by Calculated Risk on 4/25/2012 09:33:00 AM

From ATA: ATA Truck Tonnage Index Up 0.2% in March

The American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index rose 0.2% in March after increasing 0.5% in February. (February’s rise was unchanged from the preliminary gain we reported on March 27th.) The SA index stood at 119.5 (2000=100), up from 119.3 in February. Compared with March 2011, the SA index was up 2.7%, which was the smallest year-over-year increase since December 2009.
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“March tonnage, and the first quarter overall, was reflective of an economy that is growing, but growing moderately,” ATA Chief Economist Bob Costello said. “The pace of freight definitely slowed from the torrid pace in late 2011.”

“Most economic indicators still look good, which will continue to support tonnage going forward,” he said. Costello also noted that the industry should not expect the rate of growth seen over the last couple of years, when tonnage grew 5.8% in both 2010 and 2011. “Expect tonnage overall this year to be up at a more moderate rate, perhaps less than 3%, which is more in-line with normal growth.”

Click on graph for larger image.

Here is a long term graph that shows ATA's For-Hire Truck Tonnage index.

The dashed line is the current level of the index. The index is above the pre-recession level and up 2.7% year-over-year. More sluggish growth.

From ATA:

Trucking serves as a barometer of the U.S. economy, representing 67.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9 billion tons of freight in 2010. Motor carriers collected $563.4 billion, or 81.2% of total revenue earned by all transport modes.

All current Transportation Graphs

by Calculated Risk on 4/25/2012 08:39:00 AM

Form the MBA: Mortgage Applications Decrease Despite Survey Low Rates in Latest MBA Weekly Survey

The Refinance Index decreased 5.6 percent from the previous week, with the Conventional Refinance Index decreasing by 6.1 percent and the Government Refinance Index decreasing by 2.1 percent. The seasonally adjusted Purchase Index increased 2.7 percent from one week earlier.
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The refinance share of mortgage activity decreased to 73.4 percent of total applications from 75.2 percent the previous week.
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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.04 percent from 4.05 percent,with points decreasing to 0.40 from 0.45 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. This is the lowest 30-year fixed interest rate recorded in the history of the survey.
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The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.32 percent from 3.33 percent, while points remained unchanged at 0.41 (including the origination fee) for 80 percent LTV loans. This is the lowest 15-year fixed interest rate recorded in the history of the survey.

by Calculated Risk on 4/24/2012 11:06:00 PM

A few miscellaneous articles ...

• From Kathleen Pender at the San Francisco Chronicle: California Fed-Ed jobless benefits to end mid-May

Starting in mid-May, no one in California can begin or continue receiving this final round of federal benefits, known as Fed-Ed in California and Extended Benefits elsewhere.

About 90,000 Californians are receiving Fed-Ed. Their benefits will end abruptly in mid-May, even if they still have weeks remaining in their Fed-Ed claim.

The program's end will reduce the maximum weeks of unemployment to 79 from 99 for most people in California, although a small segment can get up to 89.

Update: California has one of the highest state unemployment rates at 11%, so it seemed a little weird that California workers would lose the Fed-Ed benefits. However, aocording to the Record Searchlight (ht josap), the Fed-Ed program requires that the unemployment rate be "10% higher than it was during the same three-month period during one of the last three years".

• Earlier today from the Richmond Fed: Manufacturing Activity Picks Up the Pace in April; Expectations Remain Upbeat

In April, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — advanced seven points to 14 from March's reading of 7. ... The manufacturing employment index moved up four points to end at 10, and the average workweek indicator edged up one point to 3. The wage index added three points to 14.

This was slightly above expectations of a reading of 8.

• From the FHFA: FHFA House Price Index Up 0.3 Percent in February

U.S. house prices rose 0.3 percent on a seasonally adjusted basis from January to February, according to the Federal Housing Finance Agency’s monthly House Price Index. ... For the 12 months ending in February, U.S. prices rose 0.4 percent, the first 12-month increase since the July 2006 - July 2007 interval.

The FHFA monthly index is for Fannie and Freddie loans only. Fannie and Freddie have significantly lower default rates than the overall market, and that probably has helped stabilize this index.

On March New Home Sales:
• New Home Sales in March at 328,000 Annual Rate
• Comments on Housing and "Distressing Gap" Graph • New Home Sales graphs

On House Prices:
• Case Shiller: House Prices fall to new post-bubble lows in February NSA
• Real House Prices and Price-to-Rent Ratio at late '90s Levels
• House Price graphs

by Calculated Risk on 4/24/2012 08:02:00 PM

From the Philly Fed:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for March 2012. In the past month, the indexes increased in 48 states, decreased in one state (Rhode Island), and remained stable in one state (South Dakota), for a one-month diffusion index of 94. Over the past three months, the indexes increased in all 50 states, for a three-month diffusion index of 100.

Note: These are coincident indexes constructed from state employment data. From the Philly Fed:

The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.

Click on graph for larger image.

This is a graph is of the number of states with one month increasing activity according to the Philly Fed. This graph includes states with minor increases (the Philly Fed lists as unchanged).

In March, 49 states had increasing activity, up from 47 in February. The number of states with increasing activity has been at or above 47 for the last seven consecutive months.

Here is a map of the three month change in the Philly Fed state coincident indicators. This map was all red during the worst of the recession.

Now the map is all green. The recovery may be sluggish, but it is widespread geographically.

On March New Home Sales:
• New Home Sales in March at 328,000 Annual Rate
• Comments on Housing and "Distressing Gap" Graph • New Home Sales graphs

On House Prices:
• Case Shiller: House Prices fall to new post-bubble lows in February NSA
• Real House Prices and Price-to-Rent Ratio at late '90s Levels
• House Price graphs

by Calculated Risk on 4/24/2012 04:15:00 PM

LPS released their First Look report for March today. LPS reported that the percent of loans delinquent declined in March from February. However the percent of loans in the foreclosure process remained at a very high level.

LPS reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) declined to 7.09% from 7.57% in February. This is the lowest delinquency rate since August 2008; however the percent of delinquent loans is still significantly above the normal rate of around 4.5% to 5%. The percent of delinquent loans peaked at 10.97%, so delinquencies have fallen over half way back to normal. Note: There is a seasonal pattern for delinquencies, and it is not unusual to see a decline in March.

The following table shows the LPS numbers for March 2012, and also for last month (Feb 2012) and one year ago (Mar 2011).

LPS: Loans Delinquent and in Foreclosure
	Mar-12	Feb-12	Mar-11
Delinquent	7.09%	7.57%	7.78%
In Foreclosure	4.14%	4.13%	4.21%
Loans Less than 90 days	1,888,000	2,059,000	2,122,000
Loans More than 90 days	1,643,000	1,722,000	1,989,000
Loans In foreclosure	2,060,000	2,065,000	2,222,000
Total	5,591,000	5,846,000	6,333,000

The number of delinquent loans is down about 14% year-over-year (580,000 fewer mortgages deliquent), but the number of loans in the foreclosure process has only declined slightly year-over-year. This remains far above the "normal" level of around 0.5%.

On March New Home Sales:
• New Home Sales in March at 328,000 Annual Rate
• Comments on Housing and "Distressing Gap" Graph • New Home Sales graphs

On House Prices:
• Case Shiller: House Prices fall to new post-bubble lows in February NSA
• Real House Prices and Price-to-Rent Ratio at late '90s Levels
• House Price graphs

by Calculated Risk on 4/24/2012 02:49:00 PM

The solid new home sales report this morning is further confirmation that the recovery for the housing industry has started. New home sales are up about 17% from the weakest three month period during the housing bust. That is a significant improvement, even if the absolute levels are still very low.

The debate is now about the strength of the recovery, not whether there is a recovery. My view is housing will remain sluggish for some time, and I expect 2012 to be another historically weak year, but better than 2011.

For house prices, the Case-Shiller index has a serious lag, and the key right now is to see if the year-over-year change is declining (it is). Note: The current Case-Shiller report was an average of December, January and February closing prices, and some of those sales were probably negotiated last October, about six months ago!

More current, but less reliable, pricing data (such as asking prices, new home prices and some anecdotal comments) suggest that house prices have stopped falling in most areas, and I expect the year-over-year change in the Case-Shiller index to turn slightly positive in the not too distant future (it is difficult to predict when, although I'll try in a couple of months). Of course the number of REO sales (lender Real Estate Owned) are down, and some of the improvement is related to fewer foreclosures and other distressed sales.

Here is an update to the "distressing gap" graph that shows existing home sales (left axis) and new home sales (right axis) through March. This graph starts in 1994, but the relationship has been fairly steady back to the '60s.

Click on graph for larger image.

Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales. The flood of distressed sales has kept existing home sales elevated, and depressed new home sales since builders haven't been able to compete with the low prices of all the foreclosed properties.

I expect this gap to eventually close, but it will probably take a number of years.

Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different.

On March New Home Sales:
• New Home Sales in March at 328,000 Annual Rate
• New Home Sales graphs

On House Prices:
• Case Shiller: House Prices fall to new post-bubble lows in February NSA
• Real House Prices and Price-to-Rent Ratio at late '90s Levels
• House Price graphs

by Calculated Risk on 4/24/2012 11:51:00 AM

Another Update: Case-Shiller, CoreLogic and others report nominal house prices. It is also useful to look at house prices in real terms (adjusted for inflation) and as a price-to-rent ratio.

Below are three graphs showing nominal prices (as reported), real prices and a price-to-rent ratio. Real prices, and the price-to-rent ratio, are back to late 1998 and early 2000 levels depending on the index.

Nominal House Prices

Click on graph for larger image.

The first graph shows the quarterly Case-Shiller National Index SA (through Q4 2011), and the monthly Case-Shiller Composite 20 SA and CoreLogic House Price Indexes (through February) in nominal terms as reported.

In nominal terms, the Case-Shiller National index (SA) is back to Q3 2002 levels, the Case-Shiller Composite 20 Index (SA) is back to January 2003 levels, and the CoreLogic index (NSA) is back to January 2003.

Real House Prices

The second graph shows the same three indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices.

In real terms, the National index is back to Q4 1998 levels, the Composite 20 index is back to January 2000, and the CoreLogic index back to May 1999.

In real terms, all appreciation in the '00s is gone.

Price-to-Rent

In October 2004, Fed economist John Krainer and researcher Chishen Wei wrote a Fed letter on price to rent ratios: House Prices and Fundamental Value. Kainer and Wei presented a price-to-rent ratio using the OFHEO house price index and the Owners' Equivalent Rent (OER) from the BLS.

Here is a similar graph using the Case-Shiller National, Composite 20 and CoreLogic House Price Indexes.

This graph shows the price to rent ratio (January 1998 = 1.0).

On a price-to-rent basis, the Case-Shiller National index is back to October 1998 levels, the Composite 20 index is back to February 2000 levels, and the CoreLogic index is back to June 1999.

In real terms - and as a price-to-rent ratio - prices are mostly back to late 1990s or early 2000 levels.

All current house price graphs
Earlier:
• Case Shiller: House Prices fall to new post-bubble lows in February NSA
• New Home Sales in March at 328,000 Annual Rate

by Calculated Risk on 4/24/2012 10:00:00 AM

The Census Bureau reports New Home Sales in March were at a seasonally adjusted annual rate (SAAR) of 328 thousand. This was down from a revised 353 thousand SAAR in February (revised up sharply from 313 thousand). December and January were revised up too.

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

Sales of new single-family houses in March 2012 were at a seasonally adjusted annual rate of 328,000 ... This is 7.1 percent (±20.7%) below the revised February rate of 353,000, but is 7.5 percent (±19.6%) above the March 2011 estimate of 305,000..

Click on graph for larger image in graph gallery.

The second graph shows New Home Months of Supply.

Months of supply increased to 5.3 in March from 5.0 in February.

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 March was 144,000. This represents a supply of 5.3 months at the current sales rate.

On inventory, according to the Census Bureau:

"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."

Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed.

This graph shows the three categories of inventory starting in 1973.

The inventory of completed homes for sale was at a record low 48,000 units in March. The combined total of completed and under construction is at the lowest level since this series started.

The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).

In March 2012 (red column), 32 thousand new homes were sold (NSA). Last year only 28 thousand homes were sold in March. This was the third weakest March since this data has been tracked. The high for March was 127 thousand in 2005.

Even though sales are still very low, new home sales have clearly bottomed. New home sales have averaged 335 thousand SAAR over the last 5 months, after averaging under 300 thousand for the previous 18 months. All of the recent revisions have been up too. This was a solid report and above the consensus forecast.

by Calculated Risk on 4/24/2012 09:00:00 AM

S&P/Case-Shiller released the monthly Home Price Indices for February (a 3 month average of December, January and February).

This release includes prices for 20 individual cities, and two composite indices (for 10 cities and 20 cities).

Note: Case-Shiller reports NSA, I use the SA data.

From S&P: Nine Cities and Both Composites Hit New Lows in February 2012 According to the S&P/Case-Shiller Home Price Indices

Data through February 2012, released today by S&P Indices for its S&P/Case-Shiller Home Price Indices ... showed annual declines of 3.6% and 3.5% for the 10- and 20-City Composites, respectively. This is an improvement over the annual rates posted for the month of January, -4.1% and -3.9%, respectively. ... Nine MSAs and both Composites posted new cycle lows as of February 2012.
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“While there might be pieces of good news in this report, such as some improvement in many annual rates of return, February 2012 data confirm that, broadly-speaking, home prices continued to decline in the early months of the year,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. “Nine MSAs -- Atlanta, Charlotte, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa -- and both Composites hit new post-crisis lows. Atlanta continued its downward spiral, posting its lowest annual rate of decline in the 20-year history of the index at -17.3%. The 10-City Composite declined 3.6% and the 20-City was down 3.5% compared to February 2011.

Click on graph for larger image.

The first graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indices (the Composite 20 was started in January 2000).

The Composite 10 index is off 34.2% from the peak, and up 0.2% in February (SA). The Composite 10 is at a new post bubble low Not Seasonally Adjusted.

The Composite 20 index is off 33.9% from the peak, and up 0.1% (SA) from January. The Composite 20 is also at a new post-bubble low NSA.

The second graph shows the Year over year change in both indices.

The Composite 10 SA is down 3.6% compared to February 2011.

The Composite 20 SA is down 3.4% compared to February 2011. This was a smaller year-over-year decline for both indexes than in January.

The third graph shows the price declines from the peak for each city included in S&P/Case-Shiller indices.

Prices increased (SA) in 12 of the 20 Case-Shiller cities in February seasonally adjusted (only 3 cities increased NSA). Prices in Las Vegas are off 61.7% from the peak, and prices in Dallas only off 8.2% from the peak.

The NSA indexes are at new post-bubble lows - and the NSA indexes will continue to decline in March (this report was for the three months ending in February). I'll have more on prices later

by Calculated Risk on 4/23/2012 07:53:00 PM

These people didn't think they'd get caught? And how did they earn $350,000 in fees on $8 million in loans? That sure seems excessive.

From Eric Wolff at the North County Times: Carlsbad mother and Orange County son convicted in $8 million mortgage fraud

A jury convicted a Carlsbad mother and her Orange County son of an $8 million mortgage fraud scheme, the U.S. Attorney for Southern California said Wednesday.

Stephen Chrysler, an Orange County attorney and loan broker, and his mother, Aida Agusti Castro, a Carlsbad real estate agent living in Cardiff, inflated clients incomes on loan mortgages to buy 16 properties in Escondido, Oceanside, San Marcos, Lakeside and Menifee over 25 months from 2005 to 2007 to create false loans, which in turn netted the pair $350,000 in fees.
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Castro and Chrysler located their clients through advertising in Spanish-language publications. They then inflated their clients' incomes so the clients could purchase more expensive houses, which in turn inflated Castro and Chrysler's fees. In order to persuade lenders, the pair had to fake businesses, management companies, tenants and rental histories.
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The pair then told clients to sign the loan documents without reading them, and they often refused to translate the documents from English to Spanish.

Now they will get free rent at the Big House.