by Calculated Risk on 9/05/2012 10:00:00 AM

Press Release: Trulia Reports Asking Home Prices up 2.3 Percent, Biggest Year Over Year Increase Since Recession

Trulia today released the latest findings from the Trulia Price Monitor and the Trulia Rent Monitor, the earliest leading indicators available of trends in home prices and rents. Based on the for-sale homes and rentals listed on Trulia, these monitors take into account changes in the mix of listed homes and reflect trends in prices and rents for similar homes in similar neighborhoods through August 31, 2012.

Asking prices on for-sale homes–which lead sales prices by approximately two or more months – increased 2.3 percent in August year over year (Y-o-Y) and rose in 68 of the 100 largest metros. Excluding foreclosures, prices rose 3.8 percent Y-o-Y. These are the largest Y-o-Y gains since the recession. Meanwhile, asking prices rose nationally 1.8 percent quarter over quarter (Q-o-Q), seasonally adjusted. Month-over-month (M-o-M) asking prices rose by 0.8 percent, the seventh consecutive month of increases.
...
Nationally, rents rose 4.7 percent Y-o-Y in August, compared to 5.8 percent Y-o-Y in May – making it the slowest rise since March. At the regional level, rents jumped more than 10 percent Y-o-Y in Houston and Seattle, but slowed in Denver, San Francisco, Miami, Oakland and Boston.
...
“Asking prices rose 2.3 percent year over year in August, hitting two housing recovery milestones,” said Jed Kolko, Trulia’s Chief Economist. “First, asking prices rose faster than at any time since the recession. Second, asking prices excluding foreclosures are now rising faster than wages, putting an end to many years of affordability gains. In addition, price gains are catching up with slowing rent increases, which will tip some renters in favor of staying put in their rentals rather than buying a home.”

These asking prices are SA (Seasonally Adjusted) - and adjusted for the mix of homes - and this suggests further house price increases over the next few months on a SA basis.

More from Jed Kolko, Trulia Chief Economist: Asking Prices Rise 2.3% Year Over Year: Biggest Increase Since Recession

by Calculated Risk on 9/05/2012 07:01:00 AM

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

The Refinance Index decreased 3 percent from the previous week to the lowest level since May 2012. The seasonally adjusted Purchase Index decreased 0.8 percent from one week earlier.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.78 percent from 3.80 percent, with points decreasing to 0.37 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Click on graph for larger image.

This graph shows the MBA mortgage purchase index.

The purchase index has been mostly moving sideways over the last two years.

by Calculated Risk on 9/04/2012 08:06:00 PM

I've been puzzling over the MBA purchase index (to be released tomorrow). This index has mostly been moving sideways and hasn't indicated any pickup in home purchases. However there are other indicators (the Fed's recent Senior Loan Officer survey) that suggest there has been an increase in purchase activity.

It is probably worth asking if the data is being impacted by changes in behavior or in the sample. I don't know the answer, but the MBA index has been impacted by changes before.

First here is an excerpt from a Reuters article in October 2006: Greenspan: Housing market worst may be over

The U.S. housing market appears to be emerging from its recent travails and the “worst may well be over,” former Federal Reserve Chairman Alan Greenspan was quoted as saying on Friday.

“I suspect that we are coming to the end of this downtrend, as applications for new mortgages, the most important series, have flattened out,” Greenspan said at an event in Calgary, Canada ...

Of course Greenspan was wrong (as I noted at the time). Here was what I previously wrote: "In mid-2006, the MBA index did flatten out, and in late 2006 the index increased (and increased further in 2007). At that time I spoke with some mortgage brokers, and there was clear evidence of homebuyers applying for mortgages with multiple brokers - this lead to some double counting by the MBA. And in late 2006 the increase was because mortgage brokers started going out of business (this skewed the data, because the MBA samples only certain large brokers – and the large brokers were getting more applications as the weaker companies went under). I identified these flaws and stopped using the MBA index, but Greenspan blindly used the index and drew the wrong conclusion."

Now I'm wondering if the index is being impacted by another change in the mix. Here was an interesting article today from Jon Prior at HousingWire: Credit union mortgage lending doubles in California

California credit unions took advantage of the Home Affordable Refinance Program and originated twice as many home loans in second quarter than the previous three months.
...
Chris Collver, senior regulatory analyst for CANV, said the trend will continue as large firms grow more conservative or exit the more exotic mortgage business entirely.

Credit unions took up about 2% of the space in 2005. That grew to 6.7% of the home credit market in 2011, according to Collver.

Prior's article is focused on refinancing (the MBA Purchase index is for purchases, not refinance activity). But I wonder if some lenders who are not surveyed by the MBA are seeing an increase in activity? It is a puzzle ...

On Tuesday:
• At 7:00 AM ET, the Mortgage Bankers Association (MBA) will release the mortgage purchase applications index.

• At 8:30 AM, the BLS will released Productivity and Costs for Q2. The consensus is for a 1.4% increase in unit labor costs.

• At 10:00 AM, the Trulia Price and Rent Monitors for August will be released. This is the new index from Trulia that uses asking prices adjusted both for the mix of homes listed for sale and for seasonal factors.

by Calculated Risk on 9/04/2012 02:55:00 PM

Based on an estimate from Autodata Corp, light vehicle sales were at a 14.52 million SAAR in August. That is up 17% from August 2011, and up 3% from the sales rate last month.

This was above the consensus forecast of 14.3 million SAAR (seasonally adjusted annual rate).

This graph shows the historical light vehicle sales from the BEA (blue) and an estimate for August (red, light vehicle sales of 14.52 million SAAR from Autodata Corp).

Click on graph for larger image.

The year-over-year increase was fairly large because the auto industry was still recovering from the impact of the tsunami and related supply chain issues in 2011 (the issues were mostly over in September of 2011).

Sales have averaged a 14.17 million annual sales rate through the first seven months of 2012, up from 12.4 million rate for the same period of 2011.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Note: dashed line is current estimated sales rate.

This shows the huge collapse in sales in the 2007 recession.

It looks like auto sales will be up slightly in Q3 compared to Q2, and make another small positive contribution to GDP.

by Calculated Risk on 9/04/2012 01:55:00 PM

Note: I'll post an estimate for August auto sales around 4 PM ET.

Here is another update using inventory numbers from HousingTracker / DeptofNumbers to track changes in listed inventory. Tom Lawler mentioned this last year.

According to the deptofnumbers.com for (54 metro areas), inventory is off 22.6% compared to the same week last year. Unfortunately the deptofnumbers only started tracking inventory in April 2006.

This graph shows the NAR estimate of existing home inventory through July (left axis) and the HousingTracker data for the 54 metro areas through early September.

Click on graph for larger image.

Since the NAR released their revisions for sales and inventory last year, the NAR and HousingTracker inventory numbers have tracked pretty well.

On a seasonal basis, housing inventory usually bottoms in December and January and then increases through the summer. Inventory only increased a little this spring and has been declining for the last four months by this measure. It looks like inventory has peaked for this year.

The second graph shows the year-over-year change in inventory for both the NAR and HousingTracker.

HousingTracker reported that the early September listings, for the 54 metro areas, declined 22.6% from the same period last year.

This decline in active inventory remains a huge story, and the lower level of inventory is pushing up house prices.