by Calculated Risk on 1/18/2012 06:15:00 PM

Note: The Case-Shiller House Price index for November will be released Tuesday, Jan 31st. CoreLogic has already reported that prices declined 1.4% in November (NSA, including foreclosures).

• Today from FNC: November Home Prices Decline 0.4%

Based on the latest data on non-distressed home sales (existing and new homes) through November, FNC’s national RPI shows that single-family home prices fell in November to a seasonally unadjusted rate of 0.4%. As a gauge of underlying home value, the RPI excludes sales of foreclosed homes, which are frequently sold with large price discounts reflecting poor property conditions.

All three RPI composites (the National, 30-MSA, and 10-MSA indices) show month-to-month declines in November, ranging from -0.4% at the national level to -0.9% across the nation’s top 10 housing markets. ... The two broader indices indicate a nearly 5.0% decline in the 12-month period between November 2010 and November 2011, or -0.4% per month on an annualized basis. The 10-MSA composite index lost about 4.0% during the period, or -0.3% per month annualized.

The FNC index tables for three composite indexes and 30 cities are here.

• Last week From Zillow: U.S. Home Values Unchanged in November

TThe Zillow Real Estate Market Reports, released today, show home values remained essentially flat from October to November falling only 0.1 percent to $147,800, representing a 4.6 percent decline on a year-over-year basis. ... Home values are back to late 2003 levels and mortgage rates are still below 4 percent for a 30-year fixed rate mortgage.

In nominal terms, Case-Shiller and CoreLogic show prices are back to 2003 levels too. In real terms (and as a price-to-rent ratio), prices are back to 2000 levels.

Even though there are some differences between the indexes, on a year-over-year basis they are fairly close with CoreLogic down 4.3%, FNC down 4.9%, and Zillow down 4.6%.

by Calculated Risk on 1/18/2012 03:21:00 PM

From the WSJ: U.S., Banks Near 'Robo-Signing' Settlement

Administration officials and attorneys general are "very close" to a settlement with major banks of the so-called robo-signing issues after about a year of negotiations, [Housing and Urban Development Secretary Shaun Donovan] said at a conference of U.S. mayors meeting in Washington.

The reductions in borrowers' principal balances contained in the settlement, Mr. Donovan said, will be "far and away the largest principal reduction of the [housing] crisis" ...

For months, officials have said that a settlement is close, only to be frustrated by new hurdles. ... Meanwhile, regional banks are also preparing for an agreement. U.S. Bancorp Inc. said Wednesday that it took a $130 million fourth-quarter charge tied to matters that involve collecting mortgage payments and foreclosing on delinquent home owners.

The settlement was "close" last year, and now it is "very close". The story mentions some regional banks taking charges that appear related to the settlement - and that suggests "very close" is probably means the next month or two.

by Calculated Risk on 1/18/2012 12:11:00 PM

Note: This index is a leading indicator for new Commercial Real Estate (CRE) investment.

From AIA: Architecture Billings Index Positive for Second Straight Month

After showing struggling business conditions for most of 2011, the Architecture Billings Index (ABI) has now reached positive terrain in consecutive months. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the December ABI score was 52.0, following the exact same mark in November. This score reflects an overall increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 64.0, down just a point from a reading of 65.0 the previous month.

“We saw nearly identical conditions in November and December of 2010 only to see momentum sputter and billings fall into negative territory as we moved through 2011, so it’s too early to be sure that we are in a full recovery mode,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Nevertheless, this is very good news for the design and construction industry and it’s entirely possible conditions will slowly continue to improve as the year progresses.”

Click on graph for larger image.

This graph shows the Architecture Billings Index since 1996. The index was unchanged at 52.0 in December. Anything above 50 indicates expansion in demand for architects' services.

Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.

According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. So this suggests further declines in CRE investment in early 2012, but perhaps stabilizing later in 2012.

All current Commercial Real Estate graphs

by Calculated Risk on 1/18/2012 10:00:00 AM

The National Association of Home Builders (NAHB) reports the housing market index (HMI) increased in January to 25 from 21 in December. Any number under 50 indicates that more builders view sales conditions as poor than good.

From the NAHB: Builder Confidence Rises Fourth Consecutive Time in January

Builder confidence in the market for newly built, single-family homes continued to climb for a fourth consecutive month in January, rising four points to 25 on the NAHB/Wells Fargo Housing Market Index (HMI), released today. This is the highest level the index has attained since June of 2007.
...
“Builders are seeing greater interest among potential buyers as employment and consumer confidence slowly improve in a growing number of markets, and this has helped to move the confidence gauge up from near-historic lows in the first half of 2011,” noted NAHB Chief Economist David Crowe. “That said, caution remains the word of the day as many builders continue to voice concerns about potential clients being unable to qualify for an affordable mortgage, appraisals coming through below construction cost, and the continuing flow of foreclosed properties hitting the market.”
...
Each of the HMI’s three component indexes registered a fourth consecutive month of improvement in January. The component gauging current sales conditions rose three points to 25, which was its highest point since June of 2007. The component gauging sales expectations in the next six months also rose three points, to 29 -- its highest point since September 2009. And the component gauging traffic of prospective buyers rose three points to 21, its highest point since June of 2007.

The HMI also posted gains in all four regions in January, including a nine-point gain to 23 in the Northeast, a one-point gain to 24 in the Midwest, a two-point gain to 27 in the South and a five-point gain to 21 in the West.

Click on graph for larger image.

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

Both confidence and housing starts had been moving sideways at a very depressed level for several years - but confidence has been moving up.

This is still very low, but this is the highest level since June 2007.
All Housing Graphs

by Calculated Risk on 1/18/2012 09:15:00 AM

From the Fed: Industrial production and Capacity Utilization

Industrial production increased 0.4 percent in December after having fallen 0.3 percent in November. For the fourth quarter as a whole, industrial production rose at an annual rate of 3.1 percent, its 10th consecutive quarterly gain. In the manufacturing sector, output advanced 0.9 percent in December with similarly sized gains for both durables and nondurables. The output of utilities fell 2.7 percent, as unseasonably warm weather reduced the demand for heating; the output of mines moved up 0.3 percent. At 95.3 percent of its 2007 average, total industrial production in December was 2.9 percent above its level of a year earlier. The capacity utilization rate for total industry rose to 78.1 percent, a rate 2.3 percentage points below its long-run (1972--2010) average.

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up 10.8 percentage points from the record low set in June 2009 (the series starts in 1967).

Capacity utilization at 78.1% is still 2.3 percentage points below its average from 1972 to 2010 and below the pre-recession levels of 81.3% in December 2007.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production increased in December to 95.3, and previous months were revised up slightly.

The consensus was for a 0.5% increase in Industrial Production in December, and for an increase to 78.1% for Capacity Utilization. This was close to consensus.


All current manufacturing graphs