by Calculated Risk on 6/01/2011 01:55:00 PM

Notes: Case-Shiller is the most followed house price index, but CoreLogic is used by the Federal Reserve and is followed by many analysts. The CoreLogic HPI is a three month weighted average of February, March, and April (April weighted the most) and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic® Home Price Index Shows First Month-over-Month Increase since mid-2010

CoreLogic ... today released its April Home Price Index (HPI) which shows that home prices in the U.S. increased on a month-to-month basis by 0.7 percent between March and April, 2011, the first such increase since the home-buyer tax credit expired in mid-2010. However, national home prices, including distressed sales, declined by 7.5 percent in April 2011 compared to April 2010 after declining by 6.8 per cent in March 2011 compared to March 2010. Excluding distressed sales, year-over-year prices declined by 0.5 percent in April 2011 compared to April 2010.
...
"While the economic recovery is still fragile and one data point is not a trend, the month-over-month increase based on April sales activity is a positive sign. ..." said Mark Fleming, chief economist for CoreLogic.

I was expecting the CoreLogic index to increase over the summer because it is not seasonally adjusted, however the seasonal increases usually start in June (when the Spring home purchases start to closes). This is just one data point, but it is possible this index will have small increases all summer.

I'll have more later (and hopefully a graph).

by Calculated Risk on 6/01/2011 11:07:00 AM

From MarketWatch: General Motors U.S. May sales fall 1.2%

[GM] said Wednesday that May U.S. car sales fell 1.2% to 221,192 vehicles from 223,822 a year ago.

The key number for the economy is the seasonally adjusted annual sales rate (SAAR) compared to the last few months, not the year-over-year comparison provided by the automakers. Once all the reports are released, I'll post a graph of the estimated total May light vehicle sales (SAAR) - usually around 4 PM ET.

The consensus is for a decrease to 12.8 million SAAR in May from 13.2 million SAAR in April, however I think we will see a sharper decline because of supply chain issues. Sales in May 2010 were at a 11.62 million SAAR. I'll add the reports from the other major auto companies as updates to this post.

Update from MarketWatch: Ford U.S. May sales virtually flat

Ford said Wednesday U.S. May sales were virtually flat, declining 0.1% to 192,102 vehicles, compared with 192,253 in the year-ago period.

Yesterday on housing:
• Case Shiller: National Home Prices Hit New Low in 2011 Q1
• Real House Prices and Price-to-Rent: Back to 1999
• The Excess Vacant Housing Supply
• Lawler: Census 2010 and the US Homeownership Rate
• Home Prices Graph Gallery

by Calculated Risk on 6/01/2011 10:00:00 AM

PMI was at 53.5% in May, sharply down from 60.4% in April. The employment index was at 58.2 and new orders at 51.0. All lower than in April.

From the Institute for Supply Management: May 2011 Manufacturing ISM Report On Business®

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The PMI registered 53.5 percent and indicates expansion in the manufacturing sector for the 22nd consecutive month. This month's index, however, registered 6.9 percentage points below the April reading of 60.4 percent, and is the first reading below 60 percent for 2011, as well as the lowest PMI reported for the past 12 months. Slower growth in new orders and production are the primary contributors to this month's lower PMI reading. Manufacturing employment continues to show good momentum for the year, as the Employment Index registered 58.2 percent, which is 4.5 percentage points lower than the 62.7 percent reported in April. Manufacturers continue to experience significant cost pressures from commodities and other inputs."

Click on graph for larger image in new window.

Here is a long term graph of the ISM manufacturing index.

This was well below expectations of 57.5%, but pretty much in line with the regional surveys.

by Calculated Risk on 6/01/2011 08:15:00 AM

ADP reports:

Employment in the nonfarm private business sector rose 38,000 from April to May on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated change of employment from March 2011 to April 2011 was revised down slightly to 177,000 from the previously reported increase of 179,000.
...
May’s ADP Report estimates employment in the service-providing sector rose by 48,000, marking 17 consecutive months of employment gains while employment in the goods-producing sector fell 10,000 following six months of increases. Manufacturing employment fell 9,000 in May following seven consecutive monthly gains.

Note: ADP is private nonfarm employment only (no government jobs).

This was well below the consensus forecast of an increase of 178,000 private sector jobs in May. The BLS reports on Friday, and the consensus is for an increase of 190,000 payroll jobs in May, on a seasonally adjusted (SA) basis. This is a very weak ADP report - and more evidence that the BLS report will be below consensus on Friday.

Yesterday ...
• Case Shiller: National Home Prices Hit New Low in 2011 Q1
• Real House Prices and Price-to-Rent: Back to 1999
• The Excess Vacant Housing Supply
• Home Prices Graph Gallery

by Calculated Risk on 6/01/2011 07:18:00 AM

The MBA reports: Mortgage Applications Decrease in Latest MBA Weekly Survey

Refinance Index decreased 5.7 percent from the previous week. The seasonally adjusted Purchase Index was essentially unchanged from one week earlier.
...
"Interest rates fell last week as incoming economic data was weaker than anticipated. Despite this drop in rates, the number of refinance applications fell. In fact, the last time mortgage rates were this low, refinance volume was more than twenty percent higher. It is likely that many borrowers still cannot qualify to refinance given the lack of equity in their homes," said Mike Fratantoni, MBA's Vice President of Research and Economics.
...
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.58 percent from 4.69 percent, with points increasing to 1.01 from 0.69 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The 30-year rate is the lowest since November 2010.

Click on graph for larger image in graph gallery.

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

Refinance activity decreased even as mortgage rates declined - probably because most people who can refinance did so last year when rates were lower.

The four week average of purchase activity is at about 1997 levels. Of course this doesn't includes cash buyers - and there is a very high percentage of cash buyers right now. This suggests weak existing home sales through mid-year (not counting cash buyers).