by Calculated Risk on 2/25/2011 09:55:00 AM

The final February Reuters / University of Michigan consumer sentiment index increased to 77.5, the highest level in three years.

Click on graph for larger image in graphic gallery.

This was above the consensus forecast of 75.4.

In general consumer sentiment is a coincident indicator. This is still fairly low, but improving.

by Calculated Risk on 2/25/2011 08:30:00 AM

From the BEA: Gross Domestic Product, 4th quarter 2010 (second estimate)

The small downward revision came mostly from PCE, imports, and state and local government expenditures (see table at bottom for changes in contribution to GDP).

Click on graph for larger image in graph gallery.

This graph shows the quarterly GDP growth (at an annual rate) for the last 30 years. The current quarter is in blue.

The dashed line is the median growth rate of 3.05%. The current recovery is still below trend growth.

The following table shows the changes from the advance release (this is the Contributions to Percent Change in Real Gross Domestic Product).

Contributions to Percent Change in Q4 Real Gross Domestic Product
	Advance	2nd Estimate (Revision)	Change
Percent change at annual rate:
Gross domestic product	3.2	2.8	-0.4
Percentage points at annual rates:
Personal consumption expenditures	3.04	2.88	-0.16
Goods	2.26	2.2	-0.06
Durable goods	1.48	1.44	-0.04
Nondurable goods	0.78	0.76	-0.02
Services	0.78	0.68	-0.1
Gross private domestic investment	-3.2	-3.13	0.07
Fixed investment	0.5	0.57	0.07
Nonresidential	0.43	0.51	0.08
Structures	0.02	0.11	0.09
Equipment and software	0.41	0.39	-0.02
Residential	0.08	0.06	-0.02
Change in private inventories	-3.7	-3.7	0
Net exports of goods and services	3.44	3.35	-0.09
Exports	1.04	1.18	0.14
Goods	0.85	0.99	0.14
Services	0.19	0.19	0
Imports	2.4	2.17	-0.23
Goods	2.29	2.07	-0.22
Services	0.11	0.11	0
Government consumption expenditures and gross investment	-0.11	-0.31	-0.2
Federal	-0.01	-0.02	-0.01
National defense	-0.11	-0.12	-0.01
Nondefense	0.1	0.1	0
State and local	-0.1	-0.29	-0.19

by Calculated Risk on 2/24/2011 10:46:00 PM

Here is the weekly update on hotels from HotelNewsNow.com: San Diego tops ADR, RevPAR weekly increases

Overall, the U.S. hotel industry’s occupancy increased 6.7% to 59.1%, ADR was up 3.3% to US$99.32, and RevPAR finished the week up 10.2% to US$58.72.

Note: RevPAR: Revenue per Available Room.
Click on graph for larger image in graph gallery.

This graph shows the seasonal pattern for the hotel occupancy rate.

The occupancy rate really fell off a cliff in the 2nd half of 2008, and then 2009 was the worst year for the occupancy rate since the Great Depression. The occupancy rate started to improve in the Spring of 2010, and was above the 2008 rates later in the year.

However, so far, 2011 is closer to the weak occupancy rates of 2009 and early 2010 than to the median for 2000 through 2007 - although it does appear occupancy improved last week.

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

Earlier today:
• New Home Sales decrease in January
• Home Sales: Distressing Gap
• Fannie, Freddie, FHA combined REO Inventory at Record Level

by Calculated Risk on 2/24/2011 06:37:00 PM

The combined REO (Real Estate Owned) inventory for Fannie, Freddie and the FHA increased to a record 295,307 units at the end of Q4, although REO inventory decreased slightly for both Fannie Mae and Freddie Mac in Q4 (compared to Q3). The REO inventory increased 71% compared to Q4 2009 (year-over-year comparison).

Click on graph for larger image in new window.

This graph shows the REO inventory for Fannie, Freddie and FHA through Q4 2010.

The REO inventory for the "Fs" has increased sharply over the last year, from 172,368 at the end of 2009 to a record 295,307 at the end of 2010.

From Fannie Mae: Fannie Mae Reports Fourth-Quarter and Full-Year 2010 Results

Given the large number of seriously delinquent loans in our single-family guaranty book of business and the large current and anticipated supply of single-family homes in the market, we expect it will take years before our REO inventory approaches pre-2008 levels.

Also, this is just a portion of the total REO inventory. Private label securities and banks and thrifts also hold a substantial number of REOs.

by Calculated Risk on 2/24/2011 04:34:00 PM

From Freddie Mac: Freddie Mac Fourth Quarter 2010 Financial Results

Freddie Mac today reported a net loss of $113 million for the quarter ended December 31, 2010, compared to a net loss of $2.5 billion for the quarter ended September 30, 2010. For the full-year 2010, the company reported a net loss of $14.0 billion, compared to a net loss of $21.6 billion for the full-year 2009.
...
[The FHFA] as Conservator, will submit a $500 million draw request to Treasury ...

“As we begin 2011, the housing recovery remains vulnerable to high levels of unemployment, delinquencies and foreclosures,” [Freddie Mac Chief Executive Officer Charles E. Haldeman, Jr.] said. “Nevertheless, certain economic indicators showed improvement in late 2010. While this trend offers some encouragement, we expect national home prices to decline this year as housing will continue to take some time to recover."

Freddie Mac reported that REO inventory was at 72,079 at the end of Q4, up 60% from Q4 2009 (45,047), but down slightly from Q3 2010.