by Calculated Risk on 1/26/2011 10:00:00 AM

The Census Bureau reports New Home Sales in December were at a seasonally adjusted annual rate (SAAR) of 329 thousand. This is up from a revised 280 thousand in November.

Click on graph for larger image in new window.

The first graph shows monthly new home sales (NSA - Not Seasonally Adjusted or annualized).

Note the Red columns for 2010. In December 2010, 22 thousand new homes were sold (NSA). This is a new record low for the month of December.

The previous record low for December was 23 thousand in 1966; the record high was 87 thousand in December 2005.

The second graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

Sales of new single-family houses in December 2010 were at a seasonally adjusted annual rate of 329,000 ... This is 17.5 percent (±17.7%)* above the revised November rate of 280,000, but is 7.6 percent (±17.0%)* below the December 2009 estimate of 356,000.

And another long term graph - this one for New Home Months of Supply.

Months of supply decreased to 6.9 in December from 8.4 in November. The all time record was 12.1 months of supply in January 2009. This is still high (less than 6 months supply is normal).

The seasonally adjusted estimate of new houses for sale at the end of December was 190,000. This represents a supply of 6.9 months at the current sales rate.

The final graph shows new home inventory.

The 329 thousand annual sales rate for December is still very low, and this was just the weakest December on record. This was above the consensus forecast of 300 thousand homes sold (SAAR).

It says something when sales increase and are still below the previous record lows for all years prior to 2010. New Home sales are still bouncing along the bottom - the good news is inventory is still declining.

by Calculated Risk on 1/26/2011 08:14:00 AM

The MBA reports: Mortgage Applications Decrease in Latest MBA Weekly Survey

The Refinance Index decreased 15.3 percent from the previous week and reached its lowest level since January 2010. The seasonally adjusted Purchase Index decreased 8.7 percent from one week earlier. The Purchase Index is at its lowest level since October 2010.
...
The average contract interest rate for 30-year fixed-rate mortgages increased to 4.8 percent from 4.77 percent, with points decreasing to 1.19 from 1.20 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

Click on graph for larger image in new window.

This graph shows the MBA Purchase Index and four week moving average since 1990.

The four-week moving average of the purchase index suggests weak existing home sales through the first few months of 2011.

by Calculated Risk on 1/25/2011 11:21:00 PM

The Financial Crisis Inquiry Commission report will be released on Thursday, but Sewell Chan at the NY Times has some excerpts: Financial Crisis Was Avoidable, Inquiry Finds

The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a federal inquiry.
...
The majority report finds fault with two Fed chairmen: Alan Greenspan, who led the central bank as the housing bubble expanded, and his successor, Ben S. Bernanke, who did not foresee the crisis but played a crucial role in the response. It criticizes Mr. Greenspan for advocating deregulation and cites a “pivotal failure to stem the flow of toxic mortgages” under his leadership as a “prime example” of negligence.
...
[T]he report is harsh on regulators. It finds that the Securities and Exchange Commission failed to require big banks to hold more capital to cushion potential losses and halt risky practices, and that the Fed “neglected its mission.”

It says the Office of the Comptroller of the Currency, which regulates some banks, and the Office of Thrift Supervision, which oversees savings and loans, blocked states from curbing abuses because they were “caught up in turf wars.”

When the Financial Crisis Inquiry Commission was announced, I was skeptical if they'd be willing to address the willful lack of regulatory supervision and the role of Wall Street in the crisis.

These excerpts give me hope - there is much more in Chan's article - now I'm definitely looking forward to reading the report! Barry Ritholtz is happy too.

Earlier posts on Case-Shiller Home Price indexes:
• Case-Shiller: U.S. Home Prices Keep Weakening as Eight Cities Reach New Lows in November
• House Prices and Months-of-Supply, and Real House Prices
• House Price graph gallery

by Calculated Risk on 1/25/2011 08:42:00 PM

Update:
Text of Obama’s State of the Union speech

From the NY Times: Obama Sees Global Fight for U.S. Jobs

From the WSJ: Obama: Freeze Spending

Earlier posts on Case-Shiller Home Price indexes:
• Case-Shiller: U.S. Home Prices Keep Weakening as Eight Cities Reach New Lows in November
• House Prices and Months-of-Supply, and Real House Prices
• House Price graph gallery

by Calculated Risk on 1/25/2011 06:59:00 PM

From Patrick Coolican at the Las Vegas Sun: Generation Y wants housing Las Vegas has in short supply

[D]evelopers filled the valley and made piles of money with suburban tract homes that carry little appeal for the next generation of housing consumers, according to an emerging body of survey data of the so-called Millennials or Generation Y.

That’s the generation — about 80 million strong, which is larger than the postwar Baby Boom — born from about the mid-1970s to the early 2000s.

At the recent homebuilders trade show in Orlando, Fla., Melina Duggal of the real estate consulting firm RCLCO laid out the data on the next generation of housing consumers. Her firm asked young renters where they would move to if they had the opportunity. More than 80 percent said they would choose an urban area, or a suburban area that qualified as “urban lite,” such as Arlington, Va., or Bethesda, Md. These are suburbs that feature walkability and easy access to urban amenities.

As Patrick notes, this preference for urban living can partially be explained by their current age:

"[T]hey may want the urban experience now, but eventually they’ll marry and have children and want to live near good suburban schools and have a bigger home with a yard."

Maybe ... I'm not in Generation Y (or even close), but I desire walkability and to be close to some urban amenities. Maybe tastes are changing.