by Calculated Risk on 9/19/2012 08:30:00 AM

From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately-owned housing starts in August were at a seasonally adjusted annual rate of 750,000. This is 2.3 percent above the revised July estimate of 733,000 and is 29.1 percent above the August 2011 rate of 581,000.

Single-family housing starts in August were at a rate of 535,000; this is 5.5 percent above the revised July figure of 507,000.

Building Permits:
Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 803,000. This is 1.0 percent below the revised July rate of 811,000, but is 24.5 percent (±1.7%) above the August 2011 estimate of 645,000.

Single-family authorizations in August were at a rate of 512,000; this is 0.2 percent above the revised July figure of 511,000.

Click on graph for larger image.

The first graph shows single and multi-family housing starts for the last several years. Starts are slowing increasing.

Total housing starts were at 750 thousand (SAAR) in August, up 2.3% from the revised July rate of 733 thousand (SAAR). Note that July was revised from 746 thousand.

Single-family starts increased 5.5% to 535 thousand in August.

The second graph shows total and single unit starts since 1968.

This shows the huge collapse following the housing bubble, and that total housing starts have been increasing lately after moving sideways for about two years and a half years.

Total starts are up 57% from the bottom start rate, and single family starts are up 51% from the low.

This was below expectations of 768 thousand starts in August - mostly because of the volatile multi-family sector - but the key is starts are up solidly from last year. Right now starts are on pace to be up about 25% from 2011. Also note that total permits are up sharply from last year.

All Housing Investment and Construction Graphs

by Calculated Risk on 9/19/2012 07:03:00 AM

From the MBA: Mortgage Rates Drop to New Survey Lows

The Refinance Index increased 1 percent from the previous week. The HARP 2.0 share of refinance applications was 22 percent this past week. The seasonally adjusted Purchase Index decreased 4 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 3.72 percent, the lowest rate in the history of the survey, from 3.75 percent, with points increasing to 0.45 from 0.44 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

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.

It looks like refinance activity is picking up again as mortgage rates decline.

by Calculated Risk on 9/18/2012 08:30:00 PM

Tomorrow will be about housing, and recently that has meant a little better news ...

• At 7:00 AM ET, the Mortgage Bankers Association (MBA) will release the mortgage purchase applications index. Purchase applications have mostly been moving sideways this year at a low level.

• At 8:30 AM, Housing Starts for August will be released. The consensus is for total housing starts to increase to 768,000 (SAAR) in August, up from 746,000 in July.

• At 10:00 AM, the National Association of Realtors (NAR) will release the existing Home Sales report for August. The consensus is for sales of 4.55 million on seasonally adjusted annual rate (SAAR) basis. Housing economist Tom Lawler expects sales to be about 4.87 million SAAR.

A key will be inventory and months-of-supply. It is possible that months-of-supply will be close to 6.0 months; the lowest level for August since 2005.

• During the day: The AIA's Architecture Billings Index for August (a leading indicator for commercial real estate).

Two more questions for the September economic prediction contest (Note: You can now use Facebook, Twitter, or OpenID to log in).

by Calculated Risk on 9/18/2012 06:18:00 PM

From the Financial Times: Saudis offer extra oil to control prices

Saudi Arabia has offered ... extra oil supplies through the end of the year, a sign the world’s largest exporter is worried about the impact of rising prices on the global economy.
...
“The current price is too high,” a senior Gulf-based oil official told the Financial Times. “We would like to see oil prices back to $100 a barrel.”
excerpt with permission

This might just be talk ... oil prices are down sharply over the last two days, however Brent futures are still at $112.52 per barrel according to Bloomberg.

Meanwhile, gasoline prices are still very high. From the Oregonian: Oregon, Washington gas prices moving in reverse, but still at historic highs

In the past week, the average price of a gallon of regular unleaded in Oregon dropped three centers to $4.01, the nation’s 10th most expensive.

Washington has the nation’s sixth most-expensive gasoline for the second week in a row at $4.05, down a penny from last week.

The national average -- at $3.86 -- actually added a cent-and-a-half. For the first time since early April, Dodds said, 10 states, including California, Washington and Oregon, have averages at or above $4 a gallon, up from nine a week ago.

The following graph shows the recent increase in gasoline prices. Gasoline prices peaked in early April, then fell sharply in May and June - and have increased sharply since early July.

Note: If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent; gasoline prices in most of the U.S. are impacted more by Brent prices.

Orange County Historical Gas Price Charts Provided by GasBuddy.com

by Calculated Risk on 9/18/2012 03:19:00 PM

I expect this to get extended, but it is probably motivating some people to try to close their short sale before the end of the year.

From Carolyn Said at the San Francisco Chronicle: Clock ticking on forgiven-debt tax break

Before the housing downturn hit, "forgiven debt" on home mortgages could be taxed as income. For instance, if your lender lopped $50,000 off what you owed (a type of loan modification called principal reduction), if you short-sold the property for $50,000 less than your mortgage or if your lender foreclosed on a property worth $50,000 less than you owed, the $50,000 would be treated as income, adding up to a potential big bill for state and federal taxes.

But with millions of struggling homeowners in such situations, both the Congress and the California Legislature passed bills to exempt forgiven home debt from taxes.

But now the Mortgage Forgiveness Debt Relief Act of 2007 is due to expire on Dec. 31. The election-year Congress, already famously fractious, is not expected to act on it in 2012, although industry experts hope it could get extended next year. ...
Even if the act eventually gets renewed, it doesn't cover all homeowners.

"It applies only to the mortgage you originally got to acquire the home or to a refi used to improve the home," said Stephen Moskowitz, a tax attorney in San Francisco.

Homeowners who did cash-out refinances and used the money for any other purpose than fixing up their house could still be on the hook for forgiven debt.