Pending Home Sales: November 2013

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for November showing that pending home sales went flat with the seasonally adjusted national index increasing just 0.2% from October and falling 1.6% below the level seen in November 2012.

Meanwhile, the NARs chief economist Lawrence Yun indicated that while 2013 is ending on a soft note, the year was positive overall and that the slower sales activity seen in the last few months nay just be marking a cyclical low.

"We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014 ... Although the final months of 2013 are finishing on a soft note, the year as a whole will end with the best sales total in seven years."

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).

Existing Home Sales Report: November 2013

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for November showing decreased sales with total home sales falling a whopping 4.3% since October and falling 1.2% below the level seen in November 2012.

Single family home sales also declined notably falling 3.8% from October dropping 0.9% below the level seen in November 2012 while the median selling price increased 9.4% above the level seen a year earlier.

Inventory of single family homes increased from October to 1.87 million units and climbed 5.6% above the level seen in November 2012 which, along with the sales pace, resulted in a monthly supply of 5.2 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.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims December 19 2013

Today’s jobless claims report showed an increase to both initial and continued unemployment claims as seasonally adjusted initial claims climbed nearer to the closely watched 400K level.

Seasonally adjusted “initial” unemployment claims increased 10,000 to 379,000 claims from 369,000 claims for the prior week while seasonally adjusted “continued” claims increased by 94,000 claims to 2.884 million resulting in an “insured” unemployment rate of 2.2%.

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 1.37 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 2.95 million people that are currently counted as receiving traditional continued unemployment benefits, there are 4.33 million people on state and federal unemployment rolls.

New Residential Construction Report: November 2013

Today’s New Residential Construction Report showed a decline to total permit activity while indicating notable improvement in start activity with starts jumping 22.7% from October.

Single family housing permits, the most leading of indicators, increased 2.1% from October to 634K single family units (SAAR), and  increased 10.5% above the level seen in November 2012 but still remained well below levels seen at the peak in September 2005.

Reading Rates: MBA Application Survey – December 17 2013

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 4.49% since last week while the purchase application volume declined 6% and the refinance application volume declined 4% 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).

Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings December 2013

Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing that assessments of housing activity improved in December with the composite HMI index climbing to 58 while the "buyer traffic" index rose to a level of 44.

It's important to note that while the last few months results have suggested a pullback of sorts for home builder activity, the latest trend has been very strong and consistent with the overall recovery seen in the nation's housing markets.

Looking at the data, it is fairly clear that the last year of results indicate a major change in builder sentiment likely coming as a result of improvements in confidence given the notable rise in buyer traffic, reduced inventory and a more balanced monthly supply.

Reading Rates: MBA Application Survey – December 11 2013

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) increased 11 basis points to 4.50% since last week while the purchase application volume increased 1% and the refinance application volume increased 2% 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).

Hong Kong Bubble?: Hong Kong Residential Property Prices September 2013

The latest release of the University of Hong Kong's Hong Kong Residential Real Estate Series (HKU-REIS) indicating that, in September, the price of residential properties declined 1.40% since August but rose 12.11% above the level seen in September 2012.

With the prior late-90s era peak having been bested handily by the latest price run up, it will be interesting to see how long this period of house price inflation can run.

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.

SNAP Food Stamp Participation: September 2013

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

The latest data released by the Department of Agriculture indicated that in September, a whopping 359,389 individual recipients were removed from the food stamps program with the current total declining 0.85% on a year-over-year basis, the first annual decline seen since early 2007.

Individuals receiving food stamp benefits declined to 47.30 million which, as a ratio of the overall civilian non-institutional population now stands at a whopping 19.21% of the population.

Households receiving food stamps benefits declined by 94,170 to 22.99 million households with the current total rising 0.11% above the level seen a year earlier

Total nominal benefit cost declined 1.63% on a year-over-year basis to $6.30 billion for the month.

Envisioning Employment: Employment Situation November 2013

Today’s Employment Situation Report indicated that in November, net non-farm payrolls increased by 203,000 jobs overall with the private non-farm payrolls sub-component adding 196,000 jobs while the civilian unemployment rate declined to 7.0% over the same period.

Net private sector jobs increased 0.17% since last month climbing 2.06% above the level seen a year ago but remained 0.66% below the peak level of employment seen in December 2007.

Recovery-less Recovery: Unemployment Duration November 2013

Today's employment situation report showed that conditions for the long term unemployed worsened in November while remaining distressed by historic standards.

Workers unemployed 27 weeks or more increased to 4.066 million or 37.3% of all unemployed workers while the median term of unemployment increased to 17.0 weeks and the average stay on unemployment increased to 37.2 weeks.

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.

On The Margin: Total Unemployment November 2013

Today's Employment Situation report showed that in November “total unemployment” including all marginally attached workers declined to 13.2% while the traditionally reported unemployment rate dropped to 7.0%.

The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit definition of “unemployed” (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively “on the margin” either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.

The Bureau of Labor Statistics considers “marginally attached” workers (including discouraged workers) and persons who have settled for part time employment to be “underutilized” labor.

The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.

To calculate the “total” rate of unemployment we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.

New Home Sales: October 2013

Today, the U.S. Census Department released its monthly New Residential Home Sales Report for October showing a notable increase with sales climbing a whopping 25.4% from September and rising 21.6% above the level seen in October 2012 remaining at an historically low level of 444K SAAR units.

It's important to note that today's results were likely skewed by the recent government shutdown with additional months results required to determine if today's jump is lasting or just some noise in the data.

The monthly supply decreased to 4.9 months while the median selling price declined 0.57% and the average selling price increased 12.72% from the year ago level.

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

ADP National Employment Report: November 2013

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 November as private employers added 215,000 jobs in the month bringing the total employment level 1.86% above the level seen in November 2012.

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

Reading Rates: MBA Application Survey – December 04 2013

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) increased 7 basis points to 4.39% since last week while the purchase application volume declined 4% and the refinance application volume declined 18% 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).

Construction Spending: October 2013

Today, the U.S. Census Bureau released their latest read of construction spending showing declines in October with total private construction spending falling since September while single family private residential construction spending and non-residential construction spending also declined on the month.

On a month-to-month basis, total residential spending slumped 0.60% from September but still climbing 17.80% above the level seen in October 2012 remaining well below the peak level seen in 2006.

Single family construction spending declined 0.60% from September rising 17.80% since October 2012 remaining well below it's peak level reached in 2006.

Non-residential construction spending declined 0.50% from September falling 3.40% below the level seen in October 2012 and remaining a well below the peak level reached in October 2008.

The following charts (click for larger dynamic versions) show private residential construction spending, private residential single family construction spending and private non-residential construction spending broken out and plotted since 1993 along with the year-over-year, month-to-month and peak percent change to each since 1994 and 2000 – 2005.