by Calculated Risk on 8/03/2011 11:43:00 AM

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 April, May and June (June weighted the most) and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic® Home Price Index Shows Third Consecutive Month-Over-Month Increase

CoreLogic ... today released its June Home Price Index (HPI) which shows that home prices in the U.S. increased by 0.7 percent in June 2011 compared to May 2011, the third consecutive month-over-month increase. According to CoreLogic, national home prices, including distressed sales, declined by 6.8 percent in June 2011 compared to June 2010 after declining by 6.7 percent* in May 2011 compared to May 2010. Excluding distressed sales, year-over-year prices declined by 1.1 percent in June 2011 compared to June 2010 and by 2.1* percent in May 2011 compared to May 2010. Distressed sales include short sales and real estate owned (REO) transactions.

“While there is a consistent and sustained seasonal improvement in prices over the last three months, prices are lower than a year ago due to the decline in prices after the expiration of the tax credit last year. The difference between the overall HPI and our index excluding distressed sales indicates that the price declines are more concentrated in the distressed sales market,” said Mark Fleming, chief economist for CoreLogic.

Click on graph for larger image in graph gallery.

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

The index was up 0.7% in June, and is down 6.8% over the last year, and off 31.7% from the peak.

Some of this increase is seasonal (the CoreLogic index is NSA) and the index is still off 6.8% from last June. This is also the eleventh consecutive month showing a year-over-year decline.

by Calculated Risk on 8/03/2011 10:00:00 AM

The July ISM Non-manufacturing index was at 52.7%, down from 53.3% in June. The employment index decreased in July to 52.5%, down from 54.1% in June. Note: Above 50 indicates expansion, below 50 contraction.

From the Institute for Supply Management: July 2011 Non-Manufacturing ISM Report On Business®

Economic activity in the non-manufacturing sector grew in July for the 20th consecutive month, say the nation's purchasing and supply executives in the latest in the latest Non-Manufacturing ISM Report On Business®.

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI registered 52.7 percent in July, 0.6 percentage point lower than the 53.3 percent registered in June, and indicating continued growth at a slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index increased 2.7 percentage points to 56.1 percent, reflecting growth for the 24th consecutive month and at a faster rate than in June. The New Orders Index decreased by 1.9 percentage points to 51.7 percent. The Employment Index decreased 1.6 percentage points to 52.5 percent, indicating growth in employment for the 11th consecutive month, but at a slower rate than in June. The Prices Index decreased 4.3 percentage points to 56.6 percent, indicating that prices increased at a slower rate in July when compared to June. According to the NMI, 13 non-manufacturing industries reported growth in July. Respondents' comments remain mixed; however, for the most part they indicate that business conditions are flattening out."
emphasis added

Click on graph for larger image in graph gallery.

This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

This was below the consensus forecast of 54.0%.

by Calculated Risk on 8/03/2011 08:15:00 AM

ADP reports:

Employment in the U.S. nonfarm private business sector rose 114,000 from June to July on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated advance in employment from May to June was revised down modestly to 145,000, from the initially reported 157,000.
...
Employment in the service-providing sector rose by 121,000 in July, marking 19 consecutive months of employment gains. Employment in the goods-producing sector fell by 7,000 in July, the second decline in three months. Manufacturing employment decreased 1,000 in July, which has seen growth in seven of the past nine months.

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

This was above the consensus forecast of an increase of 100,000 private sector jobs in July. The BLS reports on Friday, and the consensus is for an increase of 75,000 payroll jobs in July, on a seasonally adjusted (SA) basis.

The ADP report has not been very useful in predicting the BLS report.

Yesterday:
• Recession Measures (Graphs showing how little the economy has recovered).
• FHA sells record number of REO in June
• U.S. Light Vehicle Sales 12.23 million Annual Rate in July

by Calculated Risk on 8/03/2011 07:44:00 AM

The MBA reports: Mortgage Applications Increase, But Still Low in Latest MBA Weekly Survey

The Refinance Index increased 7.8 percent from the previous week. The seasonally adjusted Purchase Index increased 5.1 percent from one week earlier
...
"Mortgage rates fell, with the rate on 15-year mortgages reaching a new low in our survey. Refinance application volume increased, but even though 30-year mortgage rates are back below 4.5 percent, the refinance index is still almost 30 percent below last year's level. Factors such as negative equity and a weak job market continue to constrain borrowers. Purchase activity increased off of a low base, returning to levels of one month ago, but remains weak by historical standards." [said Michael Fratantoni, MBA's Vice President of Research and Economics].
...
The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.45 percent from 4.57 percent, with points decreasing to 0.78 from 1.14 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

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

Click on graph for larger image in graph gallery.

The four week average of the purchase index is at best moving sideways at about 1997 levels. Of course this doesn't include the large number of cash buyers ... but this suggests purchase activity remains fairly weak.

Mortgage rates fell last week - and will be even lower this week.

by Calculated Risk on 8/02/2011 07:36:00 PM

• Europe is a mess. Here is a graph of the 10 year spread (Italy to Germany) from Bloomberg. And for Spain to Germany. The Italian spread is at 3.713, and the Spanish spread is at 3.87. Both new highs ...

• As we've been discussing for several months ... from Nick Timiraos at the WSJ: Sliding Sales Listings Lift Housing Outlook

The number of homes listed for sale declined sharply in a number of U.S. cities during the second quarter, offering glimmers of hope that some housing markets are starting to recover.

Earlier:
• Recession Measures (Graphs showing how little the economy has recovered).

• FHA sells record number of REO in June

• U.S. Light Vehicle Sales 12.23 million Annual Rate in July