by Calculated Risk on 11/02/2011 10:31:00 AM

The Census Bureau released the Housing Vacancies and Homeownership report for Q3 this morning.

As Tom Lawler has been discussing (see posts at bottom), this is from a fairly small sample, and the homeownership and vacancy rates are higher than estimated in other reports (like Census 2010). This report is commonly used by analysts to estimate the excess vacant supply for housing, but it doesn't appear to be useful for that purpose.

It might show the trend, but I wouldn't rely on the absolute numbers.

Click on graph for larger image.

The Red dots are the decennial Census homeownership rates for April 1st 1990, 2000 and 2010. The HVS homeownership rate increased to 66.3%, up from to 65.9% in Q2 2011.

I'd put more weight on the decennial Census numbers and that suggests the actual homeownership rate is probably in the 64% to 65% range.

The Census researchers are investigating differences in Census 2010, ACS 2010, and HVS 2010 vacant housing unit estimates, and plan to report the results of this research at the 2012 Federal Committee on Statistical Methodological Research Conference this coming January: “Evaluation of Gross Vacancy Rates from the Decennial Census Versus Current Surveys.”

The HVS homeowner vacancy rate declined to 2.4% from 2.5% in Q2.

The homeowner vacancy rate has probably peaked and is slowly declining. However - once again - this probably shows that the trend is down, but I wouldn't rely on the absolute numbers.

The rental vacancy rate increased to 9.8% from 9.2% in Q2.

I think the Reis quarterly survey (large apartment owners only in selected cities) is a much better measure of the overall trend in the rental vacancy rate - and that survey has been showing the trend is down.

Here are some previous posts about some of the HVS issues by economist Tom Lawler:
• Lawler to Census on Housing Data: "Splainin" Needed Not Just on Vacancy Rate
• Census Bureau on Homeownership Rate: We've got “Some 'Splainin' to Do”
• Be careful with the Housing Vacancies and Homeownership report
• Lawler: Census 2010 and the US Homeownership Rate
• Lawler: Census 2010 Demographic Profile: Highlights, Excess Housing Supply Estimate, and Comparison to HVS
• Lawler: The “Excess Supply of Housing” War
• Lawler: Census Releases Demographic Profile of 12 States and DC: Confirms Bias of HVS
• Lawler: Census 2010 and Excess Vacant Housing Units
• Lawler: On Census Housing Stock/Household Data
• Lawler: Housing Vacancy Survey appears to massively overstate number of vacant housing units
• Lawler: US Households: Why Researchers / Analysts are “Confused”

by Calculated Risk on 11/02/2011 08:15:00 AM

ADP reports:

Employment in the U.S. nonfarm private business sector increased by 110,000 from September to October on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated advance in employment from August to September was revised up to 116,000 from the initially reported 91,000.

Employment in the private, service-providing sector rose 114,000 in October. Although down a bit from an increase of 122,000 in September, this increase marks more than 20 consecutive months of employment gains. Employment in the private, goods-producing sector declined 4,000 in October, while manufacturing employment declined by 8,000.

This was slightly above the consensus forecast of an increase of 100,000 private sector jobs in October. The BLS reports on Friday, and the consensus is for an increase of 90,000 payroll jobs in September, on a seasonally adjusted (SA) basis.

Government payrolls have been shrinking by about 35,000 on average per month this year. So this suggests around 110,000 private nonfarm payroll jobs added, minus 35,000 government workers - or around 75,000 total jobs added in October. Of course ADP hasn't been very useful in predicting the BLS report.

by Calculated Risk on 11/02/2011 07:24:00 AM

From Reuters: Mortgage applications barely up last week: MBA

The MBA's seasonally adjusted gauge of loan requests for home purchases rose 1.8 percent, while the index of refinancing applications was off 0.2 percent.
...
Fixed 30-year mortgage rates averaged 4.31 percent, down 2 basis points from 4.33 percent.

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

Click on graph for larger image.

The purchase index is at about the same level as in 1996, and the 4-week average is at the lowest level this year. This does not include cash buyers, but this suggests weaker home sales in November and December.

by Calculated Risk on 11/01/2011 10:32:00 PM

Looks the referendum is back on ... but who knows?

From Reuters: Greece Says Vote on Bailout Is Still On

"The referendum will be a clear mandate and a clear message in and outside Greece on our European course and participation in the euro," [Prime Minister George Papandreou] said, according to a statement released by his office. "No one will be able to doubt Greece's course within the euro."

Papandreou said Greece's partners will support its policies and urged a meeting of G20 leaders this week in Cannes to agree policies that "make sure democracy is above market appetites."

And from the WSJ: Greek Premier Faces Revolt

By Tuesday evening, Mr. Papandreou appeared to lack enough support in Parliament to hold a referendum on the rescue package for Greece that European leaders agreed on last week. But while prospects for his high-risk referendum receded, he was also fighting to hold on to power, leaving Europe fretting about the political instability in the country at the heart of the euro-zone crisis.

Indeed, Mr. Papandreou in a statement issued around 1 a.m. Wednesday in Athens insisted that the referendum would go ahead and would give his economic overhauls a strong mandate.

And from the Financial Times: Leaders race to save eurozone deal

... Angela Merkel, Germany’s chancellor, and Nicolas Sarkozy, France’s president, summoned George Papandreou, Greek prime minister, to emergency talks in Cannes on Wednesday ... In a joint communiqué, the French and German leaders said they were “determined to ensure the implementation without delay of the decisions adopted at the eurozone summit”, saying they were “more necessary than ever today”.
excerpt with permission

Earlier:
• ISM Manufacturing index indicates slower expansion in October
• Construction Spending increased slightly in September
• U.S. Light Vehicle Sales at 13.26 million SAAR in October, Highest since Aug 2009

by Calculated Risk on 11/01/2011 05:57:00 PM

From LPS Applied Analytics: LPS' Mortgage Monitor Report Shows Significant Difference in Inventories, Timelines Between Judicial and Non-Judicial States

The September Mortgage Monitor report released by Lender Processing Services, Inc. continues to show significant differences between states that process foreclosures following a judicial vs. non-judicial foreclosure process. ... The time from last payment to foreclosure sale in judicial states is 761 days, which is six months longer than in non-judicial states.
...
Overall, foreclosure starts in September were slightly below the three-year average. Foreclosure timelines continue to increase across the board – almost 40 percent of loans in foreclosure have not made a payment in two years, and 72 percent have not made a payment in a year or more. New problem loan rates increased sharply over the last two months, with 1.6 percent of loans that were current six months ago now 60 or more days delinquent or in foreclosure.

According to LPS, 8.09% of mortgages were delinquent in September, down from 8.13% in August, and down from 9.27% in September 2010.

LPS reports that 4.18% of mortgages were in the foreclosure process, up from 4.11% in August, and up from 3.84% in September 2010. This gives a total of 12.27% delinquent or in foreclosure. It breaks down as:

• 2.36 million loans less than 90 days delinquent.
• 1.84 million loans 90+ days delinquent.
• 2.17 million loans in foreclosure process.

For a total of 6.37 million loans delinquent or in foreclosure in September.

Click on graph for larger image.

This graph shows the total delinquent and in-foreclosure rates since 1995.

The total delinquent rate has fallen to 8.09% from the peak in January 2010 of 10.97%. A normal rate is probably in the 4% to 5% range, so there is a long long ways to go.

However the in-foreclosure rate at 4.18% is barely below the peak rate of 4.21% in March 2011. There are still a large number of loans in this category (about 2.17 million) - and, for judicial states, the average loan in foreclosure has been delinquent for 761 days (six months less for non-judicial states).

This graph provided by LPS Applied Analytics shows the number of loans 90 days delinquent by origination channel.

The total number of loans 90+ delinquent is back to 2008 levels. Most people focus on the GSE seriously delinquent loans, but the private and portfolio loans have much high delinquency rates.

The third graph shows the number of loans in foreclosure by duration of delinquency.

There are 2.17 million loans in the foreclosure process and about 39% have been delinquent for more than 2 years, and another 33% have been delinquent for 1 to 2 years. Many of these loans are still in process review.

Although the delinquency rate is trending down slowly, the percent of loans in the foreclosure process seems stuck at a very high level.

Earlier:
• ISM Manufacturing index indicates slower expansion in October
• Construction Spending increased slightly in September
• U.S. Light Vehicle Sales at 13.26 million SAAR in October, Highest since Aug 2009