by Calculated Risk on 8/14/2013 08:31:00 AM

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

Mortgage applications decreased 4.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 9, 2013. ...

The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index decreased 5 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 4.56 percent from 4.61 percent, with points decreasing to 0.39 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
...
The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.60 percent from 3.66 percent, with points decreasing to 0.35 from 0.43 (including the origination fee) for 80 percent LTV loans.
emphasis added

Click on graph for larger image.

The first graph shows the refinance index.

With 30 year mortgage rates up over the last 3 months, refinance activity has fallen sharply, decreasing in 12 of the last 14 weeks.

This index is down 59% over the last 3 months.   The last time the index declined this far was in late 2010 and early 2011 when mortgage increased sharply with the Ten Year Treasury rising from 2.5% to 3.5%.  We've seen a similar increase over the last few months with the Ten Year Treasury yield up from 1.6% to over 2.7% today.

The second graph shows the MBA mortgage purchase index.  The 4-week average of the purchase index has generally been trending up over the last year (but down over the couple of months), and the 4-week average of the purchase index is up about 7% from a year ago.

by Calculated Risk on 8/13/2013 07:39:00 PM

From Zillow today: 30-Year Fixed Mortgage Rates Rise for Third Consecutive Week

Mortgage rates for 30-year fixed mortgages rose this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 4.31 percent, up from 4.28 percent at this same time last week.

The 30-year fixed mortgage rate hovered between 4.2 and 4.27 percent early last week before rising to the current rate this morning.

“Rates remained steady for the second week in a row, alleviating some concerns that they would continue the upward surge that began early this summer,” said Erin Lantz, director of Zillow Mortgage Marketplace. “This week, although we expect continued volatility, we expect rates will remain fairly steady until a clearer picture emerges about the strength of the U.S. economic recovery.”

The ten year Treasury yield closed at 2.72% today, up from 2.61% yesterday - so mortgage rates will probably increase a little more. This will put another nail in the refinance boom coffin.

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

• At 8:30 AM, the Producer Price Index for July will be released. The consensus is for a 0.3% increase in producer prices (0.2% increase in core).

• At 11:00 AM, the Q2 2013 Quarterly Report on Household Debt and Credit will be released by the Federal Reserve Bank of New York.

by Calculated Risk on 8/13/2013 03:12:00 PM

Economist Tom Lawler noted today:

While I have not seen enough local realtor/MLS reports to derive an accurate estimate of existing home sales as measured by the National Association of Realtors, the data I have seen so far strongly suggest that July existing home sales on a seasonally adjusted basis will be up significantly from June’s disappointing pace.

Lawler also sent the updated table below of short sales, foreclosures and cash buyers for several selected cities in July.

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 significantly year-over-year. 

Also there has been a decline in foreclosure sales in all of these cities, except Springfield, IL .  

And short sales are declining year-over-year too!  This is a recent change - short sales had been increasing year-over-year, but it looks like both categories of distressed sales are now declining.

The All Cash Share appears to be starting to decline.  The all cash share will probably decline further as investors buying declines

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share		All Cash Share
	Jul-13	Jul-12	Jul-13	Jul-12	Jul-13	Jul-12	Jul-13	Jul-12
Las Vegas	28.0%	40.0%	8.0%	20.7%	36.0%	60.7%	54.5%	54.8%
Reno	21.0%	38.0%	7.0%	15.0%	28.0%	53.0%
Phoenix	11.5%	29.5%	9.4%	14.6%	20.8%	44.1%	35.8%	44.9%
Sacramento	19.7%	31.0%	7.3%	23.2%	27.0%	54.2%	25.5%	31.1%
Minneapolis	5.6%	9.3%	15.0%	24.5%	20.6%	33.8%
Mid-Atlantic	7.2%	11.3%	6.6%	8.7%	13.8%	20.0%	16.1%	17.9%
Charlotte					9.5%	13.8%
Des Moines							15.1%	18.8%
Peoria							18.6%	20.7%
Pensacola							30.0%	31.2%
Omaha							15.9%	15.6%
Tucson							29.1%	33.3%
Memphis*			16.7%	26.9%
Birmingham AL			17.2%	27.2%
Springfield IL			13.1%	13.0%
*share of existing home sales, based on property records

by Calculated Risk on 8/13/2013 12:32:00 PM

From Nick Timiraos at the WSJ: Housing Inventory Rose in July

The number of homes being offered for sale is rising heading into the softer part of the summer, a sign that higher home prices could be encouraging more sellers to test the market, according to a report released Tuesday.

Nationally, the number of homes for sale stood 5.2% below the levels of a year earlier. But inventories rose by 1.4% from June, an indication that the inventory crunch could finally be easing, data from Realtor.com showed.
emphasis added

Note: Here is the realtor.com site (not updated with July data yet at posting time). The year-over-year decline is getting smaller each month. As an example, Realtor.com reported that the year-over-year decline was 16% in February, and declined to 7.3% in June - and is now at 5.2%.

Last month, the NAR reported inventory was down 7.6% from June 2012. That was the smallest year-over-year (YoY) decrease since 2011, and it appears the YoY change will turn positive soon.  My guess is the YoY change for inventory will probably turn positive in September and that inventory bottomed in early 2013.

by Calculated Risk on 8/13/2013 10:11:00 AM

Earlier this morning from the National Federation of Independent Business (NFIB): Small Business Optimism Up Marginally

Small business optimism [increased] in July, with NFIB’s monthly Index increasing just over half a point (0.6) for a total reading of 94.1. ... On the positive front, while the two labor market indicators remained weak, both improved and are beginning to push into "normal" territory. ...

Credit continues to be a non-issue for small employers, five percent of whom say that all their credit needs were not met in July, unchanged from June and May, and the lowest reading since February 2008.

Small business hiring plans increased in the July survey to a reading of 9 from 7 in June (zero is neutral). This was the 2nd highest reading since 2008.

In another small sign of good news, only 16% of owners reported weak sales as the top problem (lack of demand). This was down from 18% last month, down from 20% a year ago, and half the peak of 33% during the recession. During good times, small business owners usually complain about taxes and regulations - and those are now the top problems again.

Click on graph for larger image.

This graph shows the small business optimism index since 1986. The index increased to 94.1 in July from 93.5 in June.   This is still low, but just below the post-recession high.

Note: Small businesses have a larger percentage of real estate and retail related companies than the overall economy.