by Calculated Risk on 6/18/2012 09:53:00 PM

With Spanish 10 year bond yields solidly above 7%, the focus will remain on Europe, especially Greece and Spain. And there will be another meaningless statement from the G20 tomorrow, which reminds me of this great line (and funny commentary) from Matthew O'Brien at the Atlantic: 'Call Me Maybe' Explains the Euro Crisis—Seriously

The only thing more maddening than "Call Me Maybe" is the euro crisis. One is a banal string of saccharine statements, punctuated by swift choruses of action. The other is a pop song. And neither will go away.

• At 8:30 AM ET, Housing Starts for May will be released. The consensus is for total housing starts to increase to 720,000 (SAAR) in May, up from 717,000 in April.

• At 10:00 AM, the BLS will release the Job Openings and Labor Turnover Survey for April. The number of job openings has generally been trending up.


Did I mention Spanish 10 year bond yields are above 7%?

by Calculated Risk on 6/18/2012 06:45:00 PM

From Jon Hilsenrath at the WSJ: Clogged Credit Weighs on Fed Policy Makers

The housing bust left behind millions of people with credit records damaged by plunging home prices, lost jobs, past overspending or bad luck. Many are now walled off from the low interest rates engineered by the Federal Reserve ...
...
Fed officials are weighing new steps at their policy meetings Tuesday and Wednesday, following a period of disappointing jobs growth and financial turbulence in Europe. ... The credit divide factors into their thinking.

Analysts think the policy options under discussion are:

1) extend the extended period to 2015, the current statement reads "the Committee ... currently anticipates that economic conditions ... are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014".

2) Expand and extend the "program to extend the average maturity of its holdings of securities" (Operation Twist).

3) Launch QE3 (probably with more MBS buying).

None of these programs will bridge the credit divide.  And not much of a hint from a usual source ...

by Calculated Risk on 6/18/2012 03:30:00 PM

From economist Tom Lawler:

Last Friday FHFA released its GSE “Foreclosure Prevention Report” for Q1/2012, which has data on Fannie Mae’s and Freddie Mac’s foreclosure prevention activity, foreclosure and other “home forfeiture” activity, delinquencies, and REO. Starting with last quarter’s report, FHFA began showing individual state data, for folks who like to track such things. Here is the report.

Included in the report is the number of delinquent loans by length of delinquency. In some states the percentage of “seriously delinquent (90+) loans that have been delinquent for a year or more is astonishingly high. Below is a chart showing the serious delinquency rate for combined GSE conventional SF mortgages by state broken out by length of delinquency.

Click on graph for larger image.

Florida, of course, is still “off the charts” in terms of its SDQ rate, and 73% of the seriously-delinquent SF loans in Florida have been delinquent for a year or more.

For the combined GSEs, states with the highest “really super-seriously” delinquency rates – i.e., 365+ -- at the end of March were Florida (8.15%), New Jersey (4.27%), Nevada (3.65%), Illinois (2.84%), New York (2.83%), Maine (2.68%), and Maryland (2.54%). For Maryland vs. Virginia “fans,” the “really super-seriously” delinquency rate in Virginia in March was 0.56%.

by Calculated Risk on 6/18/2012 12:47:00 PM

In addition to Case-Shiller, CoreLogic, and LPS, I'm also watching the FNC, Zillow and other house price indexes.

FNC released their April index data today. FNC reported that their Residential Price Index™ (RPI) indicates that U.S. residential property values increased 0.6% in April (Composite 100 index). The other RPIs (10-MSA, 20-MSA, 30-MSA) increased about 1.0% in April. These indices are not seasonally adjusted (NSA), and are for non-distressed home sales (excluding foreclosure auction sales, REO sales, and short sales).

The year-over-year trends continued to show improvement in April, with all four composite indexes down about 2.4% compared to April 2011. For the 10, 20, and 30 city indexes, this is the smallest year-over-year decline in the FNC index since 2007 (five years ago).

Click on graph for larger image.

This graph is based on the FNC index (four composites) through April 2012. The FNC indexes are hedonic price indexes using a blend of sold homes and real-time appraisals.

Some of the month-to-month gain is seasonal since this index is NSA. The key is the indexes are showing less of a year-over-year decline in April. If house prices have bottomed, the year-over-year decline should turn positive later this year or early in 2013.

The April Case-Shiller index will be released next Tuesday, June 26th.

by Calculated Risk on 6/18/2012 10:00:00 AM

The National Association of Home Builders (NAHB) reports the housing market index (HMI) increased 1 point in June to 29 (May was revised down to 28, so this was unchanged). Any number under 50 indicates that more builders view sales conditions as poor than good.

From the NAHB: Builder Confidence Rises One Point in June

Builder confidence in the market for newly built, single-family homes gained one point in June from a slightly revised level in the previous month to rest at 29 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. This is the highest level the index has attained since May of 2007.
“While the June HMI is in keeping with our forecast for gradually improving single-family home sales this year, recent economic reports that have shown some weakening in the pace of recovery likely factored into the marginal gain,” said NAHB Chief Economist David Crowe. “In addition, builders across the country continue to report that overly tight lending conditions and inaccurate appraisals are major obstacles to completing sales at this time.”

...
In June, the HMI component measuring current sales conditions rose two points to 32, which is its highest level since April of 2007. Meanwhile, the components measuring sales expectations in the next six months and traffic of prospective buyers held unchanged at 34 and 23, respectively.

Regionally, the HMI results were mixed in June, with two areas of the country posting gains and two posting declines. The Midwest registered a five-point gain to 31 and the West registered a four-point gain to 33, while the Northeast and South each posted two-point declines, to 29 and 26, respectively.

Click on graph for larger image.

This graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the June release for the HMI and the April data for starts (May housing starts will be released tomorrow). A reading of 29 was at the consensus.

Housing Investment and Construction Graphs