by Calculated Risk on 10/16/2012 12:25:00 PM

From Realtor.com: September 2012 Real Estate Data

The total US for-sale inventory of single family homes, condos, townhomes and co-ops remained at historic lows, with 1.8 million units for sale in September 2012, down -17.77% compared to a year ago.

The median age of inventory was down -11.21% compared to one year ago.

For sale inventories declined on a year-over-year basis in 143 of the 146 markets tracked by Realtor.com. Fifty two cities saw year-over-year declines greater than 20%.

On a month-over-month basis, inventory declined in 126 of 146 markets.

I expect to see smaller year-over-year declines going forward simply because inventory is already very low.

The NAR is scheduled to report September existing home sales and inventory on Friday. The key number in the NAR report will be inventory, and inventory will be down sharply year-over-year again in September.

by Calculated Risk on 10/16/2012 10:00:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) increased 1 point in October to 41. Any number under 50 indicates that more builders view sales conditions as poor than good.

From the NAHB: Builder Confidence Edges Higher in October

Builder confidence in the market for newly built, single-family homes edged slightly higher for a sixth consecutive month in October, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The latest, one-point gain brings the index to 41, its strongest level since June of 2006.

“The slight gain in builder confidence this month is an indication that, while still moving forward, the speed at which the housing recovery is proceeding is being moderated by the various constraints such as tight credit, difficult appraisals and more recently, the limited inventory of buildable lots in certain markets,” explained NAHB Chief Economist David Crowe. “These are the complicating factors that make it difficult for builder confidence to reach and surpass the 50-point mark, at which an equal number of builders view sales conditions as good versus poor.”
...
Following substantial increases in the previous month, the HMI components measuring current sales conditions and sales prospects for the next six months each remained unchanged in October at 42 and 51, respectively. Meanwhile, the component measuring traffic of prospective buyers increased 5 points to 35, its highest level since April of 2006.

Builder confidence continued to improve in three out of four regions in October. Looking at three-month moving averages, the HMI gained two points in the Midwest and West to 42 and 44, respectively, and three points in the South, to 39. A three-month moving average for the Northeast’s HMI held unchanged at 29.

Click on graph for larger image.

This graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the October release for the HMI and the August data for starts (September housing starts will be released tomorrow). This was at the consensus estimate of a reading of 41.

Housing Investment and Construction Graphs

by Calculated Risk on 10/16/2012 09:15:00 AM

From the Fed: Industrial production and Capacity Utilization

Industrial production rose 0.4 percent in September after having fallen 1.4 percent in August. For the third quarter as a whole, industrial production declined at an annual rate of 0.4 percent. Manufacturing output increased 0.2 percent in September but moved down at an annual rate of 0.9 percent in the third quarter. Production at mines advanced 0.9 percent in September, and the output of utilities moved up 1.5 percent. Roughly 0.3 percentage point of the decline in overall industrial production in August reflected the effect of precautionary idling of production in late August along the Gulf of Mexico in anticipation of Hurricane Isaac, and part of the rise in September is a result of the subsequent resumption of activity at idled facilities. At 97.0 percent of its 2007 average, total industrial production in September was 2.8 percent above its year-earlier level. Capacity utilization for total industry moved up 0.3 percentage point to 78.3 percent, a rate 2.0 percentage points below its long-run (1972--2011) average.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up 11.5 percentage points from the record low set in June 2009 (the series starts in 1967).

Capacity utilization at 78.3% is still 2.0 percentage points below its average from 1972 to 2010 and below the pre-recession level of 80.6% 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 September to 97.0. This is 16% above the recession low, but still 3.7% below the pre-recession peak.

The consensus was for Industrial Production to increase 0.2% in September, and for Capacity Utilization to increase to 78.3%. IP was slightly above expectations (some bounce back from shut downs related to Hurricane Isaac) and Capacity Utilization was at expectations. Overall Industrial Production has moved sideways this year.

All current manufacturing graphs

by Calculated Risk on 10/16/2012 08:30:00 AM

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment. For the second month in a row, the substantial increase in the all items index was mostly the result of an increase in the gasoline index, which rose 7.0 percent in September after increasing 9.0 percent in August.
...
The index for all items less food and energy rose 0.1 percent for the third month in a row.

I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI. This was above the consensus forecast of a 0.5% increase for CPI, and below the consensus for a 0.2% increase in core CPI.

The increase in CPI was mostly due to the sharp increase in gasoline prices.

Cost-Of-Living Adjustment (COLA): The BLS reported CPI-W increased to 2281.84 in September, for a Q3 average of 226.936. In Q3 2011, CPI-W average 223.33. The annual Social Security Cost-Of-Living Adjustment will be 1.66% (will be rounded).

by Calculated Risk on 10/15/2012 08:54:00 PM

From the WSJ: Proposal Would Give Banks Protection in Cases Involving Top-Quality Mortgages

The proposal for the first time would establish a basic national standard for loans, known as a "qualified mortgage."

As part of its deliberation, the Consumer Financial Protection Bureau is considering providing a full legal shield for high-quality loans that qualify, mandating that judges rule in lenders' favor if consumers contest foreclosures, these people say.

For a smaller category of loans that still meet the "qualified mortgage" guidelines but carry higher interest rates—a group similar to "subprime loans"—lenders would receive fewer protections. In those cases, consumers could argue in court that lenders should have known that they couldn't afford the mortgage.

On Tuesday:
• At 8:30 AM ET, the Consumer Price Index for September will be released. The consensus is for CPI to increase 0.5% in September and for core CPI to increase 0.2%. This release will determine the Cost-of-living-adjustment for Social Security. Currently I expect COLA to be around 1.6%.

• At 9:15 AM, the Fed will release Industrial Production and Capacity Utilization for September. The consensus is for Industrial Production to increase 0.2% in September, and for Capacity Utilization to increase to 78.3%.

• At 10:00 AM, the October NAHB homebuilder survey will be released. The consensus is for a reading of 41, up from 40 in September. Although this index has been increasing lately, any number below 50 still indicates that more builders view sales conditions as poor than good.  This index bottomed at 8 in January 2009, and was at or below 22 for over 4 1/2 years.


Another question for the October economic prediction contest (Note: You can now use Facebook, Twitter, or OpenID to log in).