by Calculated Risk on 9/03/2014 11:50:00 AM

From John Sousanis at WardsAuto Counting Cars: Summer Sales Heat Up

SUMMARY: With a few exceptions, automakers are reporting higher than expected August sales, pointing to the possibility that the forecasted July 17-million SAAR, which failed to materialize, just may have been a month late coming.

WardsAuto is currently projecting sales in August at 17.06 million seasonally adjusted annual rate (SAAR).  This would be the highest sales rate since July 2006.

A few excerpts:

Toyota beat WardsAuto expections by nearly 9%, delivering 246,100 LVs in August. The automaker's daily sales rose 10.2% from same-month year-ago ...

[Ford] daily deliveries up just 3.9% over same-month year-ago, on total LV sales of 217,040.
...
General Motors poored a little cold water on August sales reports, recording a 2.4% DSR gain on year-ago, with LV deliveries of 272,243 units - 3% below WardsAuto's expectations for the company ...

Nissan is reporting August sales of almost 135,000 LVs, a 15.7% rise in DSR compared with same-month 2013. Volkswagen brand daily sales fell 9.6%, but the result was better than expected, with VW moving 35,181 units during the month.

Fiat-Chrysler reports over 197,000 LV deliveries in August, a massive 24.2% leap over year-ago sales

by Calculated Risk on 9/03/2014 07:01:00 AM

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

Mortgage applications increased 0.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 29, 2014. ...

The Refinance Index increased 1 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. ...
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.25 percent, the lowest level since June 2013, from 4.28 percent, with points decreasing to 0.24 from 0.25 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.


The first graph shows the refinance index.

The refinance index is down 73% from the levels in May 2013.

As expected, refinance activity is very low this year.


The second graph shows the MBA mortgage purchase index.  

According to the MBA, the unadjusted purchase index is down about 12% from a year ago.

by Calculated Risk on 9/02/2014 05:30:00 PM

Wednesday:
• All day, Light vehicle sales for August. The consensus is for light vehicle sales to increase to 16.5 million SAAR in August from 16.4 million in July (Seasonally Adjusted Annual Rate).

• 10:00 AM, Manufacturers' Shipments, Inventories and Orders (Factory Orders) for July. The consensus is for a 10.5% increase in July orders.

• At 2:00 PM, Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their District

Oil prices were down sharply today with Brent October futures down to $100.58 per barrel according to Bloomberg.  A year ago Brent was at $115 per barrel - so this is a significant year-over-year decline.

The recent decline in prices could give a little boost to consumer spending on other items. This decline will also hold down the annual cost-of-living-adjustment (COLA) for this year.

Below is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are around $3.43 per gallon (down about a 15 cents per gallon from a year ago).  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 9/02/2014 12:03:00 PM

Notes: This CoreLogic House Price Index report is for July. The recent Case-Shiller index release was for June. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic Reports Home Prices Rose by 7.4 Percent Year Over Year in July

Home prices nationwide, including distressed sales, increased 7.4 percent in July 2014 compared to July 2013. This change represents 29 months of consecutive year-over-year increases in home prices nationally. On a month-over-month basis, home prices nationwide, including distressed sales, increased 1.2 percent in July 2014 compared to June 2014.
...
Excluding distressed sales, home prices nationally increased 6.8 percent in July 2014 compared to July 2013 and 1.1 percent month over month compared to June 2014. ...

“While home prices have clearly moderated nationwide since the spring, the geographic drivers of price increases are shifting,” said Sam Khater, deputy chief economist for CoreLogic. “Entering this year, price increases were led by western and southern states, but over the last few months northeastern and midwestern states are migrating to the forefront of home price rankings.”
emphasis added

Click on graph for larger image.

This graph shows the national CoreLogic HPI data since 1976. January 2000 = 100.

The index was up 1.2 in July, and is up 7.4% over the last year.

This index is not seasonally adjusted, so a solid month-to-month gain was expected for July.


The second graph is from CoreLogic. The year-over-year comparison has been positive for twenty nine consecutive months suggesting house prices bottomed early in 2012 on a national basis (the bump in 2010 was related to the tax credit).

The YoY increase was slightly higher in July than in June (revised), however I expect the year-over-year increases to continue to slow.

by Calculated Risk on 9/02/2014 10:47:00 AM

Earlier the Census Bureau reported that overall construction spending increased in July:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during July 2014 was estimated at a seasonally adjusted annual rate of $981.3 billion, 1.8 percent above the revised June estimate of $963.7 billion. The July figure is 8.2 percent above the July 2013 estimate of $906.6 billion.

Both private and public spending increased in July:

Spending on private construction was at a seasonally adjusted annual rate of $701.7 billion, 1.4 percent above the revised June estimate of $692.2 billion. Residential construction was at a seasonally adjusted annual rate of $358.1 billion in July, 0.7 percent above the revised June estimate of $355.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $343.6 billion in July, 2.1 percent above the revised June estimate of $336.6 billion. ...

In July, the estimated seasonally adjusted annual rate of public construction spending was $279.6 billion, 3.0 percent above the revised June estimate of $271.5 billion.
emphasis added

Click on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Private residential spending has flattened recently and is 47% below the peak in early 2006 - but up 57% from the post-bubble low.

Non-residential spending is 17% below the peak in January 2008, and up about 52% from the recent low.

Public construction spending is now 14% below the peak in March 2009 and about 7% above the post-recession low.

The second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is now up 8%. Non-residential spending is up 14% year-over-year. Public spending is up 2% year-over-year.

Looking forward, all categories of construction spending should increase in 2014. Residential spending is still very low, non-residential is starting to pickup, and public spending has probably hit bottom after several years of austerity.

This was a strong report, especially considering the upward revisions to spending in May and June.