by Calculated Risk on 12/09/2014 12:41:00 PM

From Trulia chief economist Jed Kolko: Housing’s Millennial Mismatch

Nationwide, asking prices on for-sale homes jumped 1.5% month-over-month in November, seasonally adjusted — a surprisingly large increase. Future months will tell whether this was a blip or the beginning of a sustained climb. Year-over-year, asking prices rose 7.4%, down from the 10.3% year-over-year increase in November 2013. Asking prices rose year-over-year in 98 of the 100 largest U.S. metros — everywhere but Little Rock and New Haven.

Four of the 10 metros where asking prices rose most year-over-year were in Florida. These Sunshine State markets have older populations, and they all have a lower share of millennials than the national average of 21% and a higher share of baby boomers than the average of 24%. In fact, only one of the 10 markets with the largest price increases in November has a higher share of millennials than the national average—and only slightly (Las Vegas, at 22%).

Rents continued to climb. Nationwide, rents rose 6.1% year-over-year in November. Still, rent gains have cooled since August in 14 of the 25 largest rental markets, including the Northern California markets of San Francisco, Oakland, and Sacramento.
emphasis added

Note: These asking prices are SA (Seasonally Adjusted) - and adjusted for the mix of homes - and although year-over-year price increases had been slowing, the year-over-year change increased in November.

The month-to-month increase suggests further house price increases over the next few months on a seasonally adjusted basis.

There is much more in the article.

by Calculated Risk on 12/09/2014 10:00:00 AM

From the BLS: Job Openings and Labor Turnover Summary

There were 4.8 million job openings on the last business day of October, little changed from 4.7 million in September, the U.S. Bureau of Labor Statistics reported today. ...
...
Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. ... The number of quits was unchanged at 2.7 million in October, maintaining the prior month’s increase.

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

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for October, the most recent employment report was for November.

Click on graph for larger image.


Note that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

Jobs openings increased in October to 4.834 million from 4.685 million in September.

The number of job openings (yellow) are up 21% year-over-year compared to October 2013.

Quits are up 12% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits").

This is a very positive report.  It is a good sign that job openings are over 4 million for the ninth consecutive month (almost to 5 million), and that quits are increasing year-over-year.

by Calculated Risk on 12/09/2014 08:15:00 AM

From the National Federation of Independent Business (NFIB): Small Business Optimism Perks Up in December

The NFIB Small Business Optimism Index jumped up 2.0 points to 98.1, just a tick lower than its historical average before the Great Recession. ...

Fifty-seven percent reported outlays, 1 point better than October. The percent of owners planning capital outlays in the next 3 to 6 months fell 1 point to 25, a strong reading ...
emphasis added

And in another positive sign, the percent of firms reporting "poor sales" as the single most important problem has fallen to 12, down from 15 last year - and "taxes" at 23 and "regulations" at 22 are the top problems (taxes are usually reported as the top problem during good times - there always has to be a "top problem"!).

Click on graph for larger image.

This graph shows the small business optimism index since 1986.

The index increased to 98.1 in November from 96.1 in October.

by Calculated Risk on 12/08/2014 06:37:00 PM

From Jon Hilsenrath at the WSJ: Fed Aims to Signal Shift on Low Rates

Federal Reserve officials are seriously considering an important shift in tone at their policy meeting next week: dropping an assurance that short-term interest rates will stay near zero for a “considerable time” as they look more confidently toward rate increases around the middle of next year.

Senior officials have hinted lately that they’re looking at dropping this closely watched interest-rate signal, which many market participants take as a sign rates won’t go up for at least six months.

The FOMC statement (and press conference) will be released next week, Wednesday, December 17th.

Tuesday:
• At 7:30 AM ET, NFIB Small Business Optimism Index for November.

• At 10:00 AM, Job Openings and Labor Turnover Survey for October from the BLS. Jobs openings decreased in September to 4.735 million from 4.853 million in August. The number of job openings (yellow) were up 20% year-over-year compared to September 2013, and Quits were up 16% year-over-year.

• Also at 10:00 AM, Monthly Wholesale Trade: Sales and Inventories for October. The consensus is for a 0.2% increase in inventories.

•During the day: Trulia Price Rent Monitors for November. This is the index from Trulia that uses asking house prices adjusted both for the mix of homes listed for sale and for seasonal factors.

by Calculated Risk on 12/08/2014 04:06:00 PM

FNC released an interesting report today: Larger Homes Show Faster Appreciation than Smaller Homes Over the Past Decade

According to FNC, in 2004, about half of existing home sales were homes held 5 years of less. In 2014, only about one-fourth of home sales were held 5 years or less.

And in 2004, just 10% of home sales were held for more than 15 years. In 2014, that has doubled (more long term owners are selling now).

From FNC on the composition of existing home sales:

• A 10-year comparison of ownership duration on existing-home sales reveals a significant decline in the turnovers of homes held for short periods.

• 2004: 11.9% held for 18 months or less & 18.1% between 18-36 months
• 2014: 5.8% held for 18 months or less & 7.6% between 18-36 months

• Rising share of homes held for longer periods:

• 2004: 5.7% for 12-15 years & 10.0% above 15 years
• 2014: 9.6% for 12-15 years & 19.3% above 15 years

• Median ownership duration currently stands at eight years, double the number from the pre-2009 periods.

Click on graph for larger image.

This graph from FNC shows existing home sales by duration of ownership for 2004 and 2014.

Fewer flippers - and more long term owners selling.