by Calculated Risk on 3/11/2013 08:17:00 PM

Here is Nomura's current US outlook:

Activity: In the 3 1/2 years since the Great Recession ended, real GDP has grown at a lackluster 2.1% pace and is tracking close to that pace in Q1 2013.

Lower-income households are in the process of ratcheting down spending in response to a higher tax burden, but aggregate demand is being held up by higher-income spenders reacting to rising wealth from equities and real estate. Fiscal policy remains a source of uncertainty for the outlook, but risks of a policy misstep have diminished. Our forecast for the US economy assumes that half of the 1 March spending cuts will be implemented this year, but it is looking more likely that the full sequester will remain in place. If so, our assumptions for government spending will need to be revisited. Congress is working to complete a continuing resolution (CR) before the 22 March Easter holiday break. The CR is expected to fund the federal government through the end of this fiscal year (30 September).

Providing a buffer against fiscal headwinds, the housing recovery continues to deepen. Home price increases are providing support for household confidence and we expect the wealth effect from real estate to help support aggregate demand.

Inflation: Our forecast for consumer price inflation to remain below 2% for the forecast horizon reflects the effects of a substantial output gap that has emerged from three years of sub-par growth in the economy, and limited risks from commodity prices.

Policy: We expect the FOMC to maintain its current longer-term asset purchase program through Q3 2013, and then begin to taper purchases as the recovery strengthens and outlook improves convincingly. Upcoming negotiations in Washington over the reprogramming of spending cuts and the budget are likely to prove very contentious.

Risks: Fiscal policy missteps and slower global growth remain the dominant risks to the outlook.

Nomura is projecting real GDP to increase 1.9% in 2013 (another sluggish year), and for the unemployment rate to fall to 7.5% in Q4. For housing starts, Nomura is forecasting an increase to 1.02 million starts from 780 thousand in 2012 (a 30% increase).

Tuesday economic releases:
• At 7:30 AM ET, NFIB Small Business Optimism Index for February. The consensus is for an increase to 90.1 from 88.9 in January.

• At 10:00 AM, Job Openings and Labor Turnover Survey for January from the BLS. The number of job openings has generally been trending up, but openings were only up 2% year-over-year in December.

by Calculated Risk on 3/11/2013 03:26:00 PM

Economist Tom Lawler sent me the table below of short sales and foreclosures for several selected cities in February. 

Look at the right two columns in the table below (Total "Distressed" Share for Feb 2013 compared to Feb 2012). In every area that has reported distressed sales so far, the share of distressed sales is down year-over-year - and down significantly in most areas. 

Also there has been a decline in foreclosure sales just about everywhere. Look at the middle two columns comparing foreclosure sales for Feb 2013 to Feb 2012. Foreclosure sales have declined in all these areas, and some of the declines have been stunning (the Nevada sales were impacted by the new foreclosure law). 

Also there has been a shift from foreclosures to short sales. In all of these areas, short sales now out number foreclosures.

I think this is important: Imagine that the number of total existing home sales doesn't change over the next year - some people would argue that is "bad" news and the housing market isn't recovering. But also imagine that the share of distressed sales declines 20%, and conventional sales increase to make up the difference. That would be a positive sign - and that is what appears to be happening.

An example would be Sacramento (I posted data on Sacramento earlier today).  In Sacramento, total sales were down 14% in Feb 2013 compared to Feb 2012, but conventional sales were up 42%!  I'd say that is a positive sign.

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share
	13-Feb	12-Feb	13-Feb	12-Feb	13-Feb	12-Feb
Las Vegas	37.9%	29.3%	10.2%	42.0%	48.1%	71.3%
Reno	37.0%	28.0%	13.0%	42.0%	50.0%	70.0%
Phoenix	15.0%	28.1%	13.8%	23.3%	28.8%	51.4%
Sacramento	30.3%	31.9%	13.5%	33.9%	43.8%	65.8%
Mid-Atlantic (MRIS)	13.6%	16.4%	12.1%	17.5%	25.6%	33.9%
Hampton Roads					34.2%	36.0%
Charlotte					15.9%	18.7%
Memphis*			27.8%	36.6%
*share of existing home sales, based on property records

by Calculated Risk on 3/11/2013 12:10:00 PM

Last November, I mentioned a recession probability chart from the St Louis Fed that was making the rounds, and that some people were misusing the chart to argue a new recession was starting in the US.  Below is an update to the chart.

A few weeks later - also in November - the author, University of Oregon Professor Jeremy Piger, posted some FAQs and data for the chart online. Professor Piger writes:

2. How should I interpret these probabilities as a recession signal?

Historically, three consecutive months of smoothed probabilities above 80% has been a reliable signal of the start of a new recession, while three consecutive months of smoothed probabilities below 20% has been a reliable signal of the start of a new expansion. For an analysis of the performance of the model for identifying new turning points in real time, see:

Chauvet, M. and J. Piger, “A Comparison of the Real-Time Performance of Business Cycle Dating Methods,” Journal of Business and Economic Statistics, 2008.

Click on graph for larger image.

Here is the current chart from FRED at the St Louis Fed.

Right now, by this method, the odds of the US currently being in a recession are very low (close to zero). Some day I'll be on recession watch again (not in the near future), and this is one of the tools I'll be using.

by Calculated Risk on 3/11/2013 10:06:00 AM

Note: I've been following the Sacramento market to look for changes in the mix of house sales in a distressed area over time (conventional, REOs, and short sales). The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

Over the last two years there was a dramatic shift from REO to short sales, and the percentage of distressed sales declined.

This data suggests continued improvement in the Sacramento market.

In February 2013, 43.8% of all resales (single family homes and condos) were distressed sales. This was down from 44.5% last month, and down from 65.8% in February 2012. This is the lowest percentage of distressed sales - and therefore the highest percentage of conventional sales - since the association started tracking the data.

The percentage of REOs decreased to 13.5%, and the percentage of short sales was unchanged at 30.3%.

Here are the statistics.

Click on graph for larger image.

This graph shows the percent of REO sales, short sales and conventional sales.

There has been an increase in conventional sales recently, and there were more than twice as many short sales as REO sales in February. 

Total sales were down from February 2012, but conventional sales were up 42% compared to the same month last year. This is exactly what we expect to see in an improving distressed market - flat or even declining overall sales as distressed sales decline, and conventional sales increase.

Active Listing Inventory for single family homes declined 51.1% from last February.

Cash buyers accounted for 39.5% of all sales (frequently investors), and median prices were up sharply year-over-year (the mix has changed).

This continues to move in the right direction, although the market is still in distress. A "normal" market would be mostly blue on the graph, and this market is a long way from "normal". We are seeing a similar pattern in other distressed areas, with a move to more conventional sales, and a shift from REO to short sales. This is a sign of a recovering market.

by Calculated Risk on 3/10/2013 10:30:00 PM

Weekend:
• Summary for Week Ending March 8th
• Schedule for Week of March 10th

The Asian markets are mixed tonight with the Nikkei up 0.7%, and Shanghai Composite down 0.3%.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures and Dow futures are mostly flat (fair value).

Oil prices are down a little with WTI futures at $91.73 per barrel and Brent at $110.43 per barrel.

Below is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are down about 7 cents over the last two weeks after increasing more than 50 cents per gallon from the low last December.

If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent; gasoline prices in most of the U.S. are impacted more by Brent prices.

Orange County Historical Gas Price Charts Provided by GasBuddy.com

by Calculated Risk on 3/10/2013 02:44:00 PM

I've been asked several times about the recent ECRI recession call (obviously I disagreed with their incorrect recession call in 2011 - I wasn't even on recession watch then and I'm not on recession watch now - and I also think ECRI is wrong about a recession starting in mid-2012). Several people have written about ECRI's call, see Menzie Chinn at Econbrowser, NDD at the Bonddad blog, and Henry Blodget at Business Insider.

It seems to me ECRI is trying to make this an academic exercise and hoping for some significant downward revisions. Right now the data doesn't indicate a recession in 2012, but, as Menzie Chinn notes, "all of these series will be revised, so one wouldn’t want to state definitively we are not in a recession – therein lies the path to embarrassment. But the case still has to be made for recession."

But why do we care? Here is a repeat of a post I wrote in early 2011 (with updated tables and charts):

From 2011 [updates in brackets]: Here is something very different. This is NOT intended as investment advice.

Why is there so much focus on the business cycle? For companies, especially cyclical companies, the reason is obvious – it helps with planning, staffing and investment. [Update: Most cyclical companies are expanding now]

But why are investors so focused on the business cycle? Obviously earnings decline in a recession, and stock prices fall too. The following graph shows the year-over-year (YoY) change in the S&P 500 (using average monthly prices) since 1970. Notice that the market usually declines YoY in a recession.

Note: Because this is “year-over-year” there is a lag to the S&P 500 data. [Graph updated to March 2013]

Click on graph for larger image.

So calling a recession isn’t just an academic exercise, there is some opportunity to preserve capital.

Not all downturns in the stock market are associated with recessions. As an example, the 1987 market crash was during an economic expansion. And the stock bubble collapse lasted from March 2000 through early 2003 – and the only official economic recession during that period was 7 months in 2001.

Although I don’t give investment advice, I think investors should measure their performance with some index. Warren Buffett likes to use the S&P 500 index, so I also used the S&P 500 for this exercise.

Imagine if we could call recessions in real time, and if we could predict recoveries in advance. The following table shows the performance of a buy-and-hold strategy (with dividend reinvestment), compared to a strategy of market timing based on 1) selling when a recession starts, and 2) buying 6 months before a recession ends.

For the buy and sell prices, I averaged the S&P 500 closing price for the entire month (no cherry picking price – just cherry picking the timing with 20/20 hindsight).

I assumed an investor started at four different times, in January of 1970, 1980, 1990, and 2000 [UPDATE: added 2010 start].

S&P 500 Annualized Return, including dividends
Return from Start Date			Recession Timing Sensitivity
Start Investing	Buy and Hold	Recession Timing	Two Months Early	One Month Early	One Month Late	Two Months Late
Jan-70	8.92%	13.09%	12.15%	12.81%	13.01%	12.46%
Jan-80	9.90%	13.52%	13.37%	13.38%	13.71%	12.97%
Jan-90	7.80%	12.30%	11.91%	12.20%	12.23%	11.65%
Jan-00	1.37%	6.88%	7.49%	7.22%	7.02%	7.17%
Jan-10	11.18%	11.18%	---	---	---	---

The “recession timing” column gives the annualized return for each of the starting dates. Timing the recession correctly always outperforms buy-and-hold. The last four columns show the performance if the investor is two months early (both in and out), one month early, one month late, and two months late. The investor doesn’t have to be perfect!

Note: This includes dividends, but not taxes. Also I assumed no interest earned when the investor is out of the market (money in the mattress).

The second table provides the same information, but this time in dollars (assuming a $10,000 initial investment). Notice that someone could have bought the S&P 500 index in January 2000, and they’d be up about $150 [March 2013 Update: Up $1,970] now using buy-and-hold even though the market is still below the January 2000 average price of 1425 [Update: Now above January 2000]. The positive return is due to dividends.

S&P 500: Value of $10,000 Investment, including dividends
Value based on Start Date			Recession Timing Sensitivity
Start Investing	Buy and Hold	Recession Timing	Two Months Early	One Month Early	One Month Late	Two Months Late
Jan-70	$399,910	$1,582,190	$1,120,170	$1,426,530	$1,537,910	$1,257,860
Jan-80	$228,630	$520,810	$499,670	$500,540	$549,080	$447,700
Jan-90	$56,920	$116,550	$108,230	$114,250	$115,050	$103,010
Jan-00	$11,970	$21,020	$22,400	$21,770	$21,330	$21,680
Jan-10	$13,990	$13,990	---	---	---	---

Unfortunately forecasters have a terrible record of predicting downturns. The running joke is that forecasters have predicted 9 of the last 5 recessions! Although a forecaster doesn’t have to be perfect, they still have to be right. And that is very rare.

As economist Victor Zarnowitz said way back in 1960: “The record of predicting turning points — changes in the direction of economic activity — is on the whole poor." Forecasting hasn't improved much since then.

As an example, here are some comments from then Fed Chairman Alan Greenspan in 1990 (a recession began in July 1990):

“In the very near term there’s little evidence that I can see to suggest the economy is tilting over [into recession].”
Chairman Greenspan, July 1990

“...those who argue that we are already in a recession I think are reasonably certain to be wrong.”
Greenspan, August 1990

“... the economy has not yet slipped into recession.”
Greenspan, October 1990

I'd say he missed that downturn. Of course Wall Street and Fed Chairmen are notoriously bad at calling downturns.

But the track record for calling recoveries isn’t much better. ... Calling recessions is a mug’s game, but I like to play. I was very lucky with the recent recession, but the key wasn’t calling the end in June 2009 (I thought it ended in July), but looking for the bottom in early 2009 (that is why I posted several times in early 2009 that I was looking for the sun).

This is NOT intended as investment advice. I am NOT an investment advisor. Just some (hopefully) fun musing ...

[Final Update: If investors sold when ECRI first made their recession call in Sept 2011, they would have a missed around a 30% increase in the market  This shows why trying to add recession timing is difficult; investors have to be correct on the business cycle].

by Calculated Risk on 3/10/2013 11:31:00 AM

Earlier on the employment report:
• February Employment Report: 236,000 Jobs, 7.7% Unemployment Rate
• Employment Report Comments and more Graphs
• All Employment Graphs

A few more employment graphs ...

Duration of Unemployment
This graph shows the duration of unemployment as a percent of the civilian labor force. The graph shows the number of unemployed in four categories: less than 5 week, 6 to 14 weeks, 15 to 26 weeks, and 27 weeks or more.

The general trend is down for all categories, but only the less than 5 weeks is back to normal levels.

The the long term unemployed is around 3.1% of the labor force - and the number (and percent) of long term unemployed remains a serious problem.

Unemployment by Education
This graph shows the unemployment rate by four levels of education (all groups are 25 years and older).

Unfortunately this data only goes back to 1992 and only includes one previous recession (the stock / tech bust in 2001). Clearly education matters with regards to the unemployment rate - and it appears all four groups are generally trending down.

Although education matters for the unemployment rate, it doesn't appear to matter as far as finding new employment (all four categories are only gradually declining).

Note: This says nothing about the quality of jobs - as an example, a college graduate working at minimum wage would be considered "employed".

Diffusion Indexes
This is a little more technical. The BLS diffusion index for total private employment was at 63.6 in February, down slightly from 64.7 in January.   This was the fifth consecutive month over 60.   This index has averaged 60.5 over the last 36 months; the best three year period since the '90s.

For manufacturing, the diffusion index increased to 60.6, up from 57.4 in January.

Think of this as a measure of how widespread job gains are across industries. The further from 50 (above or below), the more widespread the job losses or gains reported by the BLS. From the BLS:

Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment.

Job growth for both total private employment and manufacturing were fairly widespread in February (both above 60).  This is a good sign and suggests many industries are hiring (not just a few).

Earlier:
• Summary for Week Ending March 8th
• Schedule for Week of March 10th

by Calculated Risk on 3/09/2013 05:12:00 PM

Here is the unofficial problem bank list for Mar 8, 2013.

Changes and comments from surferdude808:

The FDIC got back to closing a bank this week and terminated an action. In all, there were three removals this week that leave the Unofficial Problem Bank List at 805 institutions with assets of $296.4 billion. A year ago, the list held 956 institutions with assets of $383.4 billion.

FDIC terminated the action against Bank of the Cascades, Bend, OR ($1.3 billion Ticker: CACB). Mojave Desert Bank, National Association, Mojave, CA ($104 million) merged through an unassisted acquisition with Mission Bank, Bakersfield, CA. As hard as it may be to believe, Georgia lost another bank this week, which is the 85th failure in the state at a cost of $11.4 billion since the on-set of the financial crisis. Frontier Bank, LaGrange, GA ($259 million Ticker: FIEC) failed after being under a Consent Order issued on February 15, 2012.

Next week, we anticipate the OCC will release its actions through mid-February 2013.

Earlier:
• Summary for Week Ending March 8th
• Schedule for Week of March 10th

by Calculated Risk on 3/09/2013 01:11:00 PM

Earlier:
• Summary for Week Ending March 8th

The key reports for this week will be the February retail sales report on Wednesday, and February Industrial Production on Friday.

Also for manufacturing, the March NY Fed (Empire state) survey will be released on Friday.

For prices, CPI and PPI for February will be released.

----- Monday, Mar 11th-----
No releases scheduled.

----- Tuesday, Mar 12th -----
7:30 AM ET: NFIB Small Business Optimism Index for February. The consensus is for an increase to 89.5 from 88.0 in December.

10:00 AM: Job Openings and Labor Turnover Survey for January from the BLS.

This graph shows job openings (yellow line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings decreased in December to 3.617 million, down from 3.790 million in November. The number of job openings (yellow) has generally been trending up, but openings are only up 2% year-over-year compared to December 2011.

----- Wednesday, Mar 13th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM ET: Retail sales for February will be released.

This graph shows monthly retail sales and food service, seasonally adjusted (total and ex-gasoline) through January. Retail sales are up 25.7% from the bottom, and now 9.9% above the pre-recession peak (not inflation adjusted)

The consensus is for retail sales to increase 0.5% in February (boosted by higher gasoline prices), and to increase 0.5% ex-autos.

10:00 AM: Manufacturing and Trade: Inventories and Sales (business inventories) report for January.  The consensus is for a 0.3% increase in inventories.

----- Thursday, Mar 14th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to increase to 350 thousand from 340 thousand last week.

8:30 AM: Producer Price Index for February. The consensus is for a 0.6% increase in producer prices (0.1% increase in core).

----- Friday, Mar 15th -----
8:30 AM: Consumer Price Index for February. The consensus is for a 0.5% increase in CPI in February (due to higher gasoline prices) and for core CPI to increase 0.2%.

8:30 AM: NY Fed Empire Manufacturing Survey for March. The consensus is for a reading of 8.5, down from 10.0 in February (above zero is expansion).

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for February.

This shows industrial production since 1967 through January.

The consensus is for a 0.3% increase in Industrial Production in February, and for Capacity Utilization to increase to 79.3%.

9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (preliminary for March). The consensus is for a reading of 77.7, up from 77.6.

by Calculated Risk on 3/09/2013 08:49:00 AM

WARNING: Don sunglasses before reading! :-)

Clearly the economy was picking up before the sequestration budget cuts. We will find out over the next two months how much the budget cuts will slow the economy.

In a research note last night, Goldman Sachs economists asked: Are We Already over the Hump?

In our annual forecast rollout last November, we predicted that the US economy would move “over the hump” of fiscal contraction, with still-sluggish growth in most of 2013 followed by a gradual acceleration to an above-trend pace in late 2013 and 2014. But the recent data raise the tantalizing prospect that the “hump” may already have occurred. ... The most visible data point is the strong February employment report showing a nonfarm payroll gain of 236,000 and a drop in the unemployment rate to 7.7%. But arguably the more important one is the apparent resilience of consumer spending despite the $200bn tax increase that took effect in January. ... In our view, it is still too early to close the books on the early-2013 consumption slowdown. After all, we only have auto sales and consumer confidence in hand for February so far. And we still think that the weakness in federal spending will restrain growth in coming quarters. But if consumption picture holds up in light of upcoming data, a modest upward adjustment to our growth forecast would probably make sense.
emphasis added

The key report for the week was the February employment report. The BLS reported 236,000 payroll jobs added and the unemployment rate declined to 7.7%; this is the lowest unemployment rate since 2008 (246,000 private sector jobs, and another 10,000 public sector jobs lost).  Overall this was a solid report and above expectations, although there is still a long way to go.

The ISM non-manufacturing index (service) increased (highest since February 2012), weekly initial unemployment claims declined (lowest 4 week average since March 2008), the ADP employment report was above expectations, and mortgage delinquencies declined.

The only negative was the increase in the trade deficit, but overall the data was better than expected.

Here is a summary of last week in graphs:

• February Employment Report: 236,000 Jobs, 7.7% Unemployment Rate

Click on graph for larger image.

"Total nonfarm payroll employment increased by 236,000 in February, and the unemployment rate edged down to 7.7 percent." The headline number was above expectations of 171,000 payroll jobs added.  Employment for January was revised lower, but jobs added in December was revised higher.

NOTE: This graph is ex-Census meaning the impact of the decennial Census temporary hires and layoffs is removed to show the underlying payroll changes.

The second graph shows the unemployment rate.

The unemployment rate decreased to 7.7% from 7.9% in January.

The third graph shows the employment population ratio and the participation rate.


The Labor Force Participation Rate decreased slightly to 63.5% in February (blue line. This is the percentage of the working age population in the labor force.

The participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although a significant portion of the recent decline is due to demographics.

The Employment-Population ratio was unchanged at 58.6% in February (black line).

The fourth graph shows the job losses from the start of the employment recession, in percentage terms, compared to previous post WWII recessions. The dotted line is ex-Census hiring.

This shows the depth of the recent employment recession - worse than any other post-war recession - and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis.

This was a fairly solid employment report and better than expectations.

• ISM Non-Manufacturing Index indicates faster expansion in February

The February ISM Non-manufacturing index was at 56.0%, up from 55.2% in January. The employment index decreased in February to 57.2%, down from 57.5% in January. Note: Above 50 indicates expansion, below 50 contraction.

This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

This was above the consensus forecast of 55.0% and indicates faster expansion in February than in January.

• Trade Deficit increased in January to $44.4 Billion

The first graph shows the monthly U.S. exports and imports in dollars through January 2013.

"[T]otal January exports of $184.5 billion and imports of $228.9 billion resulted in a goods and services deficit of $44.4 billion, up from $38.1 billion in December, revised. January exports were $2.2 billion less than December exports of $186.6 billion. January imports were $4.1 billion more than December imports of $224.8 billion."

The trade deficit was above the consensus forecast of $43.0 billion.

Exports are 11% above the pre-recession peak and up 3.3% compared to January 2012; imports are near the pre-recession peak, and down 1% compared to January 2012.

The second graph shows the U.S. trade deficit, with and without petroleum, through January.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The increase in the trade deficit in January was mostly due to an increase in the volume of petroleum imports.

Oil averaged $94.08 per barrel in January, down slightly from $95.16 in December. 

The trade deficit with China increased to $27.8 billion in January, up from $26.0 billion in January 2012. Most of the trade deficit is still due to oil and China.

• Weekly Initial Unemployment Claims decrease to 340,000

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

"In the week ending March 2, the advance figure for seasonally adjusted initial claims was 340,000, a decrease of 7,000 from the previous week's revised figure of 347,000."

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 348,750 - this is the lowest level since March 2008.

Weekly claims were below the 355,000 consensus forecast. Note: Claims might increase soon due to the "sequestration" budget cuts.

• Q4 Flow of Funds: Household Mortgage Debt down $1.2 Trillion from Peak

The Federal Reserve released the Q4 2012 Flow of Funds report this week: Flow of Funds.

This graph shows homeowner percent equity since 1952.

Household percent equity (as measured by the Fed) collapsed when house prices fell sharply in 2007 and 2008.

In Q4 2012, household percent equity (of household real estate) was at 46.6% - up from Q3, and the highest since Q1 2008. This was because of both an increase in house prices in Q4 (the Fed uses CoreLogic) and a reduction in mortgage debt.

This graph shows household real estate assets and mortgage debt as a percent of GDP.

Mortgage debt declined by $6 billion in Q4. Mortgage debt has now declined by $1.2 trillion from the peak. Studies suggest most of the decline in debt has been because of foreclosures (or short sales), but some of the decline is from homeowners paying down debt (sometimes so they can refinance at better rates).  It appears the rate of decline is slowing.

The value of real estate, as a percent of GDP, was up in Q4 (as house prices increased), but is just above the lows of the last 30 years. However household mortgage debt, as a percent of GDP, is still historically very high, suggesting still more deleveraging ahead for certain households.

• CoreLogic: House Prices up 9.7% Year-over-year in January

From CoreLogic: CoreLogic Home Price Index Rises by Almost 10 Percent Year Over Year in January

This graph shows the national CoreLogic HPI data since 1976. January 2000 = 100.

The index was up 0.7% in January, and is up 9.7% over the last year.

The index is off 26.4% from the peak - and is up 10.1% from the post-bubble low set in February 2012.