Housing

The economy and the housing market

Last week the U.S. Commerce Department reported the advance estimate for annual economic growth for 2020. For the full year, US gross domestic product contracted 3.5 percentage points, the largest annual decline since the 11.6 percentage point contraction in 1946. The similarities pretty much end there. In 1946 the US economy was demobilizing after finishing the fight against fascism. Factories were shuttered that had been producing munitions, fighter planes, tanks and liberty ships, while the G.

New Research Paper Inequality During the COVID-19 Pandemic The Case of Savings from Mortgage Refinancing

For several months now, I’ve been working on a new research paper with Sumit Agarwal, Souphala Chomsisengphet, Hua Kiefer, and Paolina Medina studying refinance activity this year. When we started the project back in the spring we were not sure that the pandemic would allow households to refinance at rates similar to prior periods. It seemed possible that the pandemic would disrupt the mortgage market and make it difficult for households to take advantage of historically low rates.

October 2020 US housing and mortgage market outlook

We are entering the homestretch for 2020, with just about two months left. It has been an intense year, with many twists and turns. Given all the uncertainty many people have been asking me to share my perspective on the outlook for US housing and mortgage markets. I’ve given many talks, in this article I’m laying out the basic view that forms the core of my recent presentations. The COVID-19 pandemic and the associated recession are of course the dominant drivers of the outlook.

Housing makes up for a lost spring

Every week I track a lot of data. One useful source is the Mortgage Bankers Association Weekly Applications Survey. This survey provides a timely, high frequency (weekly) reading on the U.S. mortgage market. Most weeks I make a bunch of charts related to the release, often posting them on Twitter: Here's how I've been interpreting the hot recent housing market data. Still a lot of catch up from a lost spring.

The US economy in lockdown

The past week we started to get monthly economic data from March, after the U.S. economy shut down to battle the COVID-19 pandemic. The results were sobering. We already knew the US labor market was in a tough spot. But last week we got data for housing starts and retail sales which showed the size of the economic contraction. Below are some charts I posted to Twitter last week.

Updated Favorite Data Visualizations

I’ve decided to create a post where I can regularly update some favorite data visualizations. Where I’ve previously discussed the data or shared code I will provide a link. Often I’ll update the charts and post them on Twitter soon after the data is released. I won’t be updating these that quickly, but I’ll do my best to keep up. As I update some more charts I may add to the list.

Shady housing market chart

I shared a chart recently on Twitter that got some attention: static version pic.twitter.com/vtD54nXGio — 📈 Len Kiefer 📊 (@lenkiefer) November 14, 2019 But not just any attention (though I do appreciate all your likes and retweets). This was special. Robert Allison [at]RobertAllison__ at SAS replicated the chart with SAS software and wrote a blog about it. These mortgage rates look shady to me. I worked on a lot of SAS stuff early in my days working at Freddie Mac, and Robert’s SAS graph examples were a resource I often used.

Lower Mortgage Rates Bolster the Housing Market

Mortgage interest rates have moved about a percentage point lower from where they were a year ago. The housing market seems to have responded favorably. On my way into D.C. the other day to do some business, I joined a Twitter exchange originally between [at]Graykimbrough and Adam Ozimek, [at]ModeledBehavior about the effects of Federal Reserve interest policy on the housing market. Seems unlikely housing market was slowed by trade war.

Housing usually heats up in summer

I have been exploring some visualizations for housing seasonality. In recent days I’ve tried out various ways of using tile plots to display seasonal patterns in home sales and other related data. In this post I want to share some of the R code I used to wrangle data and generate those plots. You can see some for example, in this thread (and others): though outside there's blistering heat

Me and the bears

On intrinsic irreducible uncertainty of economic outcomes (forecasting is hard) Here’s a picture of me and some bears. Don’t worry, I didn’t get hurt. Those bears couldn’t hurt anybody. First, because they are behind some glass. And second, because they are stuffed. There are a lot of stuffed bears out there. They’ve grown aggressive lately. Maybe because they haven’t eaten much. This current economic expansion is over 10 years old now.

Charting the housing expansion with R

Last week I posted a long thread comparing trends in various housing market indicators over on Twitter: Assuming we aren't in recession right now, the current expansion will tie the 1990s expansion for longest in U.S. history. Let's take a look at how housing markets have behaved in this expansion relative to earlier ones a thread... pic.twitter.com/ovaiq3lsA8 — 📈 Len Kiefer 📊 (@lenkiefer) June 12, 2019 I followed it up with an article on LinkedIn with some more commentary The U.

Presentation: The dynamics of house prices and foreclosure rates across space and time

Updated May 28, 2019 I’m giving a seminar about my new working paper “What Happens in Vegas Doesn’t Always Stay in Vegas”“. The slides for the talk are posted below. I made the slides with R and the xaringan package. You can easily print the html to pdf with Chrome. The pdf version is below and available at this link. Long seminar slides .html or [.pdf](../../../../img/charts_may_22_2019/what happens in vegas preso long.

What Happens in Vegas Doesn't Always Stay in Vegas

I’ve got a new working paper with Hua Kiefer (FDIC) and Diana Wei (OCC) that studies the dynamics of house prices and foreclosure rates across space and time. We estimate a model using a panel of state/quarters where nearby states influence one another. Link to paper (pdf): What Happens in Vegas Doesn’t Always Stay in Vegas Note Updated May 17, 2019 I’m giving a talk on this paper at the American Real Estate and Urban Economics National Conference later this month.

Population Growth and House Prices 2010 to 2018

Recently the U.S. Census Bureau released updated population estimates through 2018 for the United States, states, counties, and metropolitan statistical areas (MSA). Press release I tweeted out the following chart comparing house prices and state population dynamics. demographics are an important driver of #housing market trends. here's a comparison of growth in state population and nominal house prices since the year 2000 left to right: more people bottom to top: higher home prices pic.

Is the U.S. housing recovery over? Housing fluctuations across time and frequencies

The current economic expansion is set to enter its tenth year this summer. Assuming we make it to June, this will become the longest U.S. economic expansion in recorded history stretching back to the 19th century. But how is the housing market doing? After a decade of recovery housing market activity still has room for improvement, but trends in 2018 were negative. Home sales, housing construction and house price growth all declined in 2018.

Housing construction and population growth

Earlier this month I attended the National Association for Business Economics (NABE) annual policy conference in Washington D.C. LINK. One of the keynote speeches was by Alan Greenspan. During his remarks, Greenspan mentioned that while economic forecasting was hard demographic projections were the surest thing in an uncertain business. Demographics of course are not easy, but it’s much easier to guess what the population of 30 years olds will be in 5 years than it is the predict the unemployment rate or GDP in 5 years.

Mortgage rates and housing construction

The U.S. housing market stalled out a bit in 2018 and we aren’t building enough homes to match demand. See my recent speech for details on what’s going on. Abbreviated version: in 2018 mortgage interest rates slowed housing activity, but demographic forces support housing demand and should provide a lift in years to come. Together with a recent moderation in mortgage rates there’s reason to be optimistic about housing market activity in 2019.

Vulnerable Housing

My recent economic and housing market talks see for example here have been titled: “Will the U.S. housing market get back on track in 2019?”. My general conclusion has been cautiously optimistic. There is enough strength in the broader economy and enough of a tailwind from demographic forces to push the U.S. housing market to modest growth next year. I still think that’s true, but as I have said in my talks, risks are weighted to the downside.

Housing Starts Stall

U.S. housing markets have slowed down in 2018. Housing construction, which is still running well below both historical averages and what the U.S. currently needs to meet rising demand has stalled out this year. The current level of housing construction is close to the level we’ve seen in recession periods. And the historical comparison stretching back decades is comparing a nation with significantly fewer households. Total U.S. households for example, in 1970 were about 1/2 (63 million) of what they were in 2017 (126 million) FRED chart.

Housing market dataviz: week of November 22, 2017

IT IS THANKSGIVING WEEK HERE IN THE UNITED STATES. I’m getting ready to go out for a nice casual drive down Interstate I-95. Should be fun. After I get back stuffed with turkey and whatnot, we’ll get back to data visualizations and analysis. But let me leave you a couple animated gifs showing recent housing and mortgage market trends. Mortgage rate trends First, let’s just look at a line plot of trends in the 30-year fixed mortgage rate:

Tour of U.S. metro area house price trends

HEY! HERE IS A VIDEO SHOWING HOUSE PRICE TRENDS around the United States. Earlier this year we looked at how to get the data and plot it using R. I made the video using the PowerPoint to .mp4 workflow I outlined here. Below I’ll review how to build this file. Get data We are going to use house price data from the publicly available Freddie Mac House Price Index.

Recent trends in U.S. housing markets: 2017Q3 update

LET US REVIEW HOUSING MARKET TRENDS in the United States through the first three quarters of 2017. Economic background The overall economic environment remains favorable for housing. Interest rates are low, the labor market has been solid and income growth, while modest, has begun to tick up. Low mortgage rates For most of 2017 mortgage rates have declined. Rates entered the year above 4 percent for the 30-year fixed rate mortgage, but after peaking in March, declined through September.

Home sales in expansions and recessions

LET’S LOOK AT NEW HOME SALES. Today the U.S. Census Bureau joint with the Department of Housing and Urban Development (HUD) released new home sales estimates through September of 2017. New home sales have been grinding higher along with housing starts, though they dipped last month (maybe). This month’s report was the strongest since 2007, as I tweeted earlier today: New home sales in September highest since 2007. report: https://t.

Time to animate with tibbletime

IN THIS POST I WANT TO SHARE SOME CODE TO CREATE AN ANIMATED CHART of housing starts. Per usual we’ll use R and we’ll also use the tibbletime package. Running the code below will generate: (see this post for more on animations with the R package tweenr) ##################################################################################### ## Load libraries ## ##################################################################################### library(tidyquant) library(tibbletime) library(tweenr) ##################################################################################### ## Get housing starts data ## ##################################################################################### df <- tq_get("HOUST1F",get="economic.data",from="1959-01-01") ##################################################################################### ## function for rolling windows ## ##################################################################################### mys <- function(win=12){ rolling_mean <- rollify(mean, window = win) #function creates rolling average based on win df %>%mutate(dy=rolling_mean(price), w=as.

What time is it? Time for tibbletime!

WHAT TIME IS IT? TIME FOR TIBBLETIME! In this post, I’m going to take the tibbletime package out for a spin. Turns out this package is quite useful for things I tend to do. We’ll use the tibbletime package to write some R code to extend our ongoing analysis of trends in the U.S. mortgage market (see here for example). Davis Vaughan (on Twitter) one of the authors of the tibbletime package suggested I take a look:

Analyzing mortgage data with R

TIME FOR ANOTHER DATA WRANGLING AND VISUALIZATION EXTRAVAGANZA. This time we are going to work hard to turn some big data into little data. That is, we’re going to work hard to aggregate several million loan level records into useful summary graphics to tell us about the U.S. mortgage market in 2016. I’ve been working on a lot of different ways to visualize trends in the mortgage market (see here and here for examples).

Arizona housing market trends

I AM HEADED OUT TO ARIZONA to talk with mortgage professionals. I wanted to share some charts I’ve put together for the Arizona and Phoenix metro economy. These charts were put together using R and tidyquant as I described here. I am working on applying tidy data principles to constructing presentation slides, something I’m calling “tidy PowerPoint”. Preparing these charts, or ones like them, would fall under that workflow. Hopefully I’ll be able to tell you about them more later.

Mortgage origination trends

IT IS SEPTEMBER AND THAT MEANS it is data release season. One of the most important September data releases for me is the annual HMDA data release. These data provide the closest thing to a publicly-available comprehensive summary of U.S. mortgage market activity that we’ll get (for right now). The recently released data is for 2016 and provides a detailed view of mortgage market activity across the country. Let’s take a look.

New home sales fall (maybe)

NEW HOME SALES FALL according to the latest new residential sales report from the U.S. Census Bureau and Department of Housing and Urban Development (HUD). errr probably. Remember, housing data is uncertain and there’s quite a large margin of error. Per the Census/HUD report sales fell 3.4 percent, but with a confidence interval of plus or minus 13 percent. Here’s a chart with the line showing the estimate and the shaded area the confidence interval around that estimate.

Charting housing starts with R

IN THIS POST I WANT TO SHARE SOME R CODE to create charts of U.S. housing starts we studied last week. Get data We’ll use tidyquant (see e.g. this post for more) to go get our data from the St. Louis Federal Reserve Economic Database (FRED). We’ll also use cowplot to arrange multiple ggplot2 graphs on one page. Let’s load libraries and grab the data. ##################################################################################### ## Step 0: Load Libraries ## ##################################################################################### library(tidyquant) library(tidyverse) library(cowplot) library(lubridate) library(scales) library(ggridges) # replaces ggjoy ##################################################################################### ## Step 1: Prepare for data ## ##################################################################################### tickers=data.

Housing market update September 2017

THIS WEEK WAS BUSY, with a lot of data releases. Earlier this week we talked about housing starts, but there were a bunch of other key releases. Let’s review some of them here. We’ll just do a quick description of the data and then follow up with a static chart and an animated gif. Mortgage rates are still super low U.S. weekly average mortgage rates ticked up this week, but remain down from the start of the year.

Housing starts grinding higher or grinding to a halt?

ARE HOUSING STARTS GRINDING HIGHER, OR GRINDING TO A HALT? Today the U.S. Census Bureau joint with the U.S. Department of Housing and Urban Development published updated estimates of housing starts through August of 2017. Per the report privately-owned housing starts in August were at a seasonally adjusted annual rate of 1.18 million, down 0.8 percent from July’s revised estimate and up 1.4 percent from a year ago. Neither the month-over-month or year-over-year changes were significant.

A (Tidyquant)um of solace

LET’S WRANGLE SOME HOUSING DATA. We’ll try something different with how posts are organized. In the past I have generally mixed data wrangling, R code and graphs all in one post. Now I’m going to break it up. Posts like yesterday will just show some data and discuss it. Then, if the data wrangling or code is complicated enough I’ll follow up with another post with details. You’ll be able to find all my posts on data wrangling, under the data wrangling tag and R code under the R tag.

If housing inventory is so tight, why are so many homes vacant?

LET US REVIEW SOME INTERESTING TRENDS IN HOUSING VACANCIES for the United States. Earlier this year we talked about how limited housing supply was helping to drive accelerating house prices across the country. In such an environment you would expect to see housing vacancies decline. Indeed, if you look at the rate of rental or homeowner vacancies you see a substantial reduction. The chart below shows the homeowner and rental vacancy rates reported by the U.

Data visualizations for the week of September 22, 2016

IT WAS A BUSY WEEK FOR ECONOMIC AND HOUSING DATA this week. Below are some data visaulizations I made tracking key trends in economic and housing market data. Homeowner equity increases to $12.7 Trillion in the second quarter of 2016 With house prices rising by nearly 6 percent on a year-over-year basis, homeowners are building back equity. According to the Federal Reserve’s Flow of Funds, owners' equity in real estate was $12.

Recent economic and housing market trends: August 2016

IN THIS POST WE’LL REVIEW some recent economic and housing market trends. R code for graphs posted below Low mortgage rates Mortgage rates remain low, with the 30-year fixed mortgage averaging 3.43 percent for the week of 8/25. That’s nine consecutive weeks with rates under 3.5 percent. Ever since Brexit. One way I like to look at rates is to compare the weekly rates by week of year (e.g. first week of 2016 compared to first week of 2015).

Brexit, State of the Nation's Housing, and home sales: the week in charts.

IT WAS A BUSY WEEK FOR ECONOMIC AND HOUSING DATA. Existing and new home sales came out, the Joint Center for Housing Studies of Harvard University released their annual State of the Nation’s Housing, and the U.K. voted to leave the European Union (the Brexit). We’ll recap these data and events through charts I’ve created and shared throughout the week. In this post, I’ll share each of the charts with some commentary, and then below, I’ll include the R code I used to generate the charts.

Visualizing the U.S. housing stock

IN THIS POST I wanted to share a few data visualizations I made using the American Housing Survey (AHS). For this exercise I used the metro summary tableswhich you can download from American Fact Finder. Distribution by year unit built Distribution by units in stucture Distribution by bedrooms in unit Distribution by square footage of units {% include JB/setup

House price data viz

TO HELP UNDERSTAND TRENDS in house prices, I have a couple of data visualizations for the Freddie Mac house price index. Viz 1: House Price Dynamics The first compares the quarterly and annual appreciation for house prices across the 50 states plus the District of Columbia. In this visualization, each dot represent a state (or D.C.). The horizontal X axis measures the quarter-over-quarter annualized percentage change in the Freddie Mac house price index.

Vacant housing: from surplus to shortage

EARLIER THIS WEEK the Census Bureau released the latest Housing Vacancy Survey (HVS)data for the first quarter of 2016. Much attentionwent to the homeownership rate estimates, which showed a decline in homeownership rates near a 48-year low. The gif below shows the history of the homeownership rate as estimated by the HVS. And here’s a still image of the same data: Vacancy rates In addition to the homeownership rate, the HVS data contained estimates of both the homeowner and rental vacancy rates.

The week that was in charts

THIS WAS A BUSY WEEK for housing data. On Monday, the NAHB releasedthe NAHB/Wells Fargo Housing Market Index (HMI), which tracks home builder sentiment. On Tuesday we got New Residential Constructionfrom Census/HUD which gives us housing starts and permits. On Wednesday we got Existing Home Sales (EHS)from the National Association of Realtors. And on Thursday (along with mortgage rates), we got the FHFA House Price Index. These data were eagerly awaited.

Data Viz: Occupation Wages and Regional Cost of Living

A new data viz TODAY THE BLS released dataon metro level wages, employment concentration and regional costs of living. I put together a quick plot and sent out the following tweet: This post provides a link to interactive versions of the same plot and a discussion. The data The BLS data is quite interesting. It combines estimates of the average annual wages by occupation in metro areas with estimates of the relative price level in those areas.

Real house prices and population growth

EARLIER THIS WEEK the U.S. Census Bureau releasedupdated population figures for 2015. These data revealed changes in population across the country. Jed Kolko published a nice summaryof these data, and it got me thinking about the relationship of population growth rates and house prices. In this post I want to consider a few key things I found by exploring these data. First, let’s have a look at the history of real house prices, relative to the year 2000 for 30 large metro areas:

Tight Inventory: Data Viz Remixed

Tight Inventory EARLIER THIS WEEK, Trulia published a post by Chief Economist Ralph McLaughlincalled “House Arrest: How Low Inventory Is Slowing Home Buying”. The article analyzed trends in housing inventory. Trulia broke housing inventory into “starter homes”, “move-up homes”, and “premium homes”. They found that the inventory of available homes for-sale has shifted towards premium homes and away from starter homes that first time homebuyers would typically be buying. We’re not here to talk housing inventory, but I recommend you take a look.

The week (so far) in charts

Mid-week chart update With existing home sales, house prices, and new home sales being released, this is one of the busiest weeks of the month for housing data. We’ll catch new home sales tomorrow morning, but let’s catch our breath and recap what we’ve learned so far this week. Existing home sales disappoint The National Association of Realtors (NAR) reportedon existing home sales (EHS) on Monday. Existing home sales for February surprised most by dropping 7.

The week that was in charts

This past week I tracked several data releases that give us an idea of the health and vibrancy of the economy and housing markets. State employment trends positive Consistent with the national employment numbers state employment trends are positive. The BLS reportedon employment trends by state for January 2016 this week. Eleven states plus DC had a statistically significant month-to-month increases in employment and five states experienced month-to-month declines. One state I’ve been focused on is Texas due to its reliance on oil and gas drilling.

What the February jobs numbers mean for housing

Resilient job growth SPRING IS ALMOST HERE, and housing market activity will start to accelerate as we enter the peak homebuying season in the spring and summer months. The latest jobs report shows the U.S. labor market continues to pick up steam, adding 242,000 jobs month-over-month and beating expectations. Job growth has been resilient since the end of the Great Recession in June 2009, with monthly job growth averaging over 200,000 since 2011.

Recent House Price Trends

{% include JB/setup National house prices rise 6.2% Freddie Mac released its full year 2015 house price index and an interactive data visualization. The seasonally-adjusted national index increased 6.2 percent year-over-year and is now 29.6 percent above the post-recession low, and just 4.1 percent below the (nominal) pre-recession peak (see graph below). While national house price growth has been strong, there is considerable variation across the country. Some states and metro areas are already well above their pre-recession (nominal) peak, while other still have lots of ground to make up.

Annotated Data Viz 2

BELOW IS A VISUALIZATION of household size and composition and homeownership from the Census1going back to 1980. With this visualization, we can see how household size and tenure choice (own vs rent) has varied by age over time. 1Data from Ipums: IPUMS-USA, University of Minnesota, www.ipums.org. See my data visualizations on Tableau Public

Annotated Data Viz 1

Homeownership and the Jobs Outlook BELOW IS A VISUALIZATION of job growth and homeownership by occcupation. This viz details expected job growth by occupation compared to homeownership rate by occupation. This viz was originally published on Freddiemac.com. This viz shows compares variation in homeownership rates by occupation with expected job growth for those occupations. The size of the bubbles correspond to the expected number of job openings for that occupation. Projected job openings come from the Bureau of Labor Statistics, while the homeownership rate comes from the American Community Survey, public use microdata.

How I make my mortgage rates gif

{% include JB/setup Making a data viz SOMETIMES ANIMATION CAN BE USEFUL, though it is often misused. I’ve been tracking the week-to-week changes in mortgage rates, and animating with a GIF. Example animated gif with mortgage rates from 1/1/2013 to 3/10/2016 I build my gif using the R statistical package. Perhaps I’ll explain more of the details later, but the R code below uses the ggplot2, ggthemes and animation packages to create the plots, style them, and save the animation.

The week (so far) in charts

Mid-week chart update THERE HAVE NOT been a lot of data releases this week, but that’s no excuse not to get busy charting. I tweeted out several charts so far this week. Here’s a recap of my favorites for this half-week. Are wages increasing…or is it merely a trick of the light? We got this week’s charting started with some data from last week. The jobs report came out last Friday (see our discussion from last week) .

The week ahead: housing starts and housing market index

{% include JB/setup The week ahead Next week there are several data releases but the two that I’m paying especially close attention to are the NAHB/Wells Fargo Housing Market Index (HMI)and Housing Starts, part of the New Residential Constructionjoint release by Census and HUD. Will builders maintain their sunny outlook? The HMI is a diffusion index based on survey questions about homebuilder’s attitudes. Values of the index above 50 indicate that on balance, more respondents feel positive than negative about the current conditions in and direction of the single-family housing market.