RSS Feed by Calculated Risk on 9/23/2014 10:03:00 AM
Tuesday, September 23, 2014
Richmond Fed: "Manufacturing conditions strengthened in September"
From the Richmond Fed: Manufacturing Sector Activity Grew Moderately; Employment Improved, Average Wages Edged Down
Overall, manufacturing conditions strengthened in September. The composite index for manufacturing moved to a reading of 14 following last month's reading of 12. The index for shipments edged up one point, ending at 11, while the index for new orders also gained one point, finishing at a reading of 14. ...Another solid regional manufacturing report for September.
Manufacturing employment picked up this month; the September index advanced six points ending at 17. The average workweek lengthened, moving the index up two points to end at 10. However, average wages slowed somewhat compared to a month ago, with that index ending two points below the previous month at 9.
Producers remained positive about business conditions for the six months ahead. They expected solid growth in shipments and in the volume of new orders. The indexes for expected shipments and new orders ended at readings of 41 and 37, respectively, slightly below their outlook of a month ago.
emphasis added
FHFA: House Prices increase 0.1% in July, Up 4.4% Year-over-year
by Calculated Risk on 9/23/2014 09:14:00 AM
This house price index is only for houses with Fannie or Freddie mortgages. Note: There is also a quarterly expanded index that was up 5.8% year-over-year in Q2.
From the FHFA: FHFA House Price Index Rises in July
U.S. house prices rose in July, up 0.1 percent on a seasonally adjusted basis from the previous month, according to the Federal Housing Finance Agency (FHFA) monthly House Price Index (HPI). The previously reported 0.4 percent increase in June was revised to reflect a 0.3 percent increase.
The FHFA HPI is calculated using home sales price information from mortgages either sold to or guaranteed by Fannie Mae and Freddie Mac. From July 2013 to July 2014, house prices were up 4.4 percent. The U.S. index is 6.4 percent below its April 2007 peak and is roughly the same as the July 2005 index level. This is the eighth consecutive monthly house price increase.
For the nine census divisions, seasonally adjusted monthly price changes from June 2014 to July 2014 ranged from -0.5 percent in the Middle Atlantic division to +0.4 percent in the East North Central division. The 12-month changes were all positive ranging from +1.6 percent in the Middle Atlantic division to +7.2 percent in the Pacific division.
emphasis added
Monday, September 22, 2014
Mortgage News Daily: Mortgage Rates at 4.22%, Down from 4.45% Last September
by Calculated Risk on 9/22/2014 08:41:00 PM
I use the weekly Freddie Mac Primary Mortgage Market Survey® (PMMS®) to track mortgage rates. The PMMS series started in 1971, so there is a fairly long historical series.
For daily rates, the Mortgage News Daily has a series that tracks the PMMS very well, and is usually updated daily around 3 PM ET. The MND data is based on actual lender rate sheets, and is mostly "the average no-point, no-origination rate for top-tier borrowers with flawless scenarios". (this tracks the Freddie Mac series).
MND reports that average 30 Year fixed mortgage rates decreased today to 4.22% from 4.24% on Friday.
One year ago, on Sept 22, 2013, rates were at 4.45%. In 2013, mortgage rates increased rapidly in June, and that led to slower existing home sales later in the year. Sales were still high in July and August - following the rate increase - because borrowers had locked in mortgage rates.
This year, rates have been mostly moving sideways over the last few months - so sales probably won't be negatively impacted by mortgage rates like last year - and existing home sales will probably be up a little year-over-year later this year.
Here is a table from Mortgage News Daily:
Lawler: Existing Home Sales Eased in August; NAR Bogusly Blames Monthly Dip on “Retreat” by “All Cash” Investors
by Calculated Risk on 9/22/2014 04:07:00 PM
From housing economist Tom Lawler:
In today’s existing home sales report, the National Association of Realtors estimated that US existing home sales ran at a seasonally adjusted annual rate of 5.05 million, down 1.8% from July’s downwardly-revised (to 5.14 million from 5.15 million), and down 5.3% from last August’s pace. The NAR’s estimate was slightly lower than my below-consensus projection based on regional tracking. The NAR also estimated that the number of existing homes for sale at the end of August was 2.31 million, down 1.7% from July’s downwardly-revised (to 2.35 million from 2.37 million) but up 4.5% from last August. The NAR’s inventory estimate was also slightly lower than my projection based on regional tracking. Finally, the NAR estimated that the median existing home sales price last month was $219,800, up 4.8% from last August, and that the median existing SF home sales price was $220,600, up 5.2% from a year ago. This YOY increase was higher than my projection based on regional tracking.
In what I thought was a “strange” press release, the NAR attributed the drop in sales last month to a retreat from the market by “investors paying in cash.” This attribution was based on the results of the NAR’s monthly survey of a relatively small number (in terms of respondents1) of realtors, who are asked about the characteristics of the buyer for the realtor’s last transaction in a month. The results of this survey often do not match trends in the market as a whole. Here are some selected results of the August survey compared to the July survey and last August’s survey.
| Share of Existing Home Sales based on NAR Survey of Realtors* | |||
|---|---|---|---|
| Aug-14 | Jul-14 | Aug-13 | |
| All Cash | 23% | 29% | 32% |
| "Individual" Investor | 12% | 16% | 17% |
| First-Time Home Buyer | 29% | 29% | 28% |
| Foreclosure | 6% | 6% | 8% |
| Short Sales | 2% | 3% | 4% |
| *Based on last transaction in month | |||
In the first quarter of 2014 the NAR survey suggested that the all-cash share of home sales was noticeably higher than in the first quarter of 2013, even though other reports (based on property records) and local realtor/MLS reports suggested otherwise. While these other reports do suggest that the all-cash share of sales over the last few months is down significantly from a year ago, they don’t suggest that the all-cash share plunged in August relative to July (first table below). The survey’s distressed-sales share also looks way too low (second table below).
| All-Cash Share | Monthly Change | ||
|---|---|---|---|
| Aug-14 | Jul-14 | ||
| Las Vegas | 32.1% | 35.6% | -3.5% |
| Phoenix | 25.2% | 24.8% | 0.4% |
| Sacramento | 20.2% | 20.9% | -0.7% |
| Mid-Atlantic (MRIS) | 17.5% | 17.1% | 0.4% |
| Orlando | 42.1% | 39.6% | 2.5% |
| Bay Area CA* | 21.8% | 20.2% | 1.6% |
| So. California* | 24.4% | 24.5% | -0.1% |
| Florida SF | 38.7% | 37.7% | 1.0% |
| Florida C/TH | 64.7% | 64.3% | 0.4% |
| Toledo | 32.2% | 32.9% | -0.7% |
| Wichita | 25.7% | 28.0% | -2.3% |
| Des Moines | 16.0% | 15.1% | 0.9% |
| Peoria | 21.3% | 18.4% | 2.9% |
| Tucson | 26.0% | 26.2% | -0.2% |
| Omaha | 18.3% | 17.0% | 1.3% |
| Georgia*** | 26.8% | 24.1% | 2.7% |
| NAR Survey | 23.0% | 29.0% | -6.0% |
| Short Sales Share | Foreclosure Sales Share | Total "Distressed" Share | All Cash Share | |||||
|---|---|---|---|---|---|---|---|---|
| Aug-14 | Aug-13 | Aug-14 | Aug-13 | Aug-14 | Aug-13 | Aug-14 | Aug-13 | |
| Las Vegas | 11.5% | 25.0% | 8.9% | 8.0% | 20.4% | 33.0% | 32.1% | 52.5% |
| Reno** | 8.0% | 21.0% | 4.0% | 5.0% | 12.0% | 26.0% | ||
| Phoenix | 3.6% | 10.3% | 6.6% | 8.9% | 10.3% | 19.3% | 25.2% | 34.1% |
| Sacramento | 5.4% | 4.8% | 6.4% | 14.6% | 11.8% | 19.4% | 20.2% | 25.4% |
| Minneapolis | 2.5% | 5.5% | 8.1% | 15.2% | 10.6% | 20.7% | ||
| Mid-Atlantic | 4.1% | 7.6% | 8.9% | 7.0% | 13.0% | 14.6% | 17.5% | 17.5% |
| Orlando | 7.1% | 17.2% | 25.8% | 16.7% | 32.9% | 33.9% | 42.1% | 46.0% |
| California * | 6.0% | 11.4% | 5.4% | 7.8% | 11.4% | 19.2% | ||
| Bay Area CA* | 3.8% | 7.6% | 2.9% | 4.3% | 6.7% | 11.9% | 21.8% | 23.7% |
| So. California* | 5.9% | 11.5% | 5.0% | 7.0% | 10.9% | 18.5% | 24.4% | 28.4% |
| Florida SF | 6.1% | 12.4% | 21.2% | 17.2% | 27.3% | 29.6% | 38.7% | 41.4% |
| Florida C/TH | 4.3% | 9.9% | 19.2% | 15.5% | 23.5% | 25.4% | 64.7% | 67.9% |
| Hampton Roads | 18.6% | 21.0% | ||||||
| Northeast Florida | 33.3% | 36.7% | ||||||
| Toledo | 32.2% | 30.1% | ||||||
| Wichita | 25.7% | 28.1% | ||||||
| Des Moines | 16.0% | 16.6% | ||||||
| Peoria | 21.3% | 20.8% | ||||||
| Tucson | 26.0% | 33.4% | ||||||
| Omaha | 18.3% | 17.0% | ||||||
| Georgia*** | 26.8% | N/A | ||||||
| Memphis* | 11.7% | 16.5% | ||||||
| *share of existing home sales, based on property records **Single Family Only ***GAMLS | ||||||||
1 The NAR says that it sends the monthly survey to about 50,000 real estate practitioners. Response rates vary significantly, but typically the NAR gets a little over 3,000 usable responses a month. The August results were based on 3,360 usable responses.
DOT: Vehicle Miles Driven increased 1.5% year-over-year in July
by Calculated Risk on 9/22/2014 03:01:00 PM
The Department of Transportation (DOT) reported:
Travel on all roads and streets changed by 1.5% (4.0 billion vehicle miles) for July 2014 as compared with July 2013.The following graph shows the rolling 12 month total vehicle miles driven.
Travel for the month is estimated to be 266.8 billion vehicle miles.
Cumulative Travel for 2014 changed by 0.6% (10.1 billion vehicle miles).
The rolling 12 month total is still mostly moving sideways ...
Click on graph for larger image.In the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.
Currently miles driven has been below the previous peak for 80 months - almost 7 years - and still counting. Currently miles driven (rolling 12 months) are about 2.0% below the previous peak.
The second graph shows the year-over-year change from the same month in the previous year.
In July 2014, gasoline averaged of $3.75 per gallon according to the EIA. That was up from July 2013 when prices averaged $3.67 per gallon. Of course gasoline prices are just part of the story. The lack of growth in miles driven over the last 6+ years is probably also due to the lingering effects of the great recession (high unemployment rate and lack of wage growth), the aging of the overall population (over 55 drivers drive fewer miles) and changing driving habits of young drivers.
With all these factors, it might take a few more years before we see a new peak in miles driven - but it does seem like miles driven is now increasing slowly.
