by Calculated Risk on 7/28/2011 08:42:00 AM

The DOL reports:

In the week ending July 23, the advance figure for seasonally adjusted initial claims was 398,000, a decrease of 24,000 from the previous week's revised figure of 422,000. The 4-week moving average was 413,750, a decrease of 8,500 from the previous week's revised average of 422,250.

This is the first week with initial claims below 400,000 since early April.

The following graph shows the 4-week moving average of weekly claims since January 2000 (longer term graph in graph gallery).

Click on graph for larger image in graph gallery.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased this week to 413,750.

by Calculated Risk on 7/27/2011 08:29:00 PM

Last month, Tom Lawler posted on how the NAR estimates existing home inventory. The NAR does NOT aggregate data from the local boards (see Tom's post for how the NAR estimates inventory). Sometime this fall, the NAR will revise down their estimates of inventory and sales for the last few years. Also the NAR methodology for estimating sales and inventory will likely (hopefully) be changed.

While we wait for the NAR revisions, I think the HousingTracker / DeptofNumbers data that Tom mentioned might be a better estimate of changes in inventory (and always more timely). Ben at deptofnumbers.com is tracking the aggregate monthly inventory for 54 metro areas.

Click on graph for larger image in graph gallery.

This graph shows the NAR estimate of existing home inventory through June (left axis) and the HousingTracker data for the 54 metro areas through July. The HousingTracker data shows a steeper decline in inventory over the last few years (as mentioned above, the NAR will probably revise down their inventory estimates this fall).

Lawler wrote today:

The area covered by DON/HT does not necessarily track the nation as a whole. However, it’s listings have shown significantly larger YOY declines than has the NAR in its estimate of US existing homes for sale. Moreover, when I include areas I track that are not covered by DON/HT, I find that listings in June were down significantly more than the NAR shows. This may indicate that home sales this June were down more from a year ago than the NAR estimates suggest.

The second graph shows the year-over-year change in inventory for both the NAR and HousingTracker.

HousingTracker reported that the July listings - for the 54 metro areas - declined 11.1% from last year.

Of course there is a large percentage of distressed inventory, and various categories of "shadow inventory" too. But the decline in listed inventory will put less downward pressure on house prices and is something to watch carefully all year.

Here are the posts this month on June Home Sales and Prices:
• New Home Sales in June at 312,000 Annual Rate
• Existing Home Sales in June: 4.77 million SAAR, 9.5 months of supply
• Home Sales: Distressing Gap
• Graph Galleries: New Home Sales and Existing Home Sales

On House Prices:
• Case Shiller: Home Prices increase in May
• Real House Prices and Price-to-Rent
• Graph Galleries: Home Prices

by Calculated Risk on 7/27/2011 04:51:00 PM

From economist Tom Lawler:

[T]he rumor mill has it that the NAR is considering developing a “repeat transactions” price index, presumably based on property level data from various MLS across the country. NAR analysts have noted that the impact of the “mix of homes” on its median sales price had become even more dramatic over the past few years than was the case in the past, and some apparently have become resigned to the fact that the median is “no longer the message” when in comes to tracking home price trends.

The median price is useful for tracking prices when the mix of homes sold is stable. But the mix hasn't been stable for some time, and now most people follow Case-Shiller, CoreLogic and a few other price indexes.

by Calculated Risk on 7/27/2011 02:00:00 PM

Fed's Beige Book:

Reports from the twelve Federal Reserve Districts indicated that economic activity continued to grow; however, the pace has moderated in many Districts. The six Districts nearest the Atlantic seaboard reported a slowdown in activity since the previous Beige Book report; activity was little changed in the Atlanta District and unchanged or slightly improved in the Richmond District. Of the other six Districts, the Minneapolis District reported political and weather-related disruptions that temporarily slowed growth, and the Dallas District slowed to a moderate pace of growth. The remaining four Districts continued to grow modestly.
...
Consumer spending increased overall, with modest growth of nonauto retail sales in a majority of Districts. Falling gasoline prices throughout most of this reporting period may have encouraged a pickup in shopping trips and some additional spending since the previous Beige Book.
...
Manufacturing activity was reported as continuing to increase since the last report in all but two districts, although many noted that the pace of growth had slowed.
...
Labor market conditions remained soft in most Federal Reserve Districts. Employment, especially among temporary hiring agencies, improved in the Richmond District in recent weeks. Modest hiring increases, often within specific sectors such as advertising in the Boston District and manufacturing in the Cleveland District, contributed to modest overall employment gains.

And on real estate:

Residential real estate sales in almost all Districts were little changed from the last Beige Book. Activity edged up in the Richmond, Atlanta, and Minneapolis Districts. ... Increasing inventories of unsold homes in the Boston, New York, and Kansas City Districts have restrained building in the single-family housing sector. ... Since the previous Beige Book, construction and activity in the residential rental market have continued to improve in the New York, Chicago, Dallas, and San Francisco Districts.
...
Nonresidential real estate activity improved somewhat in the Boston, Philadelphia, Cleveland, Chicago, St. Louis, and Dallas Districts. The Chicago District reported strong demand for industrial facilities, particularly from the automotive sector. The Philadelphia District reported improvements in terms of lower vacancy rates for office space, industrial space, and apartments; the Chicago District reported generally lower vacancy rates. The New York, Richmond, Atlanta, Minneapolis, Kansas City, and San Francisco Districts all reported generally weak activity in nonresidential real estate.

This was based on data gathered before July 15th, and I've heard reports of further slowing since the middle of the month.

by Calculated Risk on 7/27/2011 11:06:00 AM

It looks like they're going to need a bigger bailout ...

From Reuters: Italian banks fall as Italy/Bund spread widens

The Italian BTP spread over German Bunds expanded by 15 basis points to 305 basis points early on Wednesday. The BTP/Bund yield gap was at around 290 basis points late on Tuesday

Here is a graph of the 10 year spread (Italy to Germany) from Bloomberg. This is probably the key graph to watch right now.

And from CNBC: S&P Expects Second Greek Haircut, New Downgrade

A new and bigger restructuring of Greek debt is likely within the next two years, an official from credit ratings agency Standard & Poor's said on Tuesday, adding a further downgrade of Greece's sovereign debt rating was "pretty certain."

Here are the links for bond yields for several countries (source: Bloomberg):

Greece	2 Year	5 Year	10 Year
Portugal	2 Year	5 Year	10 Year
Ireland	2 Year	5 Year	10 Year
Spain	2 Year	5 Year	10 Year
Italy	2 Year	5 Year	10 Year
Belgium	2 Year	5 Year	10 Year
France	2 Year	5 Year	10 Year
Germany	2 Year	5 Year	10 Year