by Calculated Risk on 9/09/2009 02:00:00 PM

From the Fed: Beige Book

Reports from the 12 Federal Reserve Districts indicate that economic activity continued to stabilize in July and August. Relative to the last report, Dallas indicated that economic activity had firmed, while Boston, Cleveland, Philadelphia, Richmond, and San Francisco mentioned signs of improvement. Atlanta, Chicago, Kansas City, Minneapolis, and New York generally described economic activity as stable or showing signs of stabilization; St. Louis remarked that the pace of decline appeared to be moderating. Most Districts noted that the outlook for economic activity among their business contacts remained cautiously positive.

The majority of Districts reported flat retail sales.
emphasis added

And on real estate:

Residential real estate markets remained weak, but signs of improvement continued to be noted. Chicago, Richmond, Boston, and San Francisco observed an uptick in sales over the last six weeks, while sales in the Philadelphia District were described as steady. ... Most Districts noted that demand remained stronger at the low-end of the housing market. Boston, Cleveland, Dallas, Kansas City, Richmond, and New York indicated that the first-time home buyer tax incentive was spurring sales. However, Philadelphia did note an upturn in sales at the high-end of the market. Reports on house prices generally indicated ongoing downward pressures ...

Reports on commercial real estate markets indicated that demand for space remained weak and that construction continued to decline in all Districts. Atlanta, Philadelphia, Richmond, and San Francisco reported that vacancy rates increased, while rates held steady in the Boston and Kansas City Districts and were mixed in New York. ... Commercial rents declined according to Boston, Chicago, New York, Philadelphia, and Richmond. Rent concessions were reported in the Richmond and San Francisco markets, and Richmond noted that some landlords had postponed property improvements in an effort to conserve cash. Construction remained at very low levels, with modest improvements noted in public construction in the Chicago, Cleveland, and Minneapolis Districts.

Stabilization is not new growth. Just more beige shoots ...

by Calculated Risk on 9/09/2009 12:10:00 PM

From Ryan Grim at the HuffPost: Cramdown Is Back: Banks Against Homeowners, Round 2 (ht Atrios)

House Financial Services Committee Chairman Barney Frank (D-Mass.) tells the Huffington Post he plans to revive the effort to give bankruptcy judges the authority to renegotiate home mortgages -- by making it part of this fall's much-anticipated financial regulatory reform bill.
...
On Tuesday, Frank was asked by HuffPost if he had plans to readdress cramdown. "Yes, as I will announce tomorrow, and I told this to bankers, given the slow pace of modifications, for whatever reason: they're not putting enough people on it, they're not taking it seriously, there are legal obstacles. As of now my intention would be to include the bankruptcy on primary residences in the reg reform."

For a history of mortgage Cram Downs, and why they are needed, see Tanta's Just Say Yes To Cram Downs . Some excerpts:

The prohibition of court-ordered modifications for mortgages on principal residences was created in 1978; between 1978 and 1993 most bankruptcy courts interpreted the law to mean that while interest-rate reduction or term-extension modifications were not allowed, home mortgages could still be crammed down.

In 1993, with Nobleman v. American Savings Bank, the Supreme Court held that the prohibition on modifications of principal-residence mortgage loans also included cram downs. The result is that borrowers who are upside down and who have toxic, high-rate mortgages are simply, in practical terms, unable to maintain their homes in Chapter 13.
...
I am fully in favor of removing restrictions on modifications of mortgage loans in Chapter 13, but not necessarily because that helps current borrowers out of a jam. I'm in favor of it because I think it will be part of a range of regulatory and legal changes that will help prevent future borrowers from getting into a lot of jams, which is to say that it will, contra MBA, actually help "stabilize" the residential mortgage market in the long term. Any industry that wants special treatment under the law because of the socially vital nature of its services needs to offer socially viable services, and since the industry has displayed no ability or willingness to quit partying on its own, then treat it like any other partier under BK law.

There is much more in Tanta's post.

Cram downs are in important step: as Ryan Grim notes in the HuffPost article, the mortgage modification programs are all "carrot" and the cram downs will provide a "stick", and more importantly, as Tanta noted, the cram downs will bring discipline to the mortgage industry.

by Calculated Risk on 9/09/2009 10:58:00 AM

From Teasury: Assistant Secretary for Financial Institutions Michael S. Barr Written Testimony on Stabilizing the Housing Market before the House Financial Services Committee, Subcommittee on Housing and Community Opportunity

... I want to highlight some key points of success:

We have signed contracts with over 45 servicers, including the five largest. Between loans covered by these servicers and loans owned or guaranteed by the GSEs, more than 85 percent of all mortgage loans in the country are now covered by the program.

Over 570,000 trial modifications have been offered under the program. Over 360,000 trial modifications are underway.
...
[W]e recognize that any modification program seeking to avoid preventable foreclosures has limits, HAMP included. Even before the current crisis, when home prices were climbing, there were still many hundreds of thousands of foreclosures. Therefore, even if HAMP is a total success, we should still expect millions of foreclosures, as President Obama noted when he launched the program in February.

Some of these foreclosures will result from borrowers who, as investors, do not qualify for the program. Others will occur because borrowers do not respond to our outreach. Still others will be the product of borrowers who bought homes well beyond what they could afford and so would be unable to make the monthly payment even on a modified loan.
emphasis added

It is that third category that is key - that is all the homeowners far underwater who bought homes they could never really afford.

by Calculated Risk on 9/09/2009 09:04:00 AM

From Bloomberg: Wealthy Families Succumb to Bankruptcy as Real Estate Crashes

Wealthy individuals’ Chapter 11 bankruptcy filings jumped 73 percent in the second quarter from a year earlier, according to the National Bankruptcy Research Center, a research firm in Burlingame, California.

More individuals or families with at least $1,010,650 in secured debt and $336,900 unsecured are using Chapter 11 of the U.S. bankruptcy code typically associated with business reorganizations. Falling U.S. home prices leave them unable to refinance or sell properties when they drop below the value of the mortgage, said Chicago bankruptcy attorney Joseph Baldi.

... Wealthier people filing for bankruptcy typically have large homes, two car payments and children in private schools, said Leslie Linfield, executive director of the Institute for Financial Literacy in Portland, Maine ...

“There are a lot of people with real estate, and they can’t afford it,” said Baldi ... “They can’t make the payments, and they can’t sell the house.”
emphasis added

Overall personal bankruptcies were up 36% in Q2 2009 compared to Q2 2008 - so high end bankruptcies are increasing twice as fast as the average.

This fits with the articles yesterday on Option ARMs and Interest Only loans that were used predominantly in mid-to-high end areas.

by Calculated Risk on 9/08/2009 11:12:00 PM

From David Streitfeld at the NY Times: The House Trap

An analysis for The New York Times by the real estate information company First American CoreLogic shows there are 2.8 million active interest-only home loans worth a combined total of $908 billion.

The interest-only periods, which put off the principal payments for five, seven or 10 years, are now beginning to expire. In the next 12 months, $71 billion of interest-only loans will reset. The year after, another $100 billion will reset. After mid-2011, another $400 billion will reset.

There are a several fascinating anecdotes in the article, including a professor who teaches real estate finance. Here is one:

“I understand I took a risk,” said [Dean Janis, a Southern California lawyer who bought a $950,000 home in 2004] “But I did not anticipate that the real estate market would go down 30 percent.” He talked with Wells Fargo about his options, and the lender said he had none.

IOs. Another wonderful affordability product.

by Calculated Risk on 9/08/2009 10:22:00 PM

HUD has a great tool to track FHA lender performance: Neighborhood Watch Early Warning System (ht TL)

Although the overall FHA default rate is 4.63%, the following lenders had 2 year default rates of 15% or more (only lenders with 100+ originations included). (Added: these are the two year default rates).

There are ten lenders with "perfect" records (100% default), but they only have one or two originations each.

And the winner is Mortgage Depot Inc. with a 48.65% default rate!

Note that Countrywide Home Loans Inc. is not Countrywide Bank FSB.

For a full screen version of the table click here.

The table is wide - use scroll bars to see all information!

NOTE: Columns are sortable - click on column header to sore

by Calculated Risk on 9/08/2009 05:58:00 PM

From Fitch: $134B of U.S. Option ARM RMBS To Recast by 2011

Of the $189 billion securitized Option ARM loans outstanding, 88% have yet to experience a recast event ... Of these loans that have not yet recast, 94% have utilized the minimum monthly payment to allow their loans to negatively amortize.
...
Further evidence of option ARM underperformance in the last year lies in the number of outstanding securitized Option ARMs either 90 days or more delinquent, in foreclosure or real estate-owned proceedings, which has increased from 16% to 37%. Total 30+ day delinquencies are now 46%, despite the fact that only 12% have recast and experienced an associated payment shock. Instead, negative and declining equity has presented a larger problem: due to high concentrations in California, Florida, and other states with rapidly declining home prices, average loan-to-value ratios have increased from 79% at origination to 126% today. 'Negative equity and payment shocks will continue as Option ARM loans recast in large numbers in the coming years,' said Somerville.

Fitch is just looking at securitized Option ARMs, not loans in bank portfolios like Wells Fargo with all the 10 year Pick-a-Pay recast periods.

The second paragraph is key - many of these borrowers are defaulting before the loans recast! From Bloomberg on a Barclays report in July: Option ARM Defaults Shrink Recast Wave, Barclays Says

The wave of “option” adjustable- rate mortgages recasting to higher payments, projected by some economists to represent a looming source of foreclosures that will hurt housing markets over the next few years, will be smaller “than feared” because many borrowers will default before their bills change, Barclays Capital analysts said.
...
About 40 percent of borrowers with option ARMs are already delinquent, and “many” of the others will start missing payments before their obligations change, the Barclays mortgage- bond analysts wrote in a July 24 report. ...

“The additional risk really will only be for borrowers who manage to stay current over the next couple of years and might default due to a payment shock,” the New York-based analysts including Sandeep Bordian and Jasraj Vaidya wrote.
...
More than $750 billion of option ARMs were originated between 2004 and 2008 ...

The real problem for Option ARMs is negative equity, and the surge in defaults is happening before the loans recast. As Fitch notes, modifications haven't been helpful for Option ARM borrowers because many are too far underwater:

To date, 3.5% of the approximately one million 2004-2007 vintage securitized Option ARM loans have been modified, in an attempt to mitigate effects from the payment shock. Modification types have included term extension, conversion to interest only loans, interest rate cuts, and others. These modifications have been somewhat successful, with 24% of modified Option ARM loans being 90+ days delinquent, compared with 37% of the overall Option ARM universe. However ... Fitch expects a high default percentage for modified Option ARM loans.

This is a somewhat confusing press release. The recasts will probably lead to higher defaults, but negative equity is the real problem.

by Calculated Risk on 9/08/2009 03:10:00 PM

From MarketWatch: U.S. consumer credit down record amount in July

UU.S. consumers reduced their credit burden by a record amount in July, the Federal Reserve reported Tuesday. Total seasonally adjusted consumer debt fell $21.55 billion, or at a 10.4% annual rate, in July to $2.47 trillion. This is the sixth straight monthly drop in consumer credit. ... This is the record 11th straight monthly drop in credit card debt.

Click on graph for larger image in new window.

This graph shows the year-over-year (YoY) change in consumer credit. Consumer credit is off 4.2% over the last 12 months. The previous record YoY decline was 1.9% in 1991.

Here is the Fed report: Consumer Credit

Consumer credit declined from $2,493.6 billion in June to $2,472.1 in July. Note: The Fed reports a simple annual rate (multiplies change in month by 12) as opposed to a compounded annual rate.

Note: Consumer credit does not include real estate debt.

by Calculated Risk on 9/08/2009 02:33:00 PM

Typically retail companies start hiring for the holiday season in October, and really increase hiring in November. Here is a graph that shows the historical net retail jobs added for October, November and December by year.

Click on graph for larger image in new window.

This really shows the collapse in retail hiring in 2008. This also shows how the season has changed over time - back in the '80s, retailers hired mostly in December. Now the peak month is November, and many retailers start hiring seasonal workers in October.

Here is a story from Bloomberg: Retail Hiring Shift May Show Growing Confidence in Recovery (ht Brian, Mike)

U.S. discount, grocery and restaurant chains are hiring a larger percentage of job applicants than seven months ago, signaling confidence the economy may be improving, software maker Kronos Inc. said.

Kronos analyzed the 8.9 million job applications received by 68 retailers in the first seven months of the year. In July, 2.99 of every 100 applications resulted in a hire, compared with 2.75 in January, a three-year low, the Chelmsford, Massachusetts-based company said today in a statement.

“We are seeing a turnaround that reflects an increase in confidence by individual managers,” Robert Yerex, Kronos’s chief economist ... “It may take quite a bit longer to come back than it did to drop off.” This is the first time Kronos has publicly issued a monthly retail labor index.

Unfortunately this data is new and the season hasn't started yet. This hiring will be watched closely, and I suspect seasonal hiring will be stronger than in 2008, but not as strong as the 700+ thousand jobs in 2004 through 2007.

by Calculated Risk on 9/08/2009 12:46:00 PM

Here is an interesting resource from Google: Domestic Trends. (ht Brian) Google is tracking search trends for several specific sectors of the economy.

As an example, below is a screen capture of the Auto Buyers Index.

Click on graph for larger image in new window.

This shows the seasonality of car buying, plus the Cash-for-clunkers surge in searches. Click on link for interactive graph - you can also plot the data YoY.

I also recommend real estate, rental (still weak) and unemployment.

by Calculated Risk on 9/08/2009 11:09:00 AM

From The Times: Recession is over but stagnation may follow

Britain’s economy grew for the first time over a three-month period since May last year, the National Institute of Economic and Social Research (NIESR) said today but warned that the end of recession could turn to a period of stagnation. ...

"This is the first time our GDP indicator has been higher over a three-month average since May of 2008 and reinforces our view that the recession ended in May of this year." ... However, NIESR added: "There may well be a period of stagnation now, with output rising in some months and falling in others; the end of the recession should not be confused with a return to normal economic conditions."
emphasis added

And from Bloomberg: German Industrial Output Fell in July After June Gain

German industrial output fell in July after rising in June, suggesting the recovery from recession may be gradual.

Production declined 0.9 percent from June, when it rose a revised 0.8 percent, the Economy Ministry in Berlin said today.

by Calculated Risk on 9/08/2009 08:53:00 AM

From Manpower: Manpower Employment Outlook Survey Projects a Weak Hiring Pace for Q4 2009

"The hiring intentions of U.S. companies continue to be sluggish," said Manpower Inc. Chairman and CEO Jeff Joerres. "While there are areas within the U.S. which are showing an uptick, we have yet to see the robust hiring intentions that would indicate a full labor market recovery."

Of the more than 28,000 employers surveyed, a significant 69% expect no change in their October – December hiring plans. Twelve percent anticipate an increase in staff levels, while 14% expect a decrease in payrolls, resulting in a Net Employment Outlook of -2%. After seasonal adjustment, the Net Employment Outlook becomes -3%, the weakest in the history of the survey, which began in 1962. The final 5% of employers indicated they were undecided about their hiring intentions.

“Despite some moderating signs, such as the considerable number of employers that plan to maintain or increase staff levels, there will continue to be challenges for both job seekers and employers in the coming months,” said Jonas Prising, Manpower president of the Americas. “Hiring in the Wholesale & Retail Trade sector, for instance, is expected to be down in the fourth quarter, suggesting that employers will not be adding the quantity of holiday hires they have in the past.”
emphasis added

by Calculated Risk on 9/08/2009 12:19:00 AM

Reuters is reporting comments by State Councillor Ma Kai indicating China will continue with their stimulative policies.

"The trend of economic stabilisation is still not firm, not solidified, not balanced, and we still face many difficulties and problems," Ma [said] ... "We will maintain the consistency and stability of macroeconomic policies and fully implement and constantly improve a package of plans."

Futures are up ...

Futures from barchart.com

Bloomberg Futures.

CBOT mini-sized Dow

And the Asian markets are mostly up.

Best to all.

by Calculated Risk on 9/07/2009 09:31:00 PM

Another laugh from Jim ... "and if you get busted, you can always say you lost your mind because ..."

by Calculated Risk on 9/07/2009 05:50:00 PM

This story has it all: negative equity, Option ARM, health problems, a modification horror story and more - all with one family in Orange County.

From the O.C. Register: Family faces loss of home amid health crisis

... the Kempffs' option adjustable-rate mortgage payment skyrocketed to $4,300 a month from $2,500 last December. Seeing no way to afford the new payments, the Kempffs opted for a loan modification from their bank, IndyMac which was later purchased by OneWest from the FDIC in March.
...
The Kempffs said they were told by an IndyMac representative on the phone that they had to miss three payments before a deal could be worked out. ... For a family that had never missed payments in 14 years of being homeowners, purposely skipping payments was hard for the Kempffs, but they consented.

I'm curious about the timing in the article. IndyMac was seized by the FDIC on July 11, 2008, and was then run by the FDIC until March of 2009. Did this happen when IndyMac was being used by the FDIC to demonstrate how to modify loans? Tanta correctly predicted that the FDIC would discover that modifying loans was not easy, see: IndyMac-FDIC Mortgage Modification Plan: Still in the Real World

I wrote a snotty post at the end of August after Sheila Bair's plan for "affordability modifications" of the former IndyMac loans was announced, the burden of snot wisdom of which was my prediction that Bair was going to discover that it's a lot harder than she thinks to get successful mortgage modifications done on a wide scale in a very short period of time. However, I did express the hope that the Bair plan would prove remarkably successful and indicated my willingness to eat my words should it prove necessary.

Looks like I'll have to stick to my usual dry toast and bananas after all.

Back to the article:

A OneWest Bank spokesperson said the Kempffs didn't qualify for a loan modification because the amount they owed on their first mortgage was more than $729,750.

The unpaid amount on the Kempffs' loan is $786,802.59, short of qualifying for a modification by about $60,000.

Since the Kempffs purchased their home in 2002, they took out loans and refinanced their mortgage. The equity from those transactions enabled the Kempff family to fix their cracked pool, remedy a slipping backyard slope by putting in three retaining walls, help three children pay for college and pay for the medical bills of their youngest son who had malignant melanoma.
...
Juergen Kempff, 65, has battled leukemia and lymphoma for a decade, on and off. His bone marrow has been debilitated from his treatments, and his oncologist has given him about six months to live.
...
Desperate to stall the foreclosure process, the Kempffs declared bankruptcy.

A sympathetic borrower - a professor at the University of California, Irvine with a serious health issue - negative equity, using the home as an ATM, an Option ARM, a personal bankruptcy, miscommunication with the lender on a modification (apparently while the FDIC was running IndyMac) - and a home in the upper middle price range. This story has it all.

by Calculated Risk on 9/07/2009 01:05:00 PM

A frequent question is how do the 570,000 initial weekly unemployment claims, as reported by the Dept of Labor (DOL), correspond to the 216,000 in monthly job losses as reported by the Bureau of Labor Statistics (BLS).

If about 2.4 million people filed initial weekly claims in a month (570,000 X 4 weeks), how come the economy only lost 216 thousand net jobs in August?

First, I think it is helpful to look at total hires and separations each month. The BLS has a survey called "Job Openings and Labor Turnover Survey" (JOLTS) that provides this information. The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers.

Note: Remember the CES (Current Employment Statistics, payroll survey) is for positions, the CPS (Current Population Survey, commonly called the household survey) is for people. See Jobs and the Unemployment Rate for a comparison of the two surveys.

The following graph shows hires (Green Line), Quits (blue bars) and Layoff, Discharges and other (red bars) from the JOLTS. Red and blue added together equals total separations.

Unfortunately this is a new series and only started in December 2000.

Click on graph for larger image in new window.

Notice that hires (green line) and separations (red and blue together) are pretty close each month. When the green line is above total separations, the economy is adding net jobs, when the green line is below total separations, the economy is losing net jobs.

Although initial claims are for people and JOLTS is for positions, this does show why initial claims are so high. In the first six months of 2009, an average of about 2.8 million jobs were lost involuntarily each month. If all of these people applied for unemployment claims, the average initial weekly unemployment claims would have been about 650,000 per week (2.8 million divided by 4.3 weeks per month). In fact weekly claims averaged just over 600,000 per week for the first six months of 2009. Note: "quits" don't receive unemployment insurance.

So even though there were about 4.2 million new hires each month during the first six months of 2009, people who lose their jobs involuntarily during a recession have a difficult time finding a new job right away, and most apply for unemployment benefits.

In better times, like 2005, about 2.26 million jobs were lost involuntarily each month, but weekly claims only averaged 330,000 per week (2.26 million divided by 4.3 week is 525,000). This shows when the economy is adding net jobs, a larger percentage of people can find new jobs right away and don't apply for unemployment insurance. But many people still do file for benefits.

Although we don't have JOLTS data for the '90s, even in the best of times for employment (like 1997), the U.S. averaged about 230 thousand initial unemployment claims per week - even though the economy added almost 3.4 million net jobs for the year. This just points out there is significant employment turnover in the U.S. economy, and many people lose their jobs involuntarily even in good times.

Final Note: Since weekly initial unemployment claims are related to involuntary separations - and the overall strength of the job market (Can people find a job right away?), there is no magic formula between initial claims and net jobs. It does appear that initial weekly claims will have to fall to about 400,000 per week before the economy starts adding jobs, see from Brad DeLong: Payroll Employment Starts Growing When Seasonally-Adjusted Unemployment Claims Fall Below 400K per Week or so...

This is the graph from DeLong's post (click on graph for larger image.)

by Calculated Risk on 9/07/2009 09:50:00 AM

From Michael Luo at the NY Times: Out of Work, Too Down to Search On, and Uncounted (ht Kai, Ann)

They were left out of the latest unemployment rate, as they are every month: millions of hidden casualties of the Great Recession who are not counted in the rate because they have stopped looking for work.

But that does not mean these discouraged Americans do not want to be employed. As interviews with several of them demonstrate, many desperately long for a job, but their inability to find one has made them perhaps the ultimate embodiment of pessimism as this recession wears on.
...
The official jobless rate, which garners the bulk of attention from politicians and the public, was reported on Friday to have risen to 9.7 percent in August. But to be included in that measure, which is calculated by the Bureau of Labor Statistics from a monthly nationwide survey, a worker must have actively looked for a job at some point in the preceding four weeks.

For an increasing number of people in this country who would prefer to be working, that is not the case.

Luo provides short stories about four people who have given up looking.

by Calculated Risk on 9/06/2009 08:34:00 PM

Laura Conaway at NPR Money highlights a new survey by the Rutgers University John J. Heldrich Center for Workforce Development.

From the Press Release:

A comprehensive national survey conducted among 1,200 Americans nationwide who have been unemployed and looking for a job in the past 12 months, including 894 who are still jobless, portrays a shaken, traumatized people coping with serious financial and psychological effects from an economic downturn of epic proportion.
...
The survey shows that the great recession of 2007-2009 may have long-lasting financial and psychological effects on millions of people, and therefore on the nation’s social fabric. Two thirds of respondents say they are depressed, over half have borrowed money from friends or relatives, and a quarter have skipped mortgage or rent payments. ...

More than half of the jobless think the changes in the economy will be fundamental and lasting, and when the unemployed are asked when the economy will recover, only 20% believe it will do so in the next year.

Here are the raw comments and stats from the survey.

Click on graph for larger image in new window.

From the report:

Over half of the unemployed have lost their jobs for the first time ... Job loss is hitting more affluent workers and educated professionals hard — a metric of the recession’s seismic impact. More than one in four of those who were unemployed for the first time earned $75,000 or more in their previous job; one in four first-time unemployed workers have at least a four-year college degree.

by Calculated Risk on 9/06/2009 02:00:00 PM

A few posts of interest this last week:

Restaurants in July: 23rd Consecutive Month of Declining Traffic

Construction Spending in July

Light Vehicle Sales 14.1 Million (SAAR) in August

ISM Non-Manufacturing Index Shows Contraction in August

Problem Bank List (Unofficial) Sep 4, 2009 (5 more banks failed this week)

Employment Report: 216K Jobs Lost, 9.7% Unemployment Rate

Unemployment: Stress Tests, Unemployed over 26 Weeks, Diffusion Index

Employment-Population Ratio, Part Time Workers, Average Workweek

Enjoy the weekend!!! Best to all.

by Calculated Risk on 9/06/2009 11:00:00 AM

In the comments yesterday we were comparing the "feel" of the current recession compared to the early '80s. Back then it seemed there were many more homeless people, and camps of "Reaganvilles" (an echo of the Hoovervilles during Depression) were sprouting up around the country. I commented that it seems there are far fewer homeless people now, so this story caught my eye ...

From the NY Times: Surge in Homeless Children Strains School Districts

While current national data are not available, the number of schoolchildren in homeless families appears to have risen by 75 percent to 100 percent in many districts over the last two years, according to Barbara Duffield, policy director of the National Association for the Education of Homeless Children and Youth, an advocacy group.

There were 679,000 homeless students reported in 2006-7, a total that surpassed one million by last spring, Ms. Duffield said.

With schools just returning to session, initial reports point to further rises. In San Antonio, for example, the district has enrolled 1,000 homeless students in the first two weeks of school, twice as many as at the same point last year.