Paper Economy - A US Real Estate Bubble Blog

Thursday, June 28, 2012

Extended Unemployment: Initial, Continued and Extended Unemployment Claims June 28 2012

Today’s jobless claims report showed an decline to both initial and continued unemployment claims while seasonally adjusted initial claims remained below the closely watched 400K level.

Seasonally adjusted “initial” declined to 386,000 claims from last week’s revised 392,000 claims while seasonally adjusted “continued” claims declined by 15,000 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 2.70 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.10 million people that are currently counted as receiving traditional continued unemployment benefits, there are 5.80 million people on state and federal unemployment rolls.


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Wednesday, June 27, 2012

Reading Rates: MBA Application Survey – June 27 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) went flat at 3.79% since last week while the purchase application volume declined 1.0% and the refinance application declined 8.0% 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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Pending Home Sales: May 2012

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for May showing that pending home sales improved notably with the seasonally adjusted national index climbing 5.9% since April while increasing 13.3% above the level seen in May 2011.

Meanwhile, the NARs chief economist Lawrence Yun suggests that 2012 is shaping up to be a "superior" year with sales projected as being up 10% overall for the year.


"The housing market is clearly superior this year compared with the past four years.  The latest increase in home contract signings marks 13 consecutive months of year-over-year gains ... Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10 percent improvement in total sales for 2012."

The problem is though, the MBA Purchase Index is not currently capturing any significant rise in purchase contract activity which begs the question... how are the buyers that the NAR sees in the pending index financing their purchase? ... Cash?

The following chart shows the seasonally adjusted national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version).

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S&P/Case-Shiller: April 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 April reported that the non-seasonally adjusted Composite-10 price index increased 1.29% since March while the Composite-20 index increased 1.28% over the same period.

The latest CSI data clearly indicates that the price trends are beginning to experience an uptrend through the typically more active spring 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 2.23% as compared to April 2011 while the 20-city composite declined 1.90% over the same period.

Both of the broad composite indices show significant peak declines slumping -34.42% for the 10-city national index and -34.24% 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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New Home Sales: May 2012

Recently, the U.S. Census Department released its monthly New Residential Home Sales Report for May showing a notable monthly increase with sales climbing 7.6% since April and rising 19.8% above the level seen in May 2011 but remaining at an historically low level of 369K SAAR units.

It's important to recognize that the inventory of new homes remained near the low for the series at 145K units, nearly the lowest level seen in in at least 47 years while the median number of months for sale went flat at 7.9.

The monthly supply declined to 4.7 months while the median selling price increased 5.63% and the average selling price increased 4.26% from the year ago level.

The following chart show the extent of sales decline to date (click for full-larger version).

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The Chicago Fed National Activity Index: May 2012

The latest release of the Chicago Federal Reserve National Activity Index (CFNAI) showed a worsening of the national economy with the index declining from the prior month to stand at a very weak -0.45 while the three month moving average also declined near contraction territory at -0.34.

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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Thursday, June 21, 2012

Extended Unemployment: Initial, Continued and Extended Unemployment Claims June 21 2012

Today’s jobless claims report showed an decline to initial unemployment claims and a flattening to continued unemployment claims while seasonally adjusted initial claims remained below the closely watched 400K level.

Seasonally adjusted “initial” declined to 387,000 claims from last week’s revised 389,000 claims while seasonally adjusted “continued” claims went flat 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 2.64 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.09 million people that are currently counted as receiving traditional continued unemployment benefits, there are 5.73 million people on state and federal unemployment rolls.


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Wednesday, June 20, 2012

Reading Rates: MBA Application Survey – June 20 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) went flat at 3.79% since last week while the purchase application volume declined 9.0% and the refinance application increased 1.0% 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, June 19, 2012

New Residential Construction Report: May 2012

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

Single family housing permits, the most leading of indicators, increased a notable 4.0% from April to 494K single family units (SAAR), and increased 19.9% above the level seen in May 2011 but still remained  an astonishing 72.53% below the peak in September 2005.

Single family housing starts increased 3.2% from April to 516K units (SAAR), and climbed 26.2% above the level seen in May 2011 and remained a stunning 71.70% below the peak set in early 2006.


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Monday, June 18, 2012

Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings June 2012

Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing an overall improvement in June with the composite HMI index rising to 29 while the "buyer traffic" index went flat at 23.

While all indicators have made notable increases as of late, it's important to note that conditions still remain distressed by historic standards though, the last few months results appears to indicate a major change in the builder sentiment.




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Thursday, June 14, 2012

Extended Unemployment: Initial, Continued and Extended Unemployment Claims June 14 2012

Today’s jobless claims report showed an increase to initial unemployment claims and a decrease to continued unemployment claims while seasonally adjusted initial claims remained below the closely watched 400K level.

Seasonally adjusted “initial” increased to 386,000 claims from last week’s revised 380,000 claims while seasonally adjusted “continued” claims declined by 33,000 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 2.69 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.05 million people that are currently counted as receiving traditional continued unemployment benefits, there are 5.74 million people on state and federal unemployment rolls.


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Tuesday, June 12, 2012

Radar Watching: April 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-April, prices have declined 1.17% below the level seen in April 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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Thursday, June 07, 2012

Extended Unemployment: Initial, Continued and Extended Unemployment Claims June 07 2012

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

Seasonally adjusted “initial” declined to 377,000 claims from last week’s revised 389,000 claims while seasonally adjusted “continued” claims increased by 34,000 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 2.82 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.06 million people that are currently counted as receiving traditional continued unemployment benefits, there are 5.88 million people on state and federal unemployment rolls.


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Wednesday, June 06, 2012

Reading Rates: MBA Application Survey – June 06 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 3.78% since last week, the lowest value on on record for this MBA series, while the purchase application volume declined slightly and the refinance application increased 2.0% 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, June 05, 2012

ISM Non-Manufacturing Report on Business: May 2012

Today, the Institute for Supply Management released their latest Non-Manufacturing Report on Business indicating that service related business activity went flat in May with the business activity component increasing while the overall non-manufacturing index improved just slightly to 53.7 from 53.5 in April.

At 55.6 the business activity index increased 1.83% since April climbing 2.02% above the level seen a year earlier.

This month, service industry respondents are sounding slightly mixed with more positive expectations than earlier in the year and still reasonably optimistic for economic activity in 2012:

"Q2 will be a strong quarter for us; the building market is starting to wake up." (Construction)

"Increased activity and resources related to projects." (Finance & Insurance)

"The upswing in consumer confidence has led to increased business." (Arts, Entertainment & Recreation)

"While we tend to remain optimistic about the economy, our numbers do not show a surge in activity. It appears consumers are maintaining their 'let's wait and see' attitude." (Accommodation & Food Services)

"Business outlook is flat for the remainder of 2012 with emphasis on cost containment, restructuring and cost-savings projects." (Professional, Scientific & Technical Services)

"Business is still strong, but we have seen some softening in growth since mid-March." (Wholesale Trade)


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Friday, June 01, 2012

Envisioning Employment: Employment Situation May 2012

Today’s Employment Situation Report indicated that in May, net nonfarm payrolls increased only slightly with private nonfarm payrolls adding just 69,000 jobs and the unemployment rate increased slightly to 8.2% over the same period.

Net private sector jobs increased 0.07% since last month climbing 1.78% above the level seen a year ago but but remained a whopping 3.95% below the peak level of employment seen in December 2007.

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Recovery-less Recovery: Unemployment Duration May 2012

Be sure to bookmark the "Scary Unemployment Dashboard"... it's live.

Today's employment situation report showed that conditions for the long term unemployed worsened notably in May and remained epically distressed by historic standards.

Workers unemployed 27 weeks or more increased to 5.411 million or 42.8% of all unemployed workers while the median number of weeks unemployed increased to 20.1 weeks and the average stay on unemployment climbed to 39.7 weeks, the highest level ever recorded.

Looking at the charts below (click for super interactive versions) you can see that today’s sorry situation far exceeds even the conditions seen during the double-dip recessionary period of the early 1980s, long considered by economists to be the worst period of unemployment since the Great Depression.



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