was revised up.
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Altos reports that active single-family inventory was down 0.3% week-over-week. Inventory always declines seasonally in the Winter and usually bottoms in late January or February. Inventory is now up 1.7% from the bottom three weeks ago. If three weeks ago was the seasonal bottom, that would be very early in the year, but that has happened before. The first graph shows the seasonal pattern for active single-family inventory since 2015. Click on graph for larger image. The red line is for 2024. The black line is for 2019. Inventory was up 27.7% compared to the same week in 2024 (last week it was up 26.5%), and down 22.2% compared to the same week in 2019 (last week it was down 23.0%). Back in June 2023, inventory was down almost 54% compared to 2019, so the gap to more normal inventory levels has closed significantly! This second inventory graph is courtesy of Altos Research. As of Jan 31st, inventory was at 635 thousand (7-day average), compared to 637 thousand the prior week. Mike Simonsen discusses this data regularly on Youtube
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From the Census Bureau reported that overall construction spending increased: Construction spending during December 2024 was estimated at a seasonally adjusted annual rate of $2,192.2 billion, 0.5 percent above the revised November estimate of $2,180.3 billion. The December figure is 4.3 percent above the December 2023 estimate of $2,101.3 billion. emphasis added Private spending increased and public spending decreased: Click on graph for larger image. Private non-residential (blue) spending is at a new peak. The second graph shows the year-over-year change in construction spending. private residential construction spending is up 6.0%. Private non-residential spending is up 2.3% year-over-year. Public spending is up 4.3% year-over-year. This was above consensus expectations and spending for the previous two months was revised up.
From STR: U.S. hotel results for week ending 25 January As expected with the MLK Day holiday, the U.S. hotel industry reported mixed year-over-year comparisons, according to CoStar’s latest data through 25 January. ... 119-25 January 2025 (percentage change from comparable week in 2024): Occupancy: 54.3% (-3.4%) 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 4-week average of the occupancy rate is tracking both last year and the median rate for the period 2000 through 2024 (Blue). Note: Y-axis doesn't start at zero to better show the seasonal change. This is the weakest period of the year for hotel occupancy and the 4-week average will increase seasonally for the next few months.
