by Calculated Risk on 8/10/2014 02:33:00 PM

Here is another graph on framing lumber prices. Early in 2013 lumber prices came close to the housing bubble highs. Then prices declined over 25% from the highs by mid-year 2013.

The price increases in early 2013 were due to a surge in demand (more housing starts) and supply constraints (framing lumber suppliers were working to bring more capacity online).

Prices didn't increase as much early in 2014 (more supply, smaller "surge" in demand), however prices haven't fallen as sharply either.

Click on graph for larger image in graph gallery.

This graph shows two measures of lumber prices: 1) Framing Lumber from Random Lengths through last week (via NAHB), and 2) CME framing futures.

Right now Random Lengths prices are up about 8% from a year ago, and CME futures are up about 7% year-over-year.

by Calculated Risk on 8/09/2014 01:01:00 PM

The key report this week is July retail sales on Wednesday.

For manufacturing, the July Industrial Production and Capacity Utilization report, and the August NY Fed (Empire State) survey, will be released this week. 

For prices, PPI will be released on Friday.

Also the NY Fed Q2 Report on Household Debt and Credit will be released on Thursday.

----- Monday, August 11th -----
3:15 AM ET: Speech by Fed Vice Chairman Stanley Fischer, The Great Recession: Moving Ahead, At the Swedish Ministry of Finance Conference: The Great Recession – Moving Ahead, Stockholm, Sweden

----- Tuesday, August 12th -----
7:30 AM ET: NFIB Small Business Optimism Index for July.

10:00 AM: Job Openings and Labor Turnover Survey for June from the BLS.

This graph shows job openings (yellow line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

In May, the number of job openings (yellow) were up 19% year-over-year compared to May 2013, and Quits were up 15% year-over-year.

2:00 PM ET: The Monthly Treasury Budget Statement for July. Note: The CBO's estimate is the deficit through July in fiscal 2014 was $462 billion, compared to $607 billion for the same period in fiscal 2013.

----- Wednesday, August 13th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM ET: Retail sales for July will be released.

This graph shows retail sales since 1992 through June 2014. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). On a monthly basis, retail sales increased 0.2% from May to June (seasonally adjusted), and sales were up 4.3% from June 2013.

The consensus is for retail sales to increase 0.2% in July, and to increase 0.4% ex-autos.

10:00 AM: Manufacturing and Trade: Inventories and Sales (business inventories) report for June.  The consensus is for a 0.4% increase in inventories.

----- Thursday, August 14th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to increase to 295 thousand from 289 thousand.

11:00 AM: The Q2 2014 Quarterly Report on Household Debt and Credit will be released by the Federal Reserve Bank of New York.

----- Friday, August 15th -----
8:30 AM: NY Fed Empire Manufacturing Survey for August. The consensus is for a reading of 20.0, down from 25.6 in July (above zero is expansion).

8:30 AM: The Producer Price Index for July from the BLS. The consensus is for a 0.1% increase in prices.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for July.

This graph shows industrial production since 1967.

The consensus is for a 0.3% increase in Industrial Production, and for Capacity Utilization to increase to 79.2%.

9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (preliminary for August). The consensus is for a reading of 82.3, up from 81.8 in July.

by Calculated Risk on 8/09/2014 08:15:00 AM

This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for Aug 8, 2014.

Changes and comments from surferdude808:

Two removals lowered the number of institutions on the Unofficial Problem Bank List to 449. Assets declined by $3.0 billion to $142.7 billion. A year earlier, the list held 723 institutions with assets of $255 billion. Enforcement actions were terminated against MetaBank, Storm Lake, IA ($1.9 billion Ticker: CASH) and First American Bank, Fort Dodge, IA ($1.1 billion). Next Friday, we anticipate the OCC to provide an update on its enforcement action activities.

CR Note: The first unofficial problem bank list was published in August 2009 with 389 institutions. The list peaked at 1,002 institutions on June 10, 2011, and is now down to 449.

by Calculated Risk on 8/08/2014 06:43:00 PM

Several years ago I started following the Sacramento market to look for changes in the mix of houses sold (equity, REOs, and short sales).  For a long time, not much changed. But over the last 2+ years we've seen some significant changes with a dramatic shift from foreclosures (REO: lender Real Estate Owned) to short sales, and the percentage of total distressed sales declining sharply.

This data suggests healing in the Sacramento market and other distressed markets are showing similar improvement.  Note: The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

In July 2014, 12.3% of all resales were distressed sales. This was down from 13.3% last month, and down from 23.1% in July 2013. This is the post-bubble low.

The percentage of REOs was at 6.2%, and the percentage of short sales was 6.1%.

Here are the statistics for July.

Click on graph for larger image.

This graph shows the percent of REO sales, short sales and conventional sales.

There has been a sharp increase in conventional sales that started in 2012 (blue) as the percentage of distressed sales declined sharply.

Active Listing Inventory for single family homes increased 68.0% year-over-year in July. 

Cash buyers accounted for 20.9% of all sales, down from 25.5% in July 2013, but up from 19.8% last month (frequently investors).  This has been trending down, and it appears investors are becoming much less of a factor in Sacramento.

Total sales were down 4.5% from July 2013, but conventional equity sales were up 8.9% compared to the same month last year. This is exactly what we expect to see in an improving distressed market - flat or even declining overall sales as distressed sales decline, and conventional sales increasing.

Summary: Distressed sales down sharply (at post bubble low), Cash buyers down significantly, normal equity sales up 8.9% year-over-year, and inventory up significantly.  So price increases should slow, and builders will slow too (with more inventory), and we might see lower land prices in some of these areas. 

As I've noted before, we are seeing a similar pattern in other distressed areas.

by Calculated Risk on 8/08/2014 02:56:00 PM

From housing economist Tom Lawler:

Yesterday Fannie Mae and Freddie Mac both released their quarterly financial results for the second quarter of 2014. On the earnings front Fannie reported that both GAAP net income and comprehensive income last quarter were $3.7 billion, meaning that Fannie expects to pay Treasury $3.7 billion in dividends in September. That payment would bring total dividends paid to Treasury of $130.5 billion, compared to $116.1 billion in cumulative cash draws from Treasury since 2008. Freddie Mac reported GAAP net income of $1.4 billion and comprehensive income of $1.9 billion, meaning that Freddie expects to pay Treasury $1.9 billion in dividends in September. That payment would bring total dividends paid to Treasury of $88.2 billion, compared to $71.3 billion of cumulative cash draws from Treasury since 2008.

Here are some summary delinquency rate stats for the conventional SF mortgage books of both companies.

Payment Status, Fannie Conventional SF Mortgage Book
	6/30/2014	3/31/2014	6/30/2013
30 to 59 days delinquent	1.46%	1.40%	1.85%
60 to 89 days delinquent	0.42%	0.40%	0.51%
seriously delinquent	2.05%	2.19%	2.77%

Payment Status, Freddie Conventional SF Mortgage Book
	6/30/2014	3/31/2014	6/30/2013
One month past due	1.53%	1.40%	1.80%
Two month's past due	0.48%	0.47%	0.55%
Seriously delinquent	2.05%	2.20%	2.79%

Here are some summary stats for SF REO activity at both companies.

	Freddie SF REO Activity			Fannie SF REO Activity
	Acquisitions	Dispositions	Inventory	Acquisitions	Dispositions	Inventory
Q4/10	23,771	26,589	72,079	45,962	50,260	162,489
Q1/11	24,707	31,627	65,159	53,549	62,814	153,224
Q2/11	24,788	29,348	60,599	53,697	71,202	135,719
Q3/11	24,378	25,381	59,596	45,194	58,297	122,616
Q4/11	24,758	23,819	60,535	47,256	51,344	118,528
Q1/12	23,805	25,033	59,307	47,700	52,071	114,157
Q2/12	20,033	26,069	53,271	43,783	48,674	109,266
Q3/12	20,302	22,660	50,913	41,884	43,925	107,225
Q4/12	18,672	20,514	49,071	41,112	42,671	105,666
Q1/13	17,881	18,984	47,968	38,717	42,934	101,449
Q2/13	16,418	19,763	44,623	36,106	40,635	96,920
Q3/13	19,441	16,945	47,119	37,353	33,332	100,941
Q4/13	16,941	16,753	47,307	32,208	29,920	103,229
Q1/14	14,384	18,126	43,565	31,896	32,727	102,398
Q2/14	10,592	18,023	36,134	31,678	37,280	96,796

Fannie Mae reported that for foreclosures completed in the first six months of 2014, the average number of days from the borrowers’ last paid installment on their mortgage to when the related properties were added to Fannie’s REO inventory was 918 – or slightly over 2 ½ years. Average days to foreclosure were especially long in New York (1,371), Florida (1,332), and New Jersey (1,307).

Freddie Mac reported that for foreclosures completed in the first six months of 2014, the average number of days from the borrowers’ last scheduled payment to when the related properties were added to Freddie’s REO inventory was 875 days. Average days to foreclosure ranged from 403 in Missouri to 1,337 in New Jersey.

Fannie Mae’s average charged guaranty fee on SF mortgages acquisitions last quarter was 62.6 bp, little changed from 63.0 bp in the previous quarter but up considerably from 25.7 bp average in 2010. Pursuant to the Temporary Payroll Tax Cut Continuation Act of 2011 (the “TCCA”), on April 1, 2012 Fannie increased Gfees by 10 bp, and the incremental revenue from this 10 bp is remitted to Treasury.

Freddie Mac’s average charged guaranty fee on SF mortgage acquisitions last quarter was 58 bp, up from 56 bp in the previous quarter and well above the 25 bp average in 2010. Pursuant to the TCCA, on April 1, 2012 Freddie increased Gfees by 10 bp, and the incremental revenue from this 10 bp is remitted to Treasury.

Fannie Mae’s “national” home price index, a unit-weighted repeat sales index based on purchase transactions in Fannie-Freddie acquisitions and public deed data, increased by 5.9% from the second quarter of 2013 to the second quarter of 2014. In 2013 this HPI increased by 8.3% (Q4/Q4).

Freddie Mac’s “national” home price index, a value-weighted repeat transactions index (using weights based on each state’s share of Freddie’s SF book) based on repeat transactions on residential properties acquired by Freddie or Fannie (purchase transactions and some refinance transactions), increased by 6.1% from June 2013 to June 2014. In 2013 this HPI increased by 9.3%.