by Calculated Risk on 10/24/2011 02:22:00 PM

The Department of Transportation (DOT) reported today:

•Travel on all roads and streets changed by -1.7% (-4.6 billion vehicle miles) for August 2011 as compared with August 2010.

•Travel for the month is estimated to be 263.0 billion vehicle miles.

•Cumulative Travel for 2011 changed by -1.3% (-26.0 billion vehicle miles).

The following graph shows the rolling 12 month total vehicle miles driven.

Click on graph for larger image.

In the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Currently miles driven has been below the previous peak for 45 months - so this is a new record for longest period below the previous peak - and still counting! Talk about moving sideways ...

The second graph shows the year-over-year change from the same month in the previous year. The current decline is not as a severe as in 2008, but this is significant.

It appears the slowdown at the end of July and in August impacted miles driven, and perhaps miles driven will increase in September.

by Calculated Risk on 10/24/2011 11:22:00 AM

From Bloomberg: Moody’s U.S. Commercial Property Index Rose 2.4% in August

The Moody’s/REAL Commercial Property Price Index advanced 2.4 percent from July. It’s up 7.2 percent from a year earlier ... Moody’s doesn’t see “significant” price gains in the near term as loan originations based on commercial-mortgage backed securities slow and demand for vacant space continues to “languish,” the company said. ... The share of distressed deals was 21.7 percent, the lowest since January 2010.

Below is a comparison of the Moodys/REAL Commercial Property Price Index (CPPI) and the Case-Shiller composite 20 index. Beware of the "Real" in the title - this index is not inflation adjusted.

Click on graph for larger image in graph gallery.

CRE prices only go back to December 2000. The Case-Shiller Composite 20 residential index is in blue (with Dec 2000 set to 1.0 to line up the indexes).

According to Moody's, CRE prices are up 7.2% from a year ago, and down about 41% from the peak in 2007. This index is very volatile because there are relatively few transactions - and some of the recent increase was due to fewer distressed sales - and some of the increase was probably seasonal.

by Calculated Risk on 10/24/2011 09:07:00 AM

From NY Fed President William Dudley: The National and Regional Economic Outlook

Stabilizing the housing sector is particularly important because housing equity is an important part of household wealth. This calls for a comprehensive approach to housing policy, starting with an urgent effort to remove the obstacles that make it difficult for all borrowers to refinance at today's low mortgage rates, but extending beyond this to tackle other problems weighing on housing. Taken together, such efforts could help shift people's expectations about future house prices. If prospective homeowners no longer fear that prices could decline further, they will be more willing to enter the market to take advantage of reduced prices and low financing costs, and existing homeowners will feel more confident about spending. A vicious cycle could be replaced by a virtuous circle, in which stabilization in house prices supports spending, growth and jobs.

This suggests a "comprehensive" plan is in the works.

The new refinance plan will be announced today, see from Nick Timiraos at the WSJ: Home Lending Revamp Planned

The plan will streamline the refinance process by eliminating appraisals and extensive underwriting requirements for most borrowers, as long as homeowners are current on their mortgage payments ... Fannie and Freddie have also agreed to waive some fees that made refinancing less attractive for some.

And two more possibilities ...

1) Last week Fed Vice Chairman Janet Yellen, and Fed Governor Daniel Tarullo discussed a possible new MBS buying program at the Fed. See Fed Is Poised for More Easing and Fed Official Hints at Possible Effort to Boost Economy.

2) As I noted yesterday, I'm hearing rumors that a new REO disposition program for the FHA, Fannie and Freddie might be announced soon (probably selling REO to investors in bulk with a rental program for current occupants).

Weekend:
• Schedule for Week of Oct 23rd
• Summary for Week ending Oct 21st

by Calculated Risk on 10/24/2011 08:30:00 AM

This is a composite index from the Chicago Fed: Index shows economic activity improved in September

Led by improvements in employment-related indicators, the Chicago Fed National Activity Index increased to –0.22 in September from –0.59 in August.
...
The index’s three-month moving average, CFNAI-MA3, edged up to –0.21 in September from –0.28 in August, but remained negative for the sixth consecutive month. September’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. Likewise, the economic slack reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.

This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967.

Click on graph for larger image.

According to the Chicago Fed:

A zero value for the index indicates that the national economy is expanding at its historical trend rate of growth; negative values indicate below-average growth; and positive values indicate above-average growth.

This index suggests the economy was still growing in September, but below trend.

Weekend:
• Schedule for Week of Oct 23rd
• Summary for Week ending Oct 21st

by Calculated Risk on 10/23/2011 11:51:00 PM

From Nick Timiraos at the WSJ: Home Lending Revamp Planned

Federal regulators on Monday plan to unveil a major overhaul of an under-used mortgage-refinance program ... The overhaul will, among other things, let borrowers refinance regardless of how far their homes have fallen in value ...

The plan will streamline the refinance process by eliminating appraisals and extensive underwriting requirements for most borrowers, as long as homeowners are current on their mortgage payments ... Fannie and Freddie have also agreed to waive some fees that made refinancing less attractive for some.
...
Pricing details won't be published until mid-November, and lenders could begin refinancing loans under the retooled program as soon as Dec. 1 ... Loans that exceed the current limit of 125% of the property's value won't be able to participate until early next year. The program's expiration date ... will be extended through 2013. HARP is only open to loans that Fannie and Freddie guaranteed as of June 2009.

This is more aggressive than I expected and there will probably be a significant pickup in refinancing. This only applies to loans that are current and guaranteed by Fannie and Freddie.

Yesterday:
• Schedule for Week of Oct 23rd
• Summary for Week ending Oct 21st