by Calculated Risk on 1/27/2013 02:42:00 PM

In the schedule for this coming week, I mentioned there is a two day Federal Open Market Committee (FOMC) meeting ending on Wednesday, January 30th with the FOMC announcement expected at 2:15 PM ET on Wednesday. No significant changes are expected at this meeting.

At the last meeting, the FOMC set "thresholds" for raising the Fed Funds rate. From the December FOMC statement:

"[The FOMC] anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. The Committee views these thresholds as consistent with its earlier date-based guidance."
emphasis added

An interesting question is if the FOMC will set thresholds for reducing or ending the current $85 billion per month in asset purchases (aka Quantitative Easing or QE). Goldman Sachs chief economist Jan Hatzius discussed this possibility last week:

"The rationale for QE thresholds is similar to that for funds rate thresholds, namely that they would help the financial markets understand the Fed's reaction function with respect to changes in the economic outlook. If the committee adopted such an approach, the most likely thresholds would be 7.25% for the unemployment rate, 2.5% for the 1-2 year PCE inflation outlook, and "well anchored" inflation expectations. We would also expect an additional "out," namely that QE must not impair market functioning or create financial imbalances.

Any move to QE thresholds would probably not occur until the spring or summer of 2013. But the future of QE, the criteria for slowing or ending it, and perhaps even the question of whether QE thresholds are desirable in principle are likely to be on the FOMC's agenda as soon as next week."

Boston Fed President Eric Rosengren discussed this in a speech last year:

"My own personal assessment is that as long as inflation and inflation expectations are expected to remain well-behaved in the medium term, we should continue to forcefully pursue asset purchases at least until the national unemployment rate falls below 7.25 percent and then assess the situation.

I think of this number as a threshold, not as a trigger – and the distinction is important. I think of a trigger as a set of conditions that necessarily imply a change in policy. A threshold, unlike a trigger, does not necessarily precipitate a change in policy."

Based on the current FOMC projections of the unemployment rate, this threshold would not be reached until some time in 2014. I don't expect QE thresholds to be announced this week, but this might happen later this year.

by Calculated Risk on 1/27/2013 10:32:00 AM

After this ... enough about me! From Alejandro Lazo at the LA Times: Blogger keeps finger on pulse of housing market. An excerpt:

These days, Calculated Risk has become a go-to source for Wall Street, the media, academics and anyone else looking for authoritative analysis of housing and the broader economy. When McBride makes a prediction — as when he called a housing bottom early in 2012 — the housing world takes note.

"If you only follow one economics blog, it has to be Calculated Risk," said James Hamilton, an economics professor at UC San Diego. "If you find yourself reaching a different conclusion from Bill about where the economy is headed, my recommendation is think again."

Although many economics blogs have ideological slants, Calculated Risk established a reputation as an objective source of commentary on an increasingly politicized topic. The blog's name — borrowed from that of a friend's boat — accurately implies an impartial, yet edgy, take on the economy.

But McBride himself has remained somewhat a mystery. Even while promoting his work, McBride shunned the spotlight personally. He wrote anonymously during the first years he blogged, which only heightened interest among a growing number of followers.

"He was one of the first people to stand up and, objectively, just by brutally falling back on the facts, just say that the emperor didn't have any clothes," said longtime reader Stan Humphries, Zillow.com's chief economist. "It was this deep mystery about who this guy actually was. I remember the first time I went and met him, it was like meeting Batman."

On Friday, from From Nick Timiraos at the WSJ: Six Housing Forecasters Who Got Things Right in 2012

After correctly calling the top of sales activity in 2005 and prices in 2006, [McBride] proclaimed last February that the “housing bottom is here” in a blog post that laid out all the dirty details. “I’ve tried over the years to call the turns when they arrive. I’m trying to call it when it happens and not wait six months or a year,” said Mr. McBride in an interview last February.

Saturday:
• Summary for Week Ending Jan 25th
• Schedule for Week of Jan 27th

by Calculated Risk on 1/26/2013 07:18:00 PM

Here is the unofficial problem bank list for Jan 25, 2012.

Changes and comments from surferdude808:

As anticipated, the FDIC released its enforcement actions through December 2012, which led to several changes to the Unofficial Problem Bank List. For the week, there were six removals and five additions leaving the list at 825 institutions with assets of $308.9 billion. A year ago, the list held 958 institutions with assets of $389.0 billion. For the month, the list was down by 13 and $4.1 billion in assets after two failures, four unassisted mergers, 15 action terminations, one voluntary liquidation, and nine additions.

First National Bank, Hays, KS ($79 million) found a merger partner to get off the list. The FDIC terminated actions against Farmers & Merchants Bank, Lakeland, GA ($597 million); Border State Bank, Greenbush, MN ($338 million); Stoneham Savings Bank, Stoneham, MA ($326 million); Paragon Bank, Wells, MN ($30 million); and Peoples State Bank of Madison Lake, Madison Lake, MN ($24 million).

The FDIC issued actions against Bank of Washington, Washington, MO ($853 million); Community First Bank, Inc., Walhalla, SC ($463 million Ticker: CFOK); Central Bank, Savannah, TN ($160 million); Mountain Valley Bank, Dunlap, TN ($99 million); and US Metro Bank, Garden Grove, CA ($88 million Ticker: USMT). Also, the FDIC issued a Prompt Corrective Action order against First South Bank, Spartanburg, SC ($336 million Ticker: FSBS).

Next week should be a quiet one for the changes to the list.

Earlier:
• Summary for Week Ending Jan 25th
• Schedule for Week of Jan 27th

by Calculated Risk on 1/26/2013 01:48:00 PM

Earlier:
• Summary for Week Ending Jan 25th

This will be a very busy week for economic data.  The key reports are the Q4 advance GDP report to be released on Wednesday, and the January employment report on Friday.

Other key reports include Case-Shiller house prices for November on Tuesday, the ISM manufacturing index on Friday, and auto sales on Friday.

There is an FOMC meeting on Tuesday and Wednesday, with an announcement scheduled for Wednesday at 2:15 PM ET. No significant changes are expected.

----- Monday, Jan 28th -----
8:30 AM: Durable Goods Orders for December from the Census Bureau. The consensus is for a 1.6% increase in durable goods orders.

10:00 AM ET: Pending Home Sales Index for December. The consensus is for a 0.3% decrease in the index.

10:30 AM: Dallas Fed Manufacturing Survey for January. This is the last of the regional surveys for January.  The consensus is a decrease to 4.0 from 6.8 in December (above zero is expansion).

----- Tuesday, Jan 29th -----
9:00 AM: S&P/Case-Shiller House Price Index for November. Although this is the November report, it is really a 3 month average of September, October and November.

This graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indexes through October 2012 (the Composite 20 was started in January 2000).

The consensus is for a 5.8% year-over-year increase in the Composite 20 index (NSA) for November. The Zillow forecast is for the Composite 20 to increase 5.3% year-over-year, and for prices to increase 0.4% month-to-month seasonally adjusted.

10:00 AM: Conference Board's consumer confidence index for January. The consensus is for the index to be unchanged at 65.1.

10:00 AM: Q4 Housing Vacancies and Homeownership report from the Census Bureau. This report is frequently mentioned by analysts and the media to report on the homeownership rate, and the homeowner and rental vacancy rates. However, this report doesn't track other measures (like the decennial Census and the ACS) and this survey probably shouldn't be used to estimate the excess vacant housing supply.

----- Wednesday, Jan 30th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for January. This report is for private payrolls only (no government). The consensus is for 172,000 payroll jobs added in January.   Even with the new methodology, the report still isn't that useful in predicting the BLS report.

8:30 AM: Q4 GDP (advance release). This is the advance release from the BEA. The consensus is that real GDP increased 1.0% annualized in Q4.

This graph shows the quarterly GDP growth (at an annual rate) for the last 30 years.

The Red column (and dashed line) is the consensus forecast for Q4 GDP.

2:15 PM: FOMC Meeting Announcement. No significant announcement is expected.

----- Thursday, Jan 31st -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to increase to 350 thousand from 330 thousand last week.

8:30 AM ET: Personal Income and Outlays for December. The consensus is for a 0.7% increase in personal income in December, and for 0.3% increase in personal spending. And for the Core PCE price index to increase 0.1%.

9:45 AM: Chicago Purchasing Managers Index for January. The consensus is for a decrease to 50.5, down from 51.6 in December.

----- Friday, Feb 1st -----
8:30 AM: Employment Report for January. The consensus is for an increase of 155,000 non-farm payroll jobs in January; there were also 155,000 jobs added in December. 

The consensus is for the unemployment rate to decrease to 7.7% in January.

Note: As usual, the January report will include revisions.  From the BLS: "the Current Employment Statistics (CES) survey will introduce revisions to nonfarm payroll employment, hours, and earnings data to reflect the annual benchmark adjustment for March 2012 and updated seasonal adjustment factors. Not seasonally adjusted data beginning with April 2011 and seasonally adjusted data beginning with January 2008 are subject to revision."

For the Household survey, from the BLS: "Effective with the release of The Employment Situation for January 2013, scheduled for February 1, 2013, new population controls will be used in the monthly household survey estimation process."

The second employment graph shows the percentage of payroll jobs lost during post WWII recessions through December.

The economy has added 5.8 million private sector jobs since employment bottomed in February 2010 including preliminary benchmark revision (5.2 million total jobs added including all the public sector layoffs).

There are still 3.1 million fewer private sector jobs now than when the recession started in 2007 (including benchmark revision).

9:00 AM: The Markit US PMI Manufacturing Index.  The consensus is for an increase to 55.5, up from 54.0.

9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (final for January). The consensus is for a reading of 71.5, up from 71.3.

10:00 AM ET: ISM Manufacturing Index for January.

Here is a long term graph of the ISM manufacturing index. The ISM manufacturing index indicated expansion in December at 50.7% (dashed line). The employment index was at 48.4% in December, and the new orders index was at 50.3%. The consensus is for PMI to be unchanged at 50.7%. (above 50 is expansion).

10:00 AM: Construction Spending for December. The consensus is for a 0.8% increase in construction spending.

All day: Light vehicle sales for January. The consensus is for light vehicle sales to be at 15.3 million SAAR in January (Seasonally Adjusted Annual Rate) unchanged from the December rate.

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the December sales rate. 

Edmunds.com is forecasting:

Edmunds.com ... forecasts that 1,045,587 new cars and trucks will be sold in the U.S. in January for an estimated Seasonally Adjusted Annual Rate (SAAR) of 15.3 million light vehicles. The projected sales will be ... a 14.5 percent increase from January 2012.

by Calculated Risk on 1/26/2013 09:30:00 AM

This was a light week for economic data.

The housing data - new and existing home sales - appeared a little weak in December, but the underlying details were solid.  For some some commentary on the reports see: Existing Home Sales: Another Solid Report and New Home Sales and Distressing Gap. The housing recovery is ongoing.

Other positive data included a sharp drop in the 4-week average of initial weekly unemployment claims, further expansion in the Architecture Billings Index, and an increase in the ATA trucking index.

On the negative side, both the Richomd and Kansas City Fed manufacturing indexes indicated contraction in January. However, the Markit Flash PMI (for manufacturing was fairly strong).

The NMHC quarterly apartment survey indicated some loosening in the apartment market suggesting the decline in the vacancy rate might slow or even stop (just one quarter of survey results though). This will be something to watch carefully (last graph below).

Next week will be very busy!

And here is a summary of last week in graphs:

• New Home Sales at 369,000 SAAR in December

Click on graph for larger image in graph gallery.

The Census Bureau reports New Home Sales in December were at a seasonally adjusted annual rate (SAAR) of 369 thousand. This was down from a revised 398 thousand SAAR in November (revised up from 377 thousand). Sales for September and October were revised up too.

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

Annual 2012 sales were up almost 20% compared to 2011:

"An estimated 367,000 new homes were sold in 2012. This is 19.9 percent above the 2011 figure of 306,000."

The second graph shows New Home Months of Supply.

The months of supply increased in December to 4.9 months from 4.5 months in November.

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 December was 151,000. This represents a supply of 4.9 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 just above the record low in December. The combined total of completed and under construction is also just above the record low since "under construction" is starting to increase.

This was below expectations of 388,000 sales in December, but with the strong upward revision to November sales (and smaller upward revisions to September and October) this was another solid report.

New Home Sales graphs
• Existing Home Sales in December: 4.94 million SAAR, 4.4 months of supply

Click on graph for larger image.

The NAR reports: Existing-Home Sales Slip in December, Prices Continue to Rise; 2012 Totals Up
This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in December 2012 (4.94 million SAAR) were 1.0% lower than last month, and were 12.8% above the December 2011 rate.

The next graph shows nationwide inventory for existing homes.

According to the NAR, inventory declined to 1.82 million in December down from 1.99 million in November. This is the lowest level of inventory since January 2001. Inventory is not seasonally adjusted, and usually inventory decreases from the seasonal high in mid-summer to the seasonal lows in December and January.

The next graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory decreased 21.6% year-over-year in December from December 2011. This is the 22nd consecutive month with a YoY decrease in inventory.

Months of supply declined to 4.4 months in December, the lowest level since May 2005.

This was below expectations of sales of 5.10 million, but right at Tom Lawler's forecast. For existing home sales, the key number is inventory - and the sharp year-over-year decline in inventory is a positive for housing.

All current Existing Home Sales graphs
• AIA: "Fifth Consecutive Month of Gains in Architecture Billings Index"

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

From AIA: Fifth Consecutive Month of Gains in Architecture Billings Index

This graph shows the Architecture Billings Index since 1996. The index was at 52.0 in December, down from 53.2 in November. Anything above 50 indicates expansion in demand for architects' services.

According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. This suggests some increase in CRE investment in 2013.

• Weekly Initial Unemployment Claims decline to 330,000

The DOL reports:

In the week ending January 19, the advance figure for seasonally adjusted initial claims was 330,000, a decrease of 5,000 from the previous week's unrevised figure of 335,000. The 4-week moving average was 351,750, a decrease of 8,250 from the previous week's revised average of 360,000.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 351,750.

This is the lowest level for the 4-week average since early 2008. Note: Data for January has large seasonal adjustments - and can be very volatile, but this is still good news.

Weekly claims were below the 360,000 consensus forecast.

• NMHC Apartment Survey: Market Conditions Loosen Slightly


From the National Multi Housing Council (NMHC): Expansion Moderates for Apartment Markets in January

This graph shows the quarterly Apartment Tightness Index. Any reading above 50 indicates tightening from the previous quarter. This quarterly decline followed eleven consecutive quarters with tighter market conditions.

The recent Reis data showed apartment vacancy rates fell in Q4 2012 to 4.5%, down from 4.7% in Q3 2012. As Obrinsky noted, markets are still tight, but this might suggest the vacancy rate will stop declining (caveat: this is just one quarter of survey data and the index might bounce back).

On supply: Even though multifamily starts have been increasing, completions lag starts by about a year - so the builders are still trying to catch up. There will be many more completions in 2013 than in 2012, increasing the supply.

As I've mentioned before, this index helped me call the bottom for effective rents (and the top for the vacancy rate) early in 2010. This survey now suggests vacancy rates might stop falling - a possible significant market change - although apartment markets are still tight, so rents will probably continue to increase.

by Calculated Risk on 1/25/2013 09:20:00 PM

Zillow Forecast: November Case-Shiller Composite-20 Expected to Show 5.3% Increase from One Year Ago

On [Tuesday] January 29th, the Case-Shiller Composite Home Price Indices for November will be released. Zillow predicts that the 20-City Composite Home Price Index (non-seasonally adjusted [NSA]) will be up by 5.3 percent on a year-over-year basis, while the 10-City Composite Home Price Index (NSA) will be up 4.5 percent on a year-over-year basis. The seasonally adjusted (SA) month-over-month change from October to November will be 0.3 percent for both the 20-City Composite and the 10-City Composite Home Price Index (SA).

To forecast the Case-Shiller indices we use past data from Case-Shiller, as well as the Zillow Home Value Index (ZHVI), which is available a month in advance of Case-Shiller numbers, paired with foreclosure re-sale numbers, which we also have available a month prior to Case-Shiller numbers. Together, these data points enable us to reliably forecast the Case-Shiller 10-City and 20-City Composite indices. The ZHVI does not include foreclosure re-sales and closed 2012 (December) with home values up 5.9% from year-ago levels. We expect home value appreciation to moderate in 2013, rising only 3.3 percent from December 2012 to December 2013. Further details on our forecast can be found here.

Zillow’s December 2012 data can be found here.

Zillow's forecasts for Case-Shiller have been pretty close.  Right now it looks like Case-Shiller will be over 6% in 2012 (through the December / Q4 reports to be released in February).

		Case Shiller Composite 10		Case Shiller Composite 20
		NSA	SA	NSA	SA
Case Shiller (year ago)	Nov 2011	151.41	150.49	138.19	137.37
Case-Shiller (last month)	Oct 2012	158.77	156.61	146.08	144.12
Zillow Nov Forecast	YoY	4.5%	4.5%	5.3%	5.3%
	MoM	-0.3%	0.3%	-0.4%	0.4%
Zillow Forecasts1		158.3	157.2	145.5	144.7
Current Post Bubble Low		146.46	149.40	134.07	136.70
Date of Post Bubble Low		Mar-12	Jan-12	Mar-12	Jan-12
Above Post Bubble Low		8.1%	5.2%	8.5%	5.8%
1Estimate based on Year-over-year and Month-over-month Zillow forecasts

by Calculated Risk on 1/25/2013 05:46:00 PM

From Nick Timiraos at the WSJ: Six Housing Forecasters Who Got Things Right in 2012

A few analysts, of course, did offer housing forecasts at the beginning of the past year that turned out to be largely correct. What’s more: some of these analysts had also accurately forecast the housing sector’s slowdown as the market neared its peak in 2005 and 2006.

Here are the six forecasters.

On Tom Lawler:

Last year, he began writing about how Phoenix had hit a “bottom” in real estate, a prediction that became the genesis of this Page One story in the Journal last year. Nationally, Mr. Lawler called for gains of nearly 20% in new home sales to an annual rate of 365,000 [the Census Bureau reported 367,000 this morning] and gains of around 24% in total housing starts (preliminary estimates show they were up around 28%).

Thanks to Nick - I appreciate the mention!  (others mentioned include Ivy Zelman, Glenn Kelman, Joseph LaVorgna and John R. Talbott).

by Calculated Risk on 1/25/2013 03:43:00 PM

From HotelNewsNow.com: STR: US results for week ending 19 January

In year-over-year comparisons, occupancy was up 6.1 percent to 54.5 percent, average daily rate rose 5.6 percent to US$105.73 and revenue per available room increased 12.1 percent to US$57.57.

The 4-week average of the occupancy rate is back to normal levels.

Note: ADR: Average Daily Rate, RevPAR: Revenue per Available Room.

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Click on graph for larger image.

The red line is for 2013, yellow is for 2012, blue is "normal" and black is for 2009 - the worst year since the Great Depression for hotels.

The occupancy rate will continue to increase over the next few months as business travel picks up in the Spring. This is a key period for the hotel industry and the occupancy rate was still weak early in 2012 (the Summer and Fall occupancy rate was close to normal in 2012).

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

by Calculated Risk on 1/25/2013 11:58:00 AM

The Census Bureau reported a month-to-month decline in new home sales in December, but sales for the three previous months were revised up - so 2012 annual sales were at the expected level of 367 thousand (before further revisions).  This was an increase of 19.9% from 2011.

Note: I also expect sales for December will be revised up (almost all the recent revisions have been up).

This table shows the annual sales rate for the last eight years.

Annual New Home Sales
Year	Sales (000s)	Change in Sales
2005	1,283	6.7%
2006	1,051	-18.1%
2007	776	-26.2%
2008	485	-37.5%
2009	375	-22.7%
2010	323	-13.9%
2011	306	-5.3%
2012	367	19.9%

Even with the sharp increase in sales, 2012 was the third lowest year for new home sales since the Census Bureau started tracking sales in 1963. The two lowest years were 2010 and 2011.

Note: For 2013, estimates are sales will increase to around 450 to 460 thousand, or another 22% to 25% on an annual basis.

My guess is sales will rise to around 800 thousand per year in a few years, but others think the next peak may be lower, perhaps closer to 700 thousand.  I think the demographics support close to 800 thousand per year, but even if sales only rise to the average of 664 thousand for the '80s and '90s, sales would still increase over 80% from the 2012 level.

And here is another update to the "distressing gap" graph that I first started posting over four years ago to show the emerging gap caused by distressed sales.  Now I'm looking for the gap to start to close over the next few years.

The "distressing gap" graph shows existing home sales (left axis) and new home sales (right axis) through December. 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 kept existing home sales elevated, and depressed new home sales since builders weren't able to compete with the low prices of all the foreclosed properties.

I don't expect much of an increase in existing home sales (distressed sales will slowly decline and be offset by more conventional sales). But I do expect this gap to close - mostly from an increase in new home sales.

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.

Earlier:
• New Home Sales at 369,000 SAAR in December
• New Home Sales graphs

by Calculated Risk on 1/25/2013 10:00:00 AM

The Census Bureau reports New Home Sales in December were at a seasonally adjusted annual rate (SAAR) of 369 thousand. This was down from a revised 398 thousand SAAR in November (revised up from 377 thousand). Sales for September and October 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 December 2012 were at a seasonally adjusted annual rate of 369,000 ... This is 7.3 percent below the revised November rate of 398,000, but is 8.8 percent above the December 2011 estimate of 339,000."

Click on graph for larger image in graph gallery.

Annual 2012 sales were up almost 20% compared to 2011:

"An estimated 367,000 new homes were sold in 2012. This is 19.9 percent above the 2011 figure of 306,000."

The second graph shows New Home Months of Supply.

The months of supply increased in December to 4.9 months from 4.5 months in November.

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 December was 151,000. This represents a supply of 4.9 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 just above the record low in December. The combined total of completed and under construction is also just above the record low since "under construction" is starting to increase.

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

In December 2012 (red column), 26 thousand new homes were sold (NSA). Last year only 24 thousand homes were sold in December. This was the sixth weakest December since this data has been tracked. The high for December was 87 thousand in 2005.

New home sales were at 367 thousand in 2012, up almost 20% from 307 thousand in 2011. Also sales are finally near the lows for previous recessions too.

This was below expectations of 388,000 sales in December, but with the strong upward revision to November sales (and smaller upward revisions to September and October) this was another solid report. I'll have more soon ...

New Home Sales graphs