by Calculated Risk on 7/12/2013 04:27:00 PM

Economist Tom Lawler sent me the table below of short sales, foreclosures and cash buyers for several selected cities in June. Lawler writes:

Note that in Phoenix, not only was the distressed sales share down sharply from a year ago, but also that the all-cash share of home sales – while still abnormally high – was also down significantly from a year ago. Overall sales were down 9.9% from last June, and it appears as if “investor” buying might be slowing down a bit.

Vegas’ distressed sales share last month was also down significantly from last June, but the all-cash share was actually up slightly. Overall sales were down 7.7% from last June. Investors still appear to be a dominant force in Vegas, while owner-occupant buying still appears weak.

From CR: Look at the two columns in the table for Total "Distressed" Share. In every area that has reported distressed sales so far, the share of distressed sales is down year-over-year - and down significantly in many areas. 

Also there has been a decline in foreclosure sales in all of these cities.

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share		All Cash Share
	Jun-13	Jun-12	Jun-13	Jun-12	Jun-13	Jun-12	Jun-13	Jun-12
Las Vegas	31.0%	34.2%	9.0%	27.8%	40.0%	62.0%	55.3%	54.0%
Reno	24.0%	37.0%	6.0%	21.0%	30.0%	58.0%
Phoenix	12.7%	32.8%	8.7%	14.1%	21.5%	46.8%	37.5%	46.9%
Sacramento	23.2%	31.0%	7.5%	19.7%	30.7%	50.7%	29.9%	33.4%
Minneapolis	6.0%	9.6%	15.7%	25.1%	21.7%	34.6%
Mid-Atlantic	7.6%	10.2%	6.3%	8.7%	13.9%	18.9%	15.9%	16.5%
Hampton Roads					22.8%	28.8%
Northeast Florida					35.6%	39.9%
Memphis*			18.2%	29.6%
Birmingham AL			19.4%	26.4%
Springfield IL			12.0%	9.2%
Tucson							32.8%	34.9%
Omaha							14.9%	14.4%
Toledo							28.1%	33.0%
Des Moines							17.5%	18.9%
*share of existing home sales, based on property records

by Calculated Risk on 7/12/2013 01:40:00 PM

From housing economist Tom Lawler:

Based on the limited number of local realtor/MLS reports I’ve seen so far, I estimate that existing home sales as measured by the National Association of Realtors ran at a seasonally adjusted annual rate of about 4.99 million in June, down 3.7% from May’s pace. While sales results varied massively across the country, there were several areas where YOY sales slowed by much more than “seasonals/day-counts” would have suggested. Note that I usually wait until I have a larger “sample” of regional reports, and I’ll update my estimate early next week.

On the inventory front, most but not all reports showed a monthly gain in listings in June, and just looking at listings data one would expect that national home-sales inventories in June [increased] by about a little more than 2%. Taking into account differences over time in NAR estimates vs. listings data, however, I’d estimate that the NAR estimate of the number of existing homes for sale in June will be unchanged from May, which would imply a YOY decline of 6.3%.

CR Note: The NAR is scheduled to report June existing home sales on Monday, July 22nd.

Based on Tom's estimates, this would put inventory at around 2.2 million for June, and months-of-supply around 5.3 (up from 5.1 months in May). This would still be a very low level of inventory - probably the lowest for May since 2002 or so - but a 6.3% year-over-year decline in inventory would be the smallest year-over-year decline since early 2011 (when inventory started to decline sharply).  Note: In May, inventory was down 10.1% compared to May 2012.   These smaller year-over-year declines suggest inventory bottomed earlier this year.

by Calculated Risk on 7/12/2013 10:05:00 AM

Click on graph for larger image.

The preliminary Reuters / University of Michigan consumer sentiment index for July decreased slightly to 83.9 from the final June reading of 84.1.

This was below the consensus forecast of 84.1. Sentiment has generally been improving following the recession - with plenty of ups and downs - and one big spike down when Congress threatened to "not pay the bills" in 2011.  Note: Congress is starting to make threats again, luckily this only happens in non-election years.

by Calculated Risk on 7/12/2013 08:47:00 AM

A few excerpts from the JPMorgan investor presentation (Q2 results):

Mortgage Production pretax income of $582mm, down $349mm YoY, reflecting lower margins and higher expense, partially offset by higher volumes and lower repurchase losses

Mortgage originations of $49.0B, up 12% YoY and down 7% QoQ

Purchase originations of $17.4B, up 50% YoY and 44% QoQ
...
If charge-offs and delinquencies continue to trend down, there will be continued reserve reductions

Realized repurchase losses may be offset by reserve reductions based on current trends

If primary mortgage rates remain at or above current levels, refinance volumes and margins will be under pressure and Mortgage Production profitability will be challenged
emphasis added

Click on graph for larger image.

This graph is from the JPMorgan presentation this morning. The good news is mortgage delinquencies are trending down, and purchases originations are up sharply year-over-year.

However the refinance volumes and margins will probably fall off a cliff in Q3.

by Calculated Risk on 7/11/2013 11:38:00 PM

From Merrill Lynch:

It would be nice to be a fly on the wall the September FOMC meeting. There is now a strong consensus that QE tapering is inevitable in September. At that meeting the FOMC will be updating its forecasts. Hence, if they do taper, the Fed may have to explain why they are doing it despite the downward revisions in their forecast. That could be quite a tapering tap dance. This is one reason we expect the Fed to delay tapering to December.

It is clear tapering is coming soon, but I also think the Fed will wait until the December meeting.  I could change my mind based on incoming data.

Thursday:
• At 8:30 AM ET, the Producer Price Index for June. The consensus is for a 0.5% increase in producer prices (0.2% increase in core).

• At 9:55 AM, the Reuter's/University of Michigan's Consumer sentiment index (preliminary for July). The consensus is for a reading of 84.1 unchanged from June.