by Calculated Risk on 11/23/2011 08:56:00 AM

The BEA released the Personal Income and Outlays report for October:

Personal income increased $48.1 billion, or 0.4 percent ... in October, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $8.2 billion, or 0.1 percent.
...
Real PCE -- PCE adjusted to remove price changes -- increased 0.1 percent in October, compared with an increase of 0.5 percent in September. ... PCE price index -- The price index for PCE decreased 0.1 percent in October, in contrast to an increase of 0.2 percent in September.

The following graph shows real Personal Consumption Expenditures (PCE) through October (2005 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

PCE increased 0.1% in October, and real PCE increased 0.1%.

Note: The PCE price index, excluding food and energy, increased 0.1 percent.

The personal saving rate was at 3.5% in October.

Personal saving -- DPI less personal outlays -- was $400.2 billion in October, compared with $376.9 billion in September. Personal saving as a percentage of disposable personal income was 3.5 percent in October, compared with 3.3 percent in September.

This graph shows the saving rate starting in 1959 (using a three month trailing average for smoothing) through the October Personal Income report.

In October, income increased faster than spending - reversing a recent trend - and the saving rate increased slightly. However the saving rate has declined sharply over the last few months. Personal income was slightly better than expected, and spending a little lower than expectations.

by Calculated Risk on 11/23/2011 08:30:00 AM

The DOL reports:

In the week ending November 19, the advance figure for seasonally adjusted initial claims was 393,000, an increase of 2,000 from the previous week's revised figure of 391,000. The 4-week moving average was 394,250, a decrease of 3,250 from the previous week's revised average of 397,500.

The following graph shows the 4-week moving average of weekly claims since January 2000.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased this week to 394,250.

This is the lowest level for the 4 week average since early April - although this is still elevated.

And here is a long term graph of weekly claims:




All current Employment Graphs

by Calculated Risk on 11/23/2011 07:26:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

The Refinance Index decreased 4.0 percent from the previous week to its lowest level since July 29, 2011. The seasonally adjusted Purchase Index increased 8.2 percent from last week to its highest level since August 12, 2011.
...
"Purchase applications increased last week, returning to levels from before the Veteran's Day holiday," said Michael Fratantoni, MBA's Vice President of Research and Economics. "However, purchase activity remains almost 5 percent below last year's level."
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) remained unchanged at 4.23 percent, with points decreasing to 0.46 from 0.52 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. ...

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500)increased to 4.59 percent from 4.56 percent, with points decreasing to 0.40 from 0.46 (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.

Although the purchase index increased, the index is still sharply below the levels of June and July - and at about the same level as in 1996. This does not include cash buyers, and, according to the NAR, cash buyers "accounted for 29 percent of purchases in October".
All current Existing Home Graphs

by Calculated Risk on 11/23/2011 12:01:00 AM

Still no hint of timing ...

From Ruth Simon and Nick Timiraos at the WSJ: Foreclosure Talks Push Ahead Absent California

Bank representatives and government officials are working on a broad settlement of most state and federal foreclosure-practices investigations that could move forward without the participation of California ... Negotiators are continuing to make a push to persuade California to join a settlement valued at $25 billion among federal officials, state attorneys general and the nation's five largest mortgage servicers ... The dollar value would include the value of principal write-downs, interest-rate reductions and other benefits to homeowners as well as cash penalties.

There are about 4 million seriously delinquent loans - about 1.8 million 90+ days delinquent, but not in foreclosure, and another 2.2 million in the foreclosure process - and this number has only been declining slowly. If and when this agreement is reached, there will probably be a significant increase in both completed foreclosures and in modifications - both reducing the number of seriously delinquent loans.

by Calculated Risk on 11/22/2011 08:29:00 PM

The FDIC released the Quarterly Banking Profile today for Q3. The report showed that 1-4 family Real Estate Owned (REO) by FDIC insured institutions declined to $11.9 billion in Q3, from $12.1 billion in Q2 - and from a record $14.76 billion in Q3 2010.

As economist Tom Lawler has pointed out before, the FDIC does not collect data on the number of properties held by FDIC-insured institutions, instead they aggregate the carrying value of 1-4 family residential REO on FDIC-insured institutions’ balance sheets.

Using an average of $150,000 per unit would suggest the number of 1-4 family REOs declined from 80,597 in Q2 to 79,335 in Q3.

Here is a graph of the 1-4 family REO carrying value for FDIC insured institutions since Q1 2003.

Click on graph for larger image in new window.

The left scale is the dollars reported in the FDIC Quarterly Banking Profile, and the right scale is an estimate of REOs using an average of $150,000 per unit. Using this estimate for the average per REO gives 79.3 thousand REO at the end of Q3.

Note: FDIC insured institutions have other REO and this is just the 1-4 family residential REO (other REO includes Construction & Development, Multi-family, Commercial, Farm Land).

Of course this is just a small portion of the total 1-4 family REO. Here is a graph showing REO inventory for Fannie, Freddie, FHA¹, Private Label Securities (PLS), and FDIC insured institutions. (economist Tom Lawler has provided some of this data).

The Fannie, Freddie, FHA, PLS, FDIC REO decreased to about 460,000 in Q3 from just under 500,000 in Q2.

¹ Note: FHA inventory is for August.

As Tom Lawler has noted: "This is NOT an estimate of total residential REO, as it excludes non-FHA government REO (VA, USDA, etc.), credit unions, finance companies, non-FDIC-insured banks and thrifts, and a few other lender categories." However this is the bulk of the 1-4 family REO - probably 90% or more. Rounding up the estimate (using 90%) suggests total REO is just around 510,000 in Q3.

Important: REO inventories have declined over the last year. This is a combination of more sales and fewer acquisitions due to the slowdown in the foreclosure process. There are many more foreclosures coming - see my post earlier this month Housing: REO and Mortgage Delinquencies.

All current Mortgage Delinquency and REO graphs.