by Calculated Risk on 6/20/2016 08:47:00 AM

In addition to Case-Shiller, and CoreLogic, I'm also watching the FNC, Zillow and several other house price indexes.

FNC released their April 2016 index data.  FNC reported that their Residential Price Index™ (RPI) indicates that U.S. residential property values increased 1.1% from March to April (Composite 100 index, not seasonally adjusted). 

The 10 city MSA increased 1.6% (NSA), the 20-MSA RPI increased 1.5%, and the 30-MSA RPI increased 1.4% in April. These indexes are not seasonally adjusted (NSA), and are for non-distressed home sales (excluding foreclosure auction sales, REO sales, and short sales).

From FNC: FNC Index: April Home Prices Up 1.1%

The latest FNC Residential Price Index™ (RPI) indicated U.S. home prices rose quickly in April, up 1.1% at a seasonally unadjusted rate. On a year-over-year basis, prices continue to enjoy modest growth, rising 5.6% from a year ago.

Notes: In addition to the composite indexes, FNC presents price indexes for 30 MSAs. FNC also provides seasonally adjusted data.

The index is still down 12.2% from the peak in 2006 (not inflation adjusted).

Click on graph for larger image.

This graph shows the year-over-year change based on the FNC index (four composites) through April 2016. The FNC indexes are hedonic price indexes using a blend of sold homes and real-time appraisals.

Most of the other indexes are also showing the year-over-year change in the mid single digit range.

Note: The April Case-Shiller index will be released on Tuesday, June 28th.

by Calculated Risk on 6/19/2016 08:41:00 PM

The Brexit vote is on Thursday ...

Weekend:
• Schedule for Week of June 19, 2016

From CNBC: Pre-Market Data and Bloomberg futures: S&P are up 14 and DOW futures are up 140 (fair value).

Oil prices were down over the last week with WTI futures at $48.24 per barrel and Brent at $49.39 per barrel.  A year ago, WTI was at $60, and Brent was at $61 - so prices are down 20% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.33 per gallon (down about $0.45 per gallon from a year ago).

by Calculated Risk on 6/19/2016 11:43:00 AM

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

From the Port of Los Angeles: Double-Digit Growth Propels Port of Los Angeles to Busiest May in Port History

Overall cargo volumes at the Port of Los Angeles increased nearly 11 percent in May compared to the same period last year, marking the busiest May in the Port’s 109-year history. Total volumes registered at 770,409 Twenty-Foot Equivalents (TEUs), with container growth of 8.7 percent for the first five months of 2016 compared to last year.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Click on graph for larger image.

On a rolling 12 month basis, inbound traffic was up 0.7% compared to the rolling 12 months ending in April.   Outbound traffic was up 0.4% compared to 12 months ending in April.

The downturn in exports over the last year was probably due to the slowdown in China and the stronger dollar.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March (depending on the timing of the Chinese New Year).

In general exports are moving sideways and imports are gradually increasing.

by Calculated Risk on 6/18/2016 08:09:00 AM

The key economic reports this week are New and Existing Home Sales for May.

Fed Chair Janet Yellen will deliver the Semiannual Monetary Policy Report to the Congress on Tuesday and Wednesday.

----- Monday, June 20th -----
No economic releases are scheduled.

----- Tuesday, June 21st -----
10:00 AM ET: Testimony, Fed Chair Janet Yellen, Semiannual Monetary Policy Report to the Congress, Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.

----- Wednesday, June 22nd -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

9:00 AM: FHFA House Price Index for April 2016. This was originally a GSE only repeat sales, however there is also an expanded index.  The consensus is for a 0.6% month-to-month increase for this index.

10:00 AM: Existing Home Sales for May from the National Association of Realtors (NAR). The consensus is for 5.57 million SAAR, up from 5.45 million in April.

Housing economist Tom Lawler expects the NAR to report sales of 5.55 million SAAR in May.

10:00 AM ET: Testimony, Fed Chair Janet Yellen, Semiannual Monetary Policy Report to the Congress, Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.

During the day: The AIA's Architecture Billings Index for May (a leading indicator for commercial real estate).

----- Thursday, June 23rd -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 270 thousand initial claims, down from 277 thousand the previous week.

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

10:00 AM ET: New Home Sales for May from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the April sales rate.

The consensus is for a decrease in sales to 565 thousand Seasonally Adjusted Annual Rate (SAAR) in May from 619 thousand in April.

----- Friday, June 24th -----
8:30 AM: Durable Goods Orders for May from the Census Bureau. The consensus is for a 0.7% decrease in durable goods orders.

10:00 AM: University of Michigan's Consumer sentiment index (final for June). The consensus is for a reading of 94.1, down from the preliminary reading 94.0, and down from 94.7 in May.

by Calculated Risk on 6/17/2016 06:20:00 PM

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

"US horizontal oil rig counts were up 2 this week to 265, now 17 off the cycle trough five weeks ago.
...
US vertical rigs were up sharply, +7 to 48. We can now call the cycle bottom here for May 27."

Click on graph for larger image.

Graph Courtesy of Steven Kopits of Princeton Energy Advisors LLC.

CR Note: This graph is horizontal rig count only (not vertical).  The increase is still pretty minor.

by Calculated Risk on 6/17/2016 12:59:00 PM

Earlier: Housing Starts decreased to 1.164 Million Annual Rate in May

The housing starts report this morning was close to consensus, and there were upward revisions to the prior two months (combined).  Also starts were up 9.5% from May 2015.

The key take away from the report is that multi-family is slowing, and single family growth is ongoing year-over-year.

Click on graph for larger image.

This graph shows the month to month comparison between 2015 (blue) and 2016 (red).

Year-to-date starts are up 10.2% compared to the same period in 2015, but that will slow further with the more difficult comparisons for the remainder of the year.

Multi-family starts are up 2.5% year-to-date, and single-family starts are up 14.5% year-to-date.

Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).

These graphs use a 12 month rolling total for NSA starts and completions.

The blue line is for multifamily starts and the red line is for multifamily completions.

The rolling 12 month total for starts (blue line) increased steadily over the last few years, and completions (red line) have lagged behind - but completions have been catching up (more deliveries), and will continue to follow starts up (completions lag starts by about 12 months).

I think most of the growth in multi-family starts is probably behind us - in fact multi-family starts probably peaked in June 2015 (at 510 thousand SAAR) - although I expect solid multi-family starts for a few more years (based on demographics).

The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions.

Note the exceptionally low level of single family starts and completions.  The "wide bottom" was what I was forecasting several years ago, and now I expect several years of increasing single family starts and completions.

The housing recovery continues, however I expect most of the growth will be from single family going forward.

by Calculated Risk on 6/17/2016 10:18:00 AM

From the BLS: Regional and State Employment and Unemployment Summary

Unemployment rates were significantly higher in May in 5 states, lower in 4 states and the District of Columbia, and stable in 41 states, the U.S. Bureau of Labor Statistics reported today.
...
South Dakota and New Hampshire had the lowest jobless rates in May, 2.5 percent and 2.7 percent, respectively. The rate in Arkansas (3.8 percent) set a new series low. (All region, division, and state series begin in 1976.) Alaska had the highest unemployment rate, 6.7 percent.
emphasis added

Click on graph for larger image.

This graph shows the current unemployment rate for each state (red), and the max during the recession (blue). All states are well below the maximum unemployment rate for the recession.

The size of the blue bar indicates the amount of improvement.   The yellow squares are the lowest unemployment rate per state since 1976.

The states are ranked by the highest current unemployment rate. Alaska, at 6.7%, had the highest state unemployment rate.

The second graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 2006. At the worst of the employment recession, there were 11 states with an unemployment rate at or above 11% (red).

Currently no state has an unemployment rate at or above 7% (light blue); Only seven states and D.C are at or above 6% (dark blue).

by Calculated Risk on 6/17/2016 08:38:00 AM

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,164,000. This is 0.3 percent below the revised April estimate of 1,167,000, but is 9.5 percent above the May 2015 rate of 1,063,000.

Single-family housing starts in May were at a rate of 764,000; this is 0.3 percent above the revised April figure of 762,000. The May rate for units in buildings with five units or more was 396,000

Building Permits:
Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,138,000. This is 0.7 percent above the revised April rate of 1,130,000, but is 10.1 percent below the May 2015 estimate of 1,266,000.

Single-family authorizations in May were at a rate of 726,000; this is 2.0 percent below the revised April figure of 741,000. Authorizations of units in buildings with five units or more were at a rate of 381,000 in May.
emphasis added

Click on graph for larger image.

The first graph shows single and multi-family housing starts for the last several years.

Multi-family starts (red, 2+ units) decreased in May compared to April.  Multi-family starts are up 8% year-over-year.

Single-family starts (blue) increased in May, and are up 10% year-over-year.



The second graph shows total and single unit starts since 1968.

 The second graph shows the huge collapse following the housing bubble, and then - after moving sideways for a couple of years - housing is now recovering (but still historically low),

Total housing starts in May were close to expectations, and combined starts for March and April were revised up slightly.  I'll have more later ...

by Calculated Risk on 6/16/2016 08:45:00 PM

Friday:
• At 8:30 AM,Housing Starts for May. Total housing starts increased to 1.172 million (SAAR) in April. Single family starts increased to 778 thousand SAAR in April. The consensus is for 1.160 million in May, down from the April rate.

• At 10:00 AM, Regional and State Employment and Unemployment for May 2016

From Matthew Graham at Mortgage News Daily: Mortgage Rates Deeper into 3-Year Lows

[W]e find ourselves well into the lowest rates in more than three years, even if the pace of improvement is lagging the drop in US Treasury rates. ... The average lender is now down to 3.5% in terms of conventional 30yr fixed quotes for top tier scenarios.

Mortgage rates are getting close to all time lows.

by Calculated Risk on 6/16/2016 04:45:00 PM

From housing economist Tom Lawler:

Based on publicly-available state and local realtor/MLS reports from across the country released through today, I project that May existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 5.55 million in May, up 1.8% from April’s preliminary pace and up 4.9% from last May’s seasonally adjusted pace. Unadjusted sales should show a slightly higher YOY % gain, reflecting this May’s higher business-day count.

Local realtor/MLS data also suggest that existing home listings increased only slightly on the month (and by less than last May’s MoM gain), and I project that the inventory of existing homes for sale as estimated by the NAR for the end of May will be 2.16 million, up 0.9% from April’s preliminary estimate and down 5.3% from last May. Finally, I project that the NAR’s estimate of the median existing single-family home sales price for May will be up 5.3% YOY.

CR Note: The NAR is scheduled to release May Existing Home sales next Wednesday, and the early consensus is 5.64 million SAAR (probably too high).