Thursday, May 30, 2013

Pending Home Sales: April 2013

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for April showing that pending home sales improved with the seasonally adjusted national index climbing 0.3% from March and increasing 10.3% above the level seen in April 2012.

Meanwhile, the NARs chief economist Lawrence Yun is suggests that gaining sales and tight inventory should work to continue to push up home prices:

"The housing market continues to squeak out gains from already very positive conditions.  Pending contracts so far this year easily correspond to higher closed home sales in 2013, ... Because of inventory shortages, higher home sales will push up home values to the highest level in five 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).

Extended Unemployment: Initial, Continued and Extended Unemployment Claims May 30 2013

Today’s jobless claims report showed an increase to both initial and continued unemployment claims as initial claims trended well below the closely watched 400K level.

Seasonally adjusted “initial” unemployment claims increased by 10,000 to 354,000 claims from 344,000 claims for the prior week while seasonally adjusted “continued” claims increased by 63,000 claims to 2.986 million resulting in an “insured” unemployment rate of 2.3%.

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 1.72 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 2.77 million people that are currently counted as receiving traditional continued unemployment benefits, there are 4.50 million people on state and federal unemployment rolls.


Wednesday, May 29, 2013

Reading Rates: MBA Application Survey – May 29 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) jumped 11 basis points to 3.76% since last week while the purchase application volume increased 3% and the refinance application volume declined 12% 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).




S&P/Case-Shiller: March 2013

Yesterday's release of the S&P/Case-Shiller (CSI) home price indices for March reported that the non-seasonally adjusted Composite-10 price index increased again rising a notable 1.38% since February while the Composite-20 index also increased 1.38% over the same period.

The latest CSI data is continuing to demonstrate more resiliency than seen in recent years as prices continue to move up even in the face of typically lower seasonal transactions.

If this trend continues, rather than declining as has been seen in past years, prices may continue to rise in advance of the typical uplift from the more active spring transactions.

The 10-city composite index increased 10.26% as compared to March 2012 while the 20-city composite increased 10.87% over the same period.

Both of the broad composite indices show significant peak declines slumping -28.64% for the 10-city national index and -28.02% 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.

Friday, May 24, 2013

New Home Sales: April 2013

Yesterday, the U.S. Census Department released its monthly New Residential Home Sales Report for April showing a improvement with sales climbing 2.25% from March and rising 28.98% above the level seen in April 2012 but still remaining at an historically low level of 454K SAAR units.

It's important to recognize that the inventory of new homes appears to be mounting as unsold units totaled 156K, still though near the lowest level seen in in at least 47 years while the median number of months for sale increased to 4.0.

The monthly supply went flat at 4.1 months while the median selling price increased 14.89% and the average selling price increased 14.90% from the year ago level.

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

FHFA Monthly Home Prices: March 2013

Yesterday, 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 a notable 1.28% from February and rose 7.23% above the level seen in March 2012.

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.

Wednesday, May 22, 2013

Existing Home Sales Report: April 2013

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for April showing an increase in sales with total home sales rising 0.6% since March and climbing 9.7% above the level seen in April 2012.

Single family home sales also improved climbing 1.2% from March rising 9.0% above the level seen in April 2012 while the median selling price increased a notable 11% above the level seen a year earlier.

Inventory of single family homes increased from March to 1.92 million units but still remained 11.9% below the level seen in April 2012 which, along with the sales pace, resulted in a monthly supply of 5.3 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.



Reading Rates: MBA Application Survey – May 22 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) jumped 11 basis points to 3.65% since last week while the purchase application volume declined 3% and the refinance application volume declined 12% 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).




Monday, May 20, 2013

The Chicago Fed National Activity Index: April 2013

The latest release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated worsening for the national economy with the index falling to a weak level of -0.53 from a level of -0.23 in March while the three month moving average declined to a level of -0.04.

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.

Thursday, May 16, 2013

Extended Unemployment: Initial, Continued and Extended Unemployment Claims May 16 2013

Today’s jobless claims report showed a notable increase to initial unemployment claims and a slight decline to continued unemployment claims as initial claims trended well below the closely watched 400K level.

Seasonally adjusted “initial” unemployment claims increased by 32,000 to 360,000 claims from 328,000 claims for the prior week while seasonally adjusted “continued” claims declined by 4,000 claims to 3.009 million resulting in an “insured” unemployment rate of 2.3%.

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 1.79 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 2.97 million people that are currently counted as receiving traditional continued unemployment benefits, there are 4.76 million people on state and federal unemployment rolls.


The Philly Fed Business Outlook Survey: May 2013

The March release of the Federal Reserve Bank of Philadelphia Business Outlook Survey (BOS) indicated a slight worsening of the regions manufacturing activity with the current activity index falling to a weak level of -5.2 while assessments the future activity improved to a level of 32.3.

The following chart shows the current and future activity indexes both with their corresponding 3-month moving averages. The red line marks the threshold between contraction and expansion for these diffusion indexes.

New Residential Construction Report: April 2013

Today’s New Residential Construction Report showed mixed results in April with a notable declines to housing starts while housing permits improved notably on the month with total housing permits increasing by a notable 14.3%.

Single family housing permits, the most leading of indicators, increased 3.0% from March to 617K single family units (SAAR), and  increased 27.5% above the level seen in April 2012 but still remained well below levels seen at the peak in September 2005.

Single family housing starts declined 2.1% from March to 610K units (SAAR), but rose 20.8% above the level seen in April 2012 but still remained well below the peak set in early 2006.


Monday, May 13, 2013

SNAP Food Stamp Participation: February 2013

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

In fact, household participation has been climbing so steadily that it has dwarfed 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 indicated that in February, a notable 213,962 individual recipients were removed from the food stamps program with the current total still increasing 2.66% on a year-over-year basis.

Individuals receiving food stamp benefits declined to 47.55 million which, as a ratio of the overall civilian non-institutional population, declined 1.66% since February 2012 to now stand at a whopping 19.42% of the population.

Households receiving food stamps benefits declined by 82,324 to 23 million households with the current total rising 3.84% above the level seen a year earlier

As participation continues to swell, so too has the total nominal benefit cost climbing 2.32% on a year-over-year basis to $6.30 billion for the month.

Conspicuous Correlation: Retail Sales April 2013

Today, the U.S. Census Bureau released its latest nominal read of retail sales showing an increase of 0.1% from March, and a gain of 3.7% on a year-over-year basis on an aggregate of all items including food, fuel and healthcare services.

Nominal "discretionary" retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales rose 0.84% from March increasing 1.8% above the level seen in April 2012 while, adjusting for inflation, “real” discretionary retail sales rose just 0.32% over the same period.

On a “nominal” basis, there had appeared to be “rough correlation” between strong home value appreciation and strong retail spending preceding the housing bust and an even stronger correlation when home values started to decline.

The following chart shows the year-over-year change to nominal discretionary retail sales and the year-over-year change to nominal the S&P/Case-Shiller Composite home price index since 1993 and since 2000.

As you can see there is, at the very least, a coincidental change to home values and consumer spending during the boom and then the bust, but as home values have continued to decline, retail spending has remained low but has not continued to consistently contract.

Looking at the chart below (click for full-screen dynamic version), adjusted for inflation (CPI for retail sales, CPI “less shelter” for S&P/Case-Shiller Composite) the “rough correlation” between the year-over-year change to the “discretionary” retail sales series and the year-over-year S&P/Case-Shiller Composite series seems now even more significant.

Thursday, May 09, 2013

Extended Unemployment: Initial, Continued and Extended Unemployment Claims May 09 2013

Today’s jobless claims report showed a decline to both initial and continued unemployment claims as initial claims trended well below the closely watched 400K level.

Seasonally adjusted “initial” unemployment claims declined by 4,000 to 323,000 claims from 327,000 claims for the prior week while seasonally adjusted “continued” claims declined by 27,000 claims to 3.005 million resulting in an “insured” unemployment rate of 2.3%.

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 1.76 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 3.02 million people that are currently counted as receiving traditional continued unemployment benefits, there are 4.79 million people on state and federal unemployment rolls.


Reading Rates: MBA Application Survey – May 09 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) went flat at 3.47% since last week while the purchase application volume increased 2% and the refinance application volume increased 8% 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).




Tuesday, May 07, 2013

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

The latest release of the University of Hong Kong's Hong Kong Residential Real Estate Series (HKU-REIS) indicating that, in February, the price of residential properties increased a notable 1.91% since January and rose 29.26% above the level seen in February 2012.

Clearly, the slight pullback in prices seen late 2012 has been completely surpassed by another, notable leg up.

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.

Friday, May 03, 2013

Envisioning Employment: Employment Situation April 2013

Today’s Employment Situation Report indicated that in April, net non-farm payrolls increased by 165,000 jobs overall with the private non-farm payrolls sub-component adding 176,000 jobs while the civilian unemployment rate declined to 7.5% over the same period.

Net private sector jobs increased 0.16% since last month climbing 1.94% above the level seen a year ago but remained 1.76% below the peak level of employment seen in December 2007.

Recovery-less Recovery: Unemployment Duration April 2013


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

Workers unemployed 27 weeks or more declined to 4.353 million or 37.4% of all unemployed workers while the median term of unemployment declined to 17.5 weeks and the average stay on unemployment declined to 36.5 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.