Welcome back to The Week in Review.

I hope you had a good week.

I was set to fly to San Francisco this weekend but the friends I was going to visit had a plumbing-related emergency. We had to raincheck. I am sad not to see my friends and meet their new baby, but the silver lining is that I gained 30 hours of working time. Don’t worry, reader, I put those hours to good use—I’ve refined my housing demand forecast, and you (paying subscribers only, upgrade here) will get to enjoy it on Tuesday morning. But for now, The Week in Review…

Articles with a ◎ are free. Those with a ◉ have free previews but are only accessible in full for paying subscribers. Upgrade your subscription here.

🚨 New: I made an economic data release calendar for you!
If you are in the housing business, you know there is a lot of data to keep up with—from home price indices, to sentiment surveys, to home starts…I could go on. I collected the release dates for all of these (99 entries for the remainder of 2024), and made them into a calendar (which you can add to your Google or Apple Calendar). My buddy Claude helped. Claude is a robot. You’ll never be blindsided by a data release again! Download the calendar, here ◉.

News: A slew of jobs data all pointed in the same direction: down
Views: A softer labor market means less inflation—and lower mortgage rates

Goldilocks. That’s the word “the sell side” (investment banks) are using to describe this week’s data. It’s a dumb term that only bankers and people reading books to children use. But, I used to write research at a big bank and I get it—the word captures a more long winded message: the economy is neither running too hot (too much inflation), nor too cold (too little growth).

The reason for the G word? Jobs! Specifically, less of them. The number of jobs companies added last month (“nonfarm payrolls”) was 175k—way lower than the consensus expectation for 240k. The unemployment rate also unexpectedly rose. Wages were a bit weaker, too (although the type of wage data released this week tends to bounce around).

The weak jobs numbers come on top of other data pointing to softening growth: surveys of sentiment in the manufacturing and service industries dipped below 50, indicating contracting conditions. In their earnings calls, a bunch of companies cited softening consumer demand.

The Fed wants a slowdown in wages and buying to curb rising prices. This week’s data is therefore the kind of bad news that is actually good news. At the FOMC meeting midweek (a humdrum one, since the Fed didn’t release a “summary of economic projections”), Powell played down the likelihood of Fed hikes.

More data like this week’s and people might start talking about more than just one or two cuts again. And you know what that means—I can start banging on about my 6% end-of-the-year mortgage rate call again.

The mortgage rate call you should definitely be sick of me talking about is here ◉

News: Case-Shiller home prices rose 6.4% year-over-year
Views: We knew that already!

I’m not really sure why Case-Shiller remains the gold standard and the most watched home price index.

Sure, it’s way better than, say, the NAR index. But Case-Shiller is incredibly delayed, and very broad (covering only major cities and nothing smaller). In probably the most niche article I’ve ever written (here ◉), I analyzed the three major home price indices (Case-Shiller, Zillow, and FHFA) and found there is really no reason to follow any index other than Zillow’s.

Zillow is by far and away the best index, not least because their data comes out a month earlier than the others. Case in point: this week Case-Shiller price data came out for—wait for it—February! It included transactions that closed as far back as December 1. Here we are, in early May, enjoying the sunshine and budding flowers, looking at price data from the days when skies were gray and the trees barren.

By contrast, Zillow last week came out with price data for March. Needless to say, the Case-Shiller index showed prices rising healthily (either measured month-over-month seasonally adjusted, or year-over-year, as I show below). For those who took my analysis to heart and follow the Zillow index, this is old news.

Unlike most charts, the one below plots each index not by the date that each index refers to, but rather by the release date. All the big indices moves together when plotted in the conventional way, but when you line them up by release date, the advantage of the Zillow index being released 5 weeks earlier than Case-Shiller is clear: Zillow is a far more timely way of spotting turning points in the market, which is ultimately what we really care about, right?

One Home Price Index to Rule them All? Why Zillow is a far better index than the others, here ◉

News: Realtor.com put out its monthly analytics
Views: Despite more inventory, homes are spending the same time on market

If there is a theme in this week’s WIR, it’s that there is too much data (and not enough analysis and digesting of the data, which is probably the best raison d’etre for Home Economics). But the reason I pay attention to the Realtor.com data (and the reason it’s on the data release calendar, here ◉), is that some of the information is unique—for example, the number of days homes are sitting on the market.

Realtor.com’s latest report, which covers April, reports that inventory (homes actively for sale) is 30% higher than a year ago. It’s grown 6 months in a row. The average home was on the market for 47 days—basically unchanged from last year, but 7 days less than before the COVID-19 pandemic.

RSS feeds are a game changer (still¹).
Remember that economics calendar I told you about, the one I made because there is too much data to keep track of (download it here ◉)? I feel similarly about the news. There is too much of it, and you have to wade through so much AI-generated bullshit just to get to anything worth reading.

One solution is simply to have a handful of websites you visit whenever you want to catch up on what’s happening². But this is hugely inefficient—you have to visit all these different sites, and click through all of their pages to feel like you’re not missing anything.

An RSS reader is the solution to this problem: it’s an app that gives you all the headlines from all the sources you tell it you want to follow³. Since I follow about 150 different economics and housing-focused sources, this has been a game changer for me.

There are many RSS reader apps. I use Reeder. Once you get that setup, you’ll need to find feeds to follow. That’s a whole process (not hard, just time consuming). Paying subscribers can get a jump on this by loading my reading list—my curated feed of 150 news sources—into Reeder. Download it here ◉, and schedule a call with me here ◉ if you need help.

Artificial Intelligence
I think my AI obsession is proportional to reality: this week I saved about 8 hours using Claude.ai (the best AI chatbot) and Perplexity.ai (the best AI search engine). For example, I used them for tabulating old Census data that only comes in PDF form (I need it in spreadsheet form). Claude helped me with the economic data release calendar (download it here ◉).

I am happy to be an evangelist about the tricks and tools I’ve discovered. Schedule a call with me here ◉. This past week I had a great conversation with a mortgage lender in Wisconsin, and a climate change specialist in New York.

AI things to watch / read
Nicky Case is one of the most creative people on the internet. Read her AI safety guide here ◎. Ethan Mollick is a Wharton professor who writes user-friendly stuff about AI (including tips on how to use it). His Substack is here, I just bought his book, “Co-intelligence”, here ◎. Benedict Evans is a quirky Brit with some interesting ideas about AI, watch his interview, here ◎. The best AI news podcast is The Neuron, here ◎. An insanely well-researched piece about how the chips that power AI are made, here ◎.

My editor/wife points out that all my “Fun Stuff” is actually work stuff. Fair enough. I love my job? Ok fine, a dog video that gave us both a good laugh, here ◎.
Have a great weekend!