Wednesday, August 24, 2016

Thursday: Travel Day

by Bill McBride on 8/24/2016 06:40:00 PM

As a reminder: NAR Existing Home Sales Report vs. Tom Lawler's LEHC Projection from Last Week

Existing Home Sales (SAAR): NAR, 5.39 million; LEHC, 5.41 million; “Consensus”, 5.52 million

Inventory of EHS for Sale: NAR, 2.13 million; LEHC, 2.14 million.

YOY % Change, Median Existing SF Home Sales Price: NAR, 5.4%; LEHC, 5.3%.

Note: Thursday is a travel day - no posting until later in the day.

At 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for 265 thousand initial claims, up from 262 thousand the previous week.

Also at 8:30 AM, Durable Goods Orders for June from the Census Bureau. The consensus is for a 3.7% increase in durable goods orders.

At 11:00 AM, Kansas City Fed Survey of Manufacturing Activity for August.

Existing Home Sales decline in July to 5.39 million SAAR

by Bill McBride on 8/24/2016 10:06:00 AM

CR Note: I'm in NYC and I will post graphs when I return home.

From the NAR: Existing-Home Sales Lose Steam in July

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 3.2 percent to a seasonally adjusted annual rate of 5.39 million in July from 5.57 million in June. For only the second time in the last 21 months 2, sales are now below (1.6 percent) a year ago (5.48 million).

Total housing inventory at the end of July inched 0.9 percent higher to 2.13 million existing homes available for sale, but is still 5.8 percent lower than a year ago (2.26 million) and has now declined year-over-year for 14 straight months. Unsold inventory is at a 4.7-month supply at the current sales pace, which is up from 4.5 months in June.
Sales in July (5.39 million SAAR) were 3.2% lower than last month, and were 1.6% below the July 2015 rate.

According to the NAR, inventory increased to 2.13 million in July from 2.11 million in June.   Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

Inventory decreased 5.8% year-over-year in July compared to July 2015.  

Months of supply was at 4.7 months in July.

This was below consensus expectations (but not a surprise for CR readers). For existing home sales, a key number is inventory - and inventory is still low. I'll have more after I return home.

MBA: "Mortgage Applications Decrease in Latest Weekly Survey"

by Bill McBride on 8/24/2016 07:00:00 AM

CR Note: I'm in NYC, graphs will be posted next week.

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 2.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 19, 2016.

... The Refinance Index decreased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.3 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 8 percent higher than the same week one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.67 percent from 3.64 percent, with points increasing to 0.34 from 0.31 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Tuesday, August 23, 2016

Wednesday: Existing Home Sales

by Bill McBride on 8/23/2016 05:54:00 PM

Note: I'm in New York and posting will not be frequent (too much to do and see).

Thanks to Joe Weisenthal for having me on Bloomberg's WDYM. And Barry Ritholtz on his MIB radio and podcast.

At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

At 9:00 AM, FHFA House Price Index for June 2016. This was originally a GSE only repeat sales, however there is also an expanded index.  The consensus is for a 0.3% month-to-month increase for this index.

At 10:00 AM, Existing Home Sales for July from the National Association of Realtors (NAR). The consensus is for 5.52 million SAAR, down from 5.57 million in June.

Housing economist Tom Lawler expects the NAR to report sales of 5.41 million SAAR in July, down 2.9% from June’s preliminary pace.

Hint: Lawler isn't always closer, but I'd take the under on the consensus Wednesday.

Chemical Activity Barometer "Suggests Accelerated Business Activity"

by Bill McBride on 8/23/2016 02:59:00 PM

Here is an indicator that I'm following that appears to be a leading indicator for industrial production.

From the American Chemistry Council: Chemical Activity Barometer Suggests Accelerated Business Activity; Notches Sixth Consecutive Gain

The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), expanded 0.4 percent in August following an upward revision for July. This marks the barometer’s sixth consecutive monthly gain. Accounting for adjustments, the CAB is up 3.2 percent over this time last year, the strongest year over year growth since January 2015. All data is measured on a three-month moving average (3MMA). On an unadjusted basis the CAB climbed 0.3 percent in August, following a 0.6 percent jump in July.

"The CAB is signaling higher, and possibly accelerating, U.S. business activity into 2017. The services sectors have begun to improve and likely accelerated during recent months, and manufacturing appears to be gathering momentum," said ACC’s Chief Economist Kevin Swift.
emphasis added
Currently CAB has increased over the last three months, and this suggests an increase in Industrial Production over the next year.

New Home Sales increased to 654,000 Annual Rate in July, Highest since October 2007

by Bill McBride on 8/23/2016 10:10:00 AM

CR Note: I'm in NYC for a few days and having a great time. Sorry - no graphs until I return home.

The Census Bureau reports New Home Sales in July were at a seasonally adjusted annual rate (SAAR) of 654 thousand.

The previous three months were revised down by a total of 12 thousand (SAAR).

"Sales of new single-family houses in July 2016 were at a seasonally adjusted annual rate of 654,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.4 percent (±12.7%)* above the revised June rate of 582,000 and is 31.3 percent (±19.9%) above the July 2015 estimate of 498,000."
emphasis added
The months of supply decreased in July to 4.3 months.

The all time record was 12.1 months of supply in January 2009.

This is now in the normal range (less than 6 months supply is normal).
"The seasonally adjusted estimate of new houses for sale at the end of July was 233,000. This represents a supply of 4.3 months at the current sales rate"
This was well above expectations of 580,000 sales SAAR in July.   This was a strong report.  I'll have more later this week when I return home.

Monday, August 22, 2016

Tuesday: New Home Sales, Richmond Fed Manufacturing Survey

by Bill McBride on 8/22/2016 04:52:00 PM

Note: I'm in New York and posting will not be frequent (too much to do and see).

• At 10:00 AM ET, New Home Sales for July from the Census Bureau. The consensus is for a decrease in sale to 580 thousand SAAR in July from 592 thousand in June.

• Also at 10:00 AM, Richmond Fed Survey of Manufacturing Activity for August.

Black Knight's First Look at July Mortgage Data

by Bill McBride on 8/22/2016 08:17:00 AM

CR Note: The month-to-month increase in delinquencies is mostly seasonal (happens every July). I'm in NYC, and posting will be intermittent. Best to all.

From Black Knight: Black Knight Financial Services’ First Look at July Mortgage Data: Delinquencies Continue Seasonal Climb; Prepayments Defy Historically Low Interest Rates, Growing Refinanceable Population

JACKSONVILLE, Fla. – Aug. 22, 2016 -- The Data & Analytics division of Black Knight Financial Services, Inc. (NYSE: BKFS) reports the following “first look” at July 2016 month-end mortgage performance statistics derived from its loan-level database representing the majority of the national mortgage market.

Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 4.51% Month-over-month change: 4.78% Year-over-year change: -3.38%

Total U.S. foreclosure pre-sale inventory rate: 1.09% Month-over-month change: -1.68% Year-over-year change: -28.36%

Total U.S. foreclosure starts: 61,300 Month-over-month change: -11.54% Year-over-year change: -14.27%

Monthly Prepayment Rate (SMM): 1.26% Month-over-month change: -11.98% Year-over-year change: -1.00%

Foreclosure Sales as % of 90+: 1.99% Month-over-month change: -13.65% Year-over-year change: 1.05%

Number of properties that are 30 or more days past due, but not in foreclosure: 2,286,000 Month-over-month change: 108,000 Year-over-year change: -70,000

Number of properties that are 90 or more days past due, but not in foreclosure: 695,000 Month-over-month change: 3,000 Year-over-year change: -147,000

Number of properties in foreclosure pre-sale inventory: 550,000 Month-over-month change: -8,000 Year-over-year change: -214,000

Number of properties that are 30 or more days past due or in foreclosure: 2,836,000 Month-over-month change: 100,000 Year-over-year change: -284,000Ca

Sunday, August 21, 2016

Sunday Night Futures

by Bill McBride on 8/21/2016 07:15:00 PM

Schedule for Week of Aug 21, 2016

• At 8:30 AM ET, Chicago Fed National Activity Index for July. This is a composite index of other data.

From CNBC: Pre-Market Data and Bloomberg futures: S&P and DOW futures are up slightly (fair value).

Oil prices were up over the last week with WTI futures at $48.11 per barrel and Brent at $50.88 per barrel.  A year ago, WTI was at $40, and Brent was at $44 - so prices are up 15% or so year-over-year. Yes, UP year-over-year.

Here is a graph from for nationwide gasoline prices. Nationally prices are at $2.16 per gallon (down about $0.50 per gallon from a year ago).

Horizontal Rig Counts increase slightly

by Bill McBride on 8/21/2016 10:07:00 AM

Note: I'm in the Boston area (Wonderful wedding last night). Off to New York soon ...

A few comments from Steven Kopits of Princeton Energy Advisors LLC:

"US horizontal oil rigs gained 4 to 318.
The takeaway: At $45 WTI, the Bakken, Eagle Ford and Niobrara are more or less able to hold rig counts steady, but not more. However, the Permian looks entirely viable at this number, with 20 rigs added even with WTI in the $40-45 range. "
CR Note: This is horizontal rig count only (not vertical).