by Calculated Risk on 5/19/2010 12:31:00 PM

From LoanPerformance: CoreLogic Home Price Index Shows Second Consecutive Annual Increase

National home prices, including distressed sales, increased by 1.7 percent in March 2010 compared to March 2009, according to CoreLogic and its Home Price Index (HPI). This was an improvement over February’s year-over-year price increase of 0.8 percent.* Excluding distressed sales, year-over-year prices increased in March by 1.9 percent; an improvement over the February non-distressed HPI which fell by 0.2 percent year-over-year.

On a month-over-month basis, the national average home price index fell by 0.3 percent in March 2010 compared to February 2010, which was more moderate than the previous one month decline of 1.7 percent from January to February.
...
“March’s year-over-year increase in the HPI shows that the housing market is continuing to exhibit signs of stability,” said Mark Fleming, chief economist for CoreLogic. “The differences between trends, including and excluding distressed sales, indicate the strong influence of distressed activity remains, but the surge in home sales in March is giving the market a boost this spring. As the influence of the tail end of the tax credit and spring buying season fade, price growth will fade with it as we go into summer.”

Click on graph for larger image in new window.

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

The index is up 1.7% over the last year, and off 30.5% from the peak.

House prices are off 4.8% from the recent peak in August 2009 (although some of the decline is seasonal). The index bottomed last March ... so the index is also up 1.7% from the recent low.

With all the distressed sales and government programs, it is hard to separate the seasonal factors from other distortions. However I expect that we will see lower prices on this index later this year.

Note: This is the house price index the Fed now uses for the Flow of Funds report.

by Calculated Risk on 5/19/2010 11:06:00 AM

On the MBA conference call concerning the "Q1 2010 National Delinquency Survey", MBA Chief Economist Jay Brinkmann said this morning:

These are "extraordinary times" and the seasonal adjustment may be incorrect. The 90+ day delinquency bucket is very high and might not be seasonal. If that is backed out, delinquencies are "flat".

FHA foreclosure starts up sharply.

"Shadow inventory" of 4.3 million loans that need to worked through (90 day delinquent or in foreclosure) - or they will become REOs or distressed sales.

Prime fixed rate is now the key problem!

"Sand states" will not be as dominant as the problem moves to prime fixed rate.

Still expect some improvement this year for delinquencies, although a little less optimistic than last quarter.

Click on graph for larger image in new window.

This graph shows the delinquency and foreclosure rates for all prime loans.

This is a new record rate of prime loans in delinquency and foreclosure.

Prime loans account for over 75% of all loans.

"We're all subprime now!"

NOTE: Tanta first wrote this saying in 2007 in response to the 'contained to subprime' statements.

I'll have more later today ...

by Calculated Risk on 5/19/2010 10:00:00 AM

The MBA reports a record 14.69 percent of mortgage loans were either one payment delinquent or in the foreclosure process in Q1 2010 (seasonally adjusted).

From the MBA: Delinquencies, Foreclosure Starts Fall in Latest MBA National Delinquency Survey

The delinquency rate for mortgage loans on one-to-four-unit
residential properties increased to a seasonally adjusted rate of 10.06 percent of all loans outstanding as of the end of the first quarter of 2010, an increase of 59 basis points from the fourth quarter of 2009, and up 94 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate decreased 106 basis points from 10.44 percent in the fourth quarter of 2009 to 9.38 percent this quarter.

The percentage of loans on which foreclosure actions were started during the first quarter was 1.23 percent, up three basis points from last quarter but down 14 basis points from one year ago.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the first quarter was 4.63 percent, an increase of five basis points from the fourth quarter of 2009 and 78 basis points from one year ago. This represents another record high.

The combined percentage of loans in foreclosure or at least one payment past due was 14.01 percent on a non-seasonally adjusted basis, a decline from 15.02 percent last quarter.

The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 9.54 percent, a decrease of 13 basis points from last quarter, but an increase of 230 basis points from the first quarter of last year.

Although this is a new record, Jay Brinkmann, MBA’s chief economist added a caution on the seasonal adjustment (see press release).

I'll have notes from the conference call and graphs soon.

by Calculated Risk on 5/19/2010 08:30:00 AM

From the BLS report on the Consumer Price Index this morning:

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent in April...

The index for all items less food and energy was unchanged in April, as it was in March. The shelter index and its major components of rent and owners' equivalent rent were all unchanged in April.

Owners' equivalent rent (OER) is now down slightly year-over-year.

The disinflationary trend continues - and with all the slack in the system (especially the 9.9% unemployment rate), it is hard to see inflation picking up any time soon. The high unemployment rate and low measured inflation suggest the Fed will hold the Fed funds rate at the current level for some time.

by Calculated Risk on 5/19/2010 07:31:00 AM

The MBA reports: Mortgage Purchase Applications Plummet While Refinance Applications Increase in Latest MBA Weekly Survey

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.5 percent on a seasonally adjusted basis from one week earlier....

The Refinance Index increased 14.5 percent from the previous week and the seasonally adjusted Purchase Index decreased 27.1 percent from one week earlier. This is the lowest Purchase Index observed in the survey since May of 1997. ...

“Purchase applications plummeted 27 percent last week and have declined almost 20 percent over the past month, despite relatively low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall, and at 4.83 percent are at their lowest level since November 2009,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “However, refinance borrowers did react to these lower rates, with refi applications up almost 15 percent, hitting their highest level in nine weeks.”

... The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.83 percent from 4.96 percent, with points increasing to 1.08 from 0.91 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

Click on graph for larger image in new window.

This graph shows the MBA Purchase Index and four week moving average since 1990.

There was a spike in purchase applications in April, followed by a decline to a 13 year low last week. As Fratantoni noted: "The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season."