by Calculated Risk on 9/19/2011 05:30:00 PM

From economist Tom Lawler:

Based on a fair amount of data from local realtor associations/boards/MLS across the country, I project that existing home sales as estimated by the National Association of Realtors will come in at a seasonally adjusted annual rate of about 4.92 million for August, up 5.4% from July and up 15.8% from last August. Unadjusted sales should show a higher YOY gain – over 18% -- reflecting the higher business day count/seasonal factor this August vs. last August.

This estimate is significantly above the “consensus” forecast of 4.75 million SAAR, but it is what the local data available suggest. A sizable number of markets showed YOY gains of 20% or more (in some cases by a lot), including (but not limited to) a fair number of markets in the middle of the country. Of course, sales in many of those markets were extremely weak last August, which was pretty soon following the expiration of the homebuyer tax credit.

On the inventory side, there is absolutely no doubt that the inventory of homes for sale fell from the end of July to the end of August, and was down significantly from a year ago nationwide. E.g., the “Department of Numbers” website (formerly and more appropriately named “HousingTracker”) shows that active residential listings in the 54 metro markets it covers declined by 2.6% (monthly average of weekly data) from July to August, and were down 14.1% from last August. While these 54 metro areas don’t generally represent the US as a whole, other markets not in this report that I follow on average had similar, though somewhat smaller, declines. NAR inventory figures do not always follow what MLS listing reports might suggest, however. Moreover, NAR inventory numbers this year have not shown the same YOY % declines as various aggregated listings reports.

A “best guess” would be that the NAR’s inventory number for August will be down 2.5% from July, and down 13.5% from last August. If that turns out to be the case, then August’s “months’ supply” number (unadjusted inventory divided by seasonally adjusted monthly sales!) would come in at 8.7 months, down from 9.4 months in July, and 11.7 months last August.

CR Note: The NAR is scheduled to report August existing home sales on Wednesday at 10 AM ET.

by Calculated Risk on 9/19/2011 03:36:00 PM

From Bloomberg: Greece’s Next Aid Payment in the Balance as Review Resumes

European Union and International Monetary Fund inspectors began a teleconference today at 7:22 p.m. Athens time [12:22 PM ET] with Finance Minister Evangelos Venizelos and other officials to judge whether the government is eligible for an aid payment due next month...

No official announcement will be made after the call, which may last until the early morning and could resume tomorrow or at a later time, the Athens-based Finance Ministry said in an e- mailed statement. There is no Greek Cabinet meeting scheduled tomorrow ...

"The only thing that is on the table is full compliance with the agreed targets. No more, no less," [European Commission economics spokesman Amadeu Altafaj] said, adding that only after today's conference call will the commission "be in a position to communicate further on the next steps." ...

Greece is now looking to the next meeting of euro-area finance ministers, on Oct. 3, for a decision on the release of the installment. The loan would be disbursed by mid-October, enabling the government to pay its bills through the end of the year.

We might not hear anything for a few days.

The Greek 2 year yield increased to 61.4%. The Greek 1 year yield increased to 126%.

by Calculated Risk on 9/19/2011 01:10:00 PM

From Eric Wolff at the North County Times: The bigger the loan, the longer to foreclose

When it comes to foreclosing, lenders see some delinquent homeowners as more equal than others.

Mortgage debt of more than a half-million dollars seems to get lenders to look the other way for an extra month compared with those who owe far less, according to a North County Times analysis of foreclosure records.
...
"Just like any other business, when you have larger losses, you're going to be more cautious when you make any decisions than with a smaller loss," said Dustin Hobbs, a spokesman for the California Mortgage Bankers Association, an industry group. "There's no policy in place at any of the servicers I talked to ---- not anything top down."

Eric Wolff discusses several possible reasons including accounting rules, legal issues and lenders being more careful with larger loan amounts.

by Calculated Risk on 9/19/2011 10:00:00 AM

The National Association of Home Builders (NAHB) reports the housing market index (HMI) declined in September to 14 from 15 in August. Any number under 50 indicates that more builders view sales conditions as poor than good.

From the NAHB: Builder Confidence Virtually Unchanged in September

Builder confidence in the market for newly built, single-family homes dipped by a single point to 14 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for September, released today. The index has now held between 13 and 16 for six consecutive months.
...
"The fact that the HMI continues to hover within such a narrow, low range reflects builders' awareness that many consumers are simply unwilling or unable to move forward with a home purchase in today's uncertain economic climate," added NAHB Chief Economist David Crowe. "While some bright spots are beginning to emerge in about a dozen select metro areas, the broader picture remains fairly bleak due to the weak economy and job market."
...
Each of the HMI's three component indexes recorded declines in September. The component gauging current sales conditions slipped one point to 14, while the components gauging sales expectations in the next six months and traffic of prospective buyers each declined two points, to 17 and 11, respectively.

The Midwest was the only region to post a gain in its HMI score for September, edging up one point to 11. Meanwhile, the Northeast and South each posted two-point declines to 15 and the West posted a three-point decline to 12.

Click on graph for larger image in new window.

This graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the September release for the HMI and the July data for starts (August housing starts will be released tomorrow).

Both confidence and housing starts have been moving sideways at a very depressed level for several years.

by Calculated Risk on 9/19/2011 08:31:00 AM

The BuildFax Residential Remodeling Index was at 130.4 in July, up from 129.5 in June. This is based on the number of properties pulling residential construction permits in a given month.

From BuildFax:

The Residential BuildFax Remodeling Index rose 24% year-over-year--and for the twenty-first straight month--in July to 130.4, the highest number in the index to date. Residential remodels in July were up month-over-month almost a single point (.6%) from the June value of 129.5, and up year-over-year 25.6 points (24.5%) from the July 2010 value of 104.7.
...
In July, the West (3.4 points; 3%) and Midwest (4.9 points; 5%) all had month-over-month gains, while the South (3.3 points; 3%) and Northeast (2.7 points; 3.4%) saw a decline.
...
"As millions of Americans believe that they will not be able to secure a new home due to a variety of factors including tight credit, limited buyers and challenging job prospects, they are more and more turning to renovating and remodeling their current properties, sending remodeling activity to record levels," said Joe Emison, Vice President of Research and Development at BuildFax.

Click on graph for larger image in graph gallery.

This is the highest level for the index (started in 2004) - even above the levels from 2004 through 2006 during the home equity ("home ATM") withdrawal boom.

Note: Permits are not adjusted by value, so this doesn't mean there is more money being spent, just more permit activity. Also some smaller remodeling projects are done without permits and the index will miss that activity.

Since there is a strong seasonal pattern for remodeling, the second graph shows the year-over-year change from the same month of the previous year.

The remodeling index is up 24.5% from July 2010.

Even though new home construction is still moving sideways, it appears that two other components of residential investment will increase in 2011: multi-family construction and home improvement.

Data Source: BuildFax, Courtesy of Index.BuildFax.com

Weekend:
• Summary for Week ending September 16th
• Schedule for Week of Sept 18th
• Links for Sovereign Debt Series