Paper Economy - A US Real Estate Bubble Blog

Thursday, May 31, 2012

ADP National Employment Report: May 2012

Today, private staffing and business services firm ADP released the latest installment of their National Employment Report indicating that the situation for private employment in the U.S. improved in May as private employers added 133,000 jobs in the month bringing the total employment level 1.77% above the level seen in May 2011.

Perusing the rest of the data in the ADP dataset you can see the the economy is currently showing the most growth for small to mid-sized service providing jobs with goods-producing jobs remaining near trough levels.

Look for Friday’s BLS Employment Situation Report to likely show somewhat similar trends.

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Extended Unemployment: Initial, Continued and Extended Unemployment Claims May 31 2012

Today’s jobless claims report showed a notable increase to initial unemployment claims and a decline to continued unemployment claims while seasonally adjusted initial claims approached the closely watched 400K level.

Seasonally adjusted “initial” declined to 383,000 claims from last week’s revised 373,000 claims while seasonally adjusted “continued” claims declined by 36,000 resulting in an “insured” unemployment rate of 2.6%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 2.93 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.12 million people that are currently counted as receiving traditional continued unemployment benefits, there are 6.05 million people on state and federal unemployment rolls.


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Wednesday, May 30, 2012

Reading Rates: MBA Application Survey – May 30 2012

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) declined 2 basis points to 3.81% since last week, the lowest value on on record for this MBA series, while the purchase application volume declined 0.6% and the refinance application declined 1.5% over the same period.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).




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Tuesday, May 29, 2012

S&P/Case-Shiller: March 2012

Note... be sure to bookmark the overall S&P/Case-Shiller Dashboard or the Scary Housing Dashboard of the weakest markets for a real-time view of all the markets tracked by S&P.

The latest release of the S&P/Case-Shiller (CSI) home price indices for March reported that the non-seasonally adjusted Composite-10 price index declined 0.09% since February while the Composite-20 index declined 0.03% over the same period resulting in the lowest level seen to on the Composite-10 since early 2003 and the largest peak decline seen since the nearly six year old housing bust began in 2006.

The latest CSI data clearly indicates that the price trends are experiencing a declining trend through the typically less active winter season and as I recently pointed out, the more timely and less distorted Radar Logic RPX data is continuing to capture notable rising prices driven primarily by seasonality.

The 10-city composite index declined 2.85% as compared to March 2011 while the 20-city composite declined 2.57% over the same period.

Both of the broad composite indices show significant peak declines slumping -35.21% for the 10-city national index and -35.07% for the 20-city national index on a peak comparison basis.

To better visualize today’s results use Blytic.com to view the full release.

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Thursday, May 24, 2012

Extended Unemployment: Initial, Continued and Extended Unemployment Claims May 24 2012

Today’s jobless claims report showed a notable declined to both initial and continued unemployment claims while seasonally adjusted initial claims continued to trend well below the closely watched 400K level.

Seasonally adjusted “initial” declined to 370,000 claims from last week’s revised 372,000 claims while seasonally adjusted “continued” claims declined by 29,000 resulting in an “insured” unemployment rate of 2.6%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 2.93 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.15 million people that are currently counted as receiving traditional continued unemployment benefits, there are 6.08 million people on state and federal unemployment rolls.


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Wednesday, May 23, 2012

FHFA Monthly Home Prices: March 2012

Today, the Federal Housing Finance Agency (FHFA) released the latest results of their monthly house price index (HPI) showing that in March, nationally, home prices increased 1.78% since February rising 2.69% above the level seen in March 2011.

The FHFA monthly HPI are formulated from home purchase information collected from mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac.

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Reading Rates: MBA Application Survey – May 23 2012

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) declined 2 basis points to 3.83% since last week, the lowest value on on record for this MBA series, while the purchase application volume declined 3.0% and the refinance application increased 5.6% over the same period.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).




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Tuesday, May 22, 2012

Existing Home Sales Report: April 2012

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for April  showing an increase in sales with total home sales climbing 3.4% since March rising 10% above the level seen in April 2011.

Single family home sales also improved rising 3.0% from March and 9.9% above the level seen in April 2011 while the median selling price increased 10.4% above the level seen in April 2011.

Inventory of single family homes increased 10.9% from March dropping 18.8% below the level seen in
April 2011 which, along with the sales pace, resulted in a monthly supply of 6.6 months.

The following charts (click for full-screen dynamic version) shows national existing single family home sales, median home prices, inventory and months of supply since 2005.



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Monday, May 21, 2012

The Chicago Fed National Activity Index: April 2012

Today’s release of the Chicago Federal Reserve National Activity Index (CFNAI) showed improvement for the national economy with the index increasing from last month to stand at 0.11 while the three month moving average also declined to -0.06.

The CFNAI is a weighted average of 85 indicators of national economic activity collected into four overall categories of “production and income”, “employment, unemployment and income”, “personal consumption and housing” and “sales, orders and inventories”.

The Chicago Fed regards a value of zero for the total index as indicating that the national economy is expanding at its historical trend rate while a negative value indicates below average growth.

A value at or below -0.70 for the three month moving average of the national activity index (CFNAI-MA3) indicates that the national economy has either just entered or continues in recession.

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Friday, May 18, 2012

Fannie Mae Delinquencies: March 2012

The latest release of the Fannie Mae Monthly Summary indicated that total serious single family delinquency declined slightly in March while remaining at distressed levels.

In March, 2.93% of non-credit enhanced loans went seriously delinquent while the level was 8.35% of credit enhanced loans resulting in an overall total single family delinquency of 3.67%.

The following charts (click for larger ultra-dynamic and surf-able chart) show what Fannie Mae terms the count of “Seriously Delinquent” loans as a percentage of all loans on their books.

It’s important to understand that Fannie Mae does NOT segregate foreclosures from delinquent loans when reporting these numbers.


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Wednesday, May 16, 2012

New Residential Construction Report: April 2012

Today’s New Residential Construction Report showed gains in April with single family permits increasing from March while starts also increased over the same period.

Single family housing permits, the most leading of indicators, increased a notable 1.9% from March to 475K single family units (SAAR), and increased 18.5% above the level seen in April 2011 but still remained  an astonishing 73.58% below the peak in September 2005.

Single family housing starts increased 2.3% from March to 492K units (SAAR), and climbed 18.8% above the level seen in April 2011 and remained a stunning 73.01% below the peak set in early 2006.


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Monday, May 14, 2012

Index of Stress: May 2012

The Federal Reserve Bank of St. Louis recently began publishing a new weekly index that seeks to track the general level of financial stress.

As periods of financial stress come and go a whole host of fundamental economic indicators immediately adjust to meet the near and long term expectations of market participants

Interest rates, yields spreads, popular market volatility indices all move in real time giving observers unequivocal evidence of changes general sentiment.

The St. Louis Fed has devised a method of crunching eighteen of these sensitive indices down into one convenient index it calls the St. Louis Fed Financial Stress Index (STLFSI).

The latest results of the STLFSI indicate that the level of financial stress remains elevated with May's results near at .27.

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Wednesday, May 09, 2012

On The Stamp: Food Stamp Participation February 2012

As a logical consequence of the prolonged economic downturn it appears that participation in the federal food stamp program is continuing to rise.

In fact, household participation has been climbing so steadily that it has far surpassed the last peak (which looks like a minor blip by comparison) set as a result of the immediate fallout following hurricane Katrina.

The latest data released by the Department of Agriculture shows that in February, 123,385 recipients were removed from the food stamps program with the current total still increasing 4.81% on a year-over-year basis while household participation increased 6.56%.

Individual participation as a ratio of the overall civilian non-institutional population has increased 3.26% over the same period.

Participation continues to swell with nominal benefit costs climbing a lofty 4.61% on a year-over-year basis to $6.16 billion for the month.




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Reading Rates: MBA Application Survey – May 09 2012

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) declined 1 basis point to 3.91% since last week while the purchase application volume increased 3.4% and the refinance application increased 1.3% over the same period.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).




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Tuesday, May 08, 2012

Radar Watching: March 2012

As I have noted in the past, since the home price index data provided by Radar Logic is more timely, unadjusted and un-smoothed it is particularly useful for gaining deeper visibility over our housing markets.

As for the latest trends, it’s important to note that the 25-MSA Composite is showing significant year-over-year declines while prices continue to bounce from the lows set in late-January.

The latest data shows that as of early-March, prices have declined 2.71% below the level seen in March 2011 continuing the pattern of past years with prices now heading higher as the data moves into the typically more active spring selling season.

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Monday, May 07, 2012

Hong Kong Bubble?: Hong Kong Residential Property Prices February 2012

Today, the University of Hong Kong released their Hong Kong Residential Real Estate Series (HKU-REIS) indicating that, in February, the price of residential properties increased a notable 2.05% since January and climbed 5.96% above the level seen in February 2011.

It appears that after a notable pullback in late-2011 prices are beginning to show some improvement with all measures rising on the month.

The HKU-REIS is a set of property price indices constructed monthly using a “modified” repeat-sale methodology similar to that of the S&P/Case-Shiller indices yet suited to the Hong Kong property market.

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Friday, May 04, 2012

Envisioning Employment: Employment Situation April 2012

Today’s Employment Situation Report indicated that in April, net nonfarm payrolls increased with private nonfarm payrolls adding 130,000 jobs and the unemployment rate declining slightly to 8.1% over the same period.

Net private sector jobs increased 0.12% since last month climbing 1.86% above the level seen a year ago but but remained a whopping 3.97% below the peak level of employment seen in December 2007.

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