Sunday, August 22, 2010

Summary for Week ending August 21st

by Bill McBride on 8/22/2010 12:02:00 PM

Here is the Schedule for Week of August 22nd (always in menu bar too).

  • Single Family Housing Starts decline in July

    Total Housing Starts and Single Family Housing StartsClick on graph for larger image in new window.

    Total housing starts were at 546 thousand (SAAR) in July, up 1.7% from the revised June rate of 537 thousand (revised down from 549 thousand). Single-family starts declined 4.2% to 432 thousand in July.

    The graph shows total and single unit starts since 1968. This shows the huge collapse following the housing bubble, and that housing starts have mostly been moving sideways for over a year - with a slight up and down over the last several months due to the home buyer tax credit.

  • NAHB Builder Confidence falls in August to lowest since March 2009

    The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 13 in August. This is down slightly from 14 in July and below expectations. The record low was 8 set in January 2009, and 13 is very low ...

    Note: any number under 50 indicates that more builders view sales conditions as poor than good.

    HMI and Starts Correlation This graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the August release for the HMI and the June data for starts (NAHB was released before starts).

    This shows that the HMI and single family starts mostly move generally in the same direction - although there is plenty of noise month-to-month.

    Press release from the NAHB: Builder Confidence Declines In August
    Builder confidence in the market for newly built, single-family homes edged down for a third consecutive month in August ... The HMI declined one point to 13, its lowest level since March of 2009.
  • CoreLogic: House Prices flat in June

    From CoreLogic (formerly First American LoanPerformance): CoreLogic® Home Price Index Increases Decelerate in June Note: CoreLogic reports the year-over-year change.

    Loan Performance House Price Index This graph shows the national LoanPerformance data since 1976. January 2000 = 100.

    The index is up 1.4% over the last year, and off 28% from the peak.

    CoreLogic expects prices to "moderately decline" (more negative view than last month). I expect that we will see lower prices on this index later this year and into 2011.

    This data is for June and was still impacted by the tax credit. I've been expecting this index to start showing price declines in July as sales collapsed.

  • AIA: Architecture Billings Index shows contraction in July

    Note: This index is a leading indicator for new Commercial Real Estate (CRE) investment.

    AIA Architecture Billing IndexThis graph shows the Architecture Billings Index since 1996. The index has remained below 50, indicating falling demand, since January 2008.

    Note: Nonresidential construction includes commercial and industrial facilities like hotels and office buildings, as well as schools, hospitals and other institutions.

    According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. So there will probably be further declines in CRE investment into 2011.

  • NY Fed: Total Household Debt down 6.4% from the peak in 2008

    From the NY Fed: New York Fed Releases New Report, Web Page on Household Credit Conditions in U.S., Select States Showing Decline in Consumer Indebtedness

    Here is the report: Quarterly Report on Household Debt and Credit

    And some data and graphs.

    Total Household Debt Graph and text from the NY Fed. "Aggregate consumer debt continued to decline in the second quarter, continuing its trend of the previous six quarters. As of June 30, 2010, total consumer indebtedness was $11.7 trillion, a reduction of $812 billion (6.5%) from its peak level at the close of 2008Q3, and $178 billion (1.5%) below its March 31, 2010 level. ... Excluding mortgage and HELOC balances, consumer indebtedness fell 1.5% in the quarter and, after having fallen for six consecutive quarters, stands at $2.31 trillion, 8.4% below its 2008Q4 peak."

  • Industrial Production, Capacity Utilization increase in July

    From the Fed: Industrial production and Capacity Utilization

    Capacity Utilization This graph shows Capacity Utilization. This series is up 9.8% from the record low set in June 2009 (the series starts in 1967).

    Capacity utilization at 74.8% is still far below normal - and well below the the pre-recession levels of 81.2% in November 2007.

    Note: y-axis doesn't start at zero to better show the change.

  • Weekly initial unemployment claims at 500,000, highest since November 2009

    The DOL reports on weekly unemployment insurance claims

    Weekly Unemployment Claims This graph shows the 4-week moving average of weekly claims since January 2000.

    The four-week average of weekly unemployment claims increased this week by 8,000 to 482,500.

    The dashed line on the graph is the current 4-week average. This is the highest level for initial claims - and also for the 4-week average - since November 2009.

  • Other Economic Stories ...

  • From the Philly Fed: Business Outlook Survey. Philly Fed Index shows contraction in August, first time since July 2009.

  • From the NY Fed: Empire State Manufacturing Survey. Manufacturing Conditions improve "modestly" in August.

  • From the Fed: July 2010 Senior Loan Officer Opinion Survey on Bank Lending Practices. Large banks ease lending standards slightly, demand still weak.

  • Moody's: Commercial Real Estate Price Index declines 4% in June

  • MBA: Mortgage refinance activity increases sharply, Purchase activity declines

  • Unofficial Problem Bank List increases to 817 institutions

    Best wishes to all.
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