by Calculated Risk on 3/11/2015 07:01:00 AM

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

Mortgage applications decreased 1.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 6, 2015. ...

The Refinance Index decreased 3 percent from the previous week to the lowest level since January 2015. The seasonally adjusted Purchase Index increased 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) increased to 4.01 percent, the highest level since the week ending January 2, 2015, from 3.96 percent, with points increasing to 0.39 from 0.30 (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.

2014 was the lowest year for refinance activity since year 2000.

2015 will probably see a little more refinance activity than in 2014, but not a large refinance boom.

The second graph shows the MBA mortgage purchase index.  

According to the MBA, the unadjusted purchase index is 2% higher than a year ago.

by Calculated Risk on 3/10/2015 07:39:00 PM

From Jon Hilsenrath at the WSJ: Fed Leans Toward Removing ‘Patient’ Promise on Rates

The Federal Reserve is strongly considering removing a barrier to raising short-term interest rates, by dropping its promise to be “patient” before acting.
...
Dropping the patience promise next week doesn’t mean officials are yet set on a rate increase in June. Ms. Yellen has signaled that the inflation backdrop is the key wildcard in the months ahead. Though the job market is improving as the Fed hoped, inflation isn’t moving back toward its 2% objective.

It seems very likely that "patient" will be removed from the statement. This will mean a June rate hike is possible, but not guaranteed.

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

• At 10:00 AM, the Q4 Quarterly Services Report from the Census Bureau.

• At 4:30 PM, the Federal Reserve will release the Comprehensive Capital Analysis and Review Results (Stress Test)

by Calculated Risk on 3/10/2015 04:45:00 PM

For the third consecutive month, inventory was down year-over-year in Phoenix.  This is a significant change.

This is a key distressed market to follow since Phoenix saw a large bubble / bust followed by strong investor buying.  These key markets hopefully show us changes in trends for sales and inventory.

The Arizona Regional Multiple Listing Service (ARMLS) reports (table below):

1) Overall sales in January were up 9.0% year-over-year.  Another change.

2) Cash Sales (frequently investors) were down about 8% to 29.9% of total sales. Non-cash sales were up 18.3% year-over-year.

3) Active inventory is now down 8.4% year-over-year.   Note: House prices bottomed in Phoenix in 2011 at about the current level of inventory.

More inventory (a theme in 2014) - and less investor buying - suggested price increases would slow sharply in 2014.  And prices increases did slow.

Now, with falling inventory, prices might increase a little faster in 2015 (something to watch if inventory continues to decline).

February Residential Sales and Inventory, Greater Phoenix Area, ARMLS
	Sales	YoY Change Sales	Cash Sales	Percent Cash	Active Inventory	YoY Change Inventory
Feb-2008	3,445	---	650	18.9%	57,3051	---
Feb-2009	5,477	59.0%	2,188	39.9%	52,013	-9.2%
Feb-2010	6,595	20.4%	2,997	45.4%	42,388	-18.5%
Feb-2011	7,171	8.7%	3,776	52.7%	40,666	-4.1%
Feb-2012	7,249	1.1%	3,616	49.9%	23,736	-41.6%
Feb-2013	6,618	-8.7%	3,053	46.1%	21,718	-8.5%
Feb-2014	5,476	-17.3%	1,939	35.4%	29,899	37.7%
Feb-2015	5,970	9.0%	1,784	29.9%	27,382	-8.4%
1 February 2008 probably included pending listings

by Calculated Risk on 3/10/2015 01:38:00 PM

In addition to Case-Shiller, and CoreLogic, I'm also watching the FNC, Zillow and several other house price indexes.

FNC released their January 2015 index data today.  FNC reported that their Residential Price Index™ (RPI) indicates that U.S. residential property values decreased 0.3% from December to January (Composite 100 index, not seasonally adjusted). 

The 10 city MSA, the 20-MSA and 30-MSA RPIs all decreased . These indexes are not seasonally adjusted (NSA), and are for non-distressed home sales (excluding foreclosure auction sales, REO sales, and short sales).

Notes: In addition to the composite indexes, FNC presents price indexes for 30 MSAs. FNC also provides seasonally adjusted data.

The year-over-year (YoY) change was lower in January than in December, with the 100-MSA composite up 4.3% compared to January 2014  (this index was up 5.0% year-over-year in December).   In general, for FNC, the YoY increase has been slowing since peaking in March at 9.0%.

The index is still down 19.8% from the peak in 2006.

Click on graph for larger image.

This graph shows the year-over-year change based on the FNC index (four composites) through January 2015. The FNC indexes are hedonic price indexes using a blend of sold homes and real-time appraisals.

Most of the price indexes have been showing a slowdown in price increases.

Note: The January Case-Shiller index will be released on Tuesday, Tuesday, March 31.

by Calculated Risk on 3/10/2015 11:24:00 AM

This is a key distressed market to follow since Las Vegas has seen the largest price decline of any of the Case-Shiller composite 20 cities.

The Greater Las Vegas Association of Realtors reported GLVAR report points to steady housing market, prices still up about 8 percent for year

According to GLVAR, the total number of existing local homes, condominiums and townhomes sold in February was 2,452, up from 2,239 in January, but down from 2,518 one year ago. At this sales pace, Lynam said Southern Nevada continues to have roughly a four-month supply of available homes, while a six-month supply is considered to be a balanced market.
...
GLVAR is tracking a two-year trend of fewer distressed sales and more traditional sales, where lenders are not controlling the transaction. In February, 9.3 percent of all local sales were short sales – which occur when lenders allow borrowers to sell a home for less than what they owe on the mortgage. That’s down from 9.7 percent in January and from 14 percent one year ago. Another 9.7 percent of February sales were bank-owned, up from 9.4 percent in January, but down from 12 percent last year.
...
The total number of single-family homes listed for sale on GLVAR’s Multiple Listing Service in February was 13,188, up 4.1 percent from 12,666 in January, but down 3.2 percent from one year ago. GLVAR tracked a total of 3,558 condos, high-rise condos and townhomes listed for sale on its MLS in February, up 3.8 percent from 3,429 in January, but down 0.1 percent from February 2014.

By the end of February, GLVAR reported 7,313 single-family homes listed without any sort of offer. That’s down 0.9 percent from January, but up 15.8 percent from one year ago. For condos and townhomes, the 2,425 properties listed without offers in February represented a 4.2 percent increase from January and a 9.6 percent increase from one year ago.
emphasis added

There are several key trends that we've been following:

1) Overall sales were down 2.6% year-over-year.

2) However conventional (equity, not distressed) sales were up 6.6% year-over-year.  In February 2014, only 74.0% of all sales were conventional equity.  In February 2015, 81.0% were standard equity sales.   Note: In February 2013 (two years ago), only 51.9% were equity!  A significant change.

3) The percent of cash sales has declined year-over-year from 46.8% in February 2014 to 37.4% in February 2015. (investor buying appears to be declining).

4) Non-contingent inventory is up 15.8% year-over-year. The table below shows the year-over-year change for non-contingent inventory in Las Vegas. Inventory declined sharply through early 2013, and then inventory started increasing sharply year-over-year. It appears the inventory build is slowing  - but still ongoing.

Las Vegas: Year-over-year Change in Non-contingent Inventory
Month	YoY
Jan-13	-58.3%
Feb-13	-53.4%
Mar-13	-42.1%
Apr-13	-24.1%
May-13	-13.2%
Jun-13	3.7%
Jul-13	9.0%
Aug-13	41.1%
Sep-13	60.5%
Oct-13	73.4%
Nov-13	77.4%
Dec-13	78.6%
Jan-14	96.2%
Feb-14	107.3%
Mar-14	127.9%
Apr-14	103.1%
May-14	100.6%
Jun-14	86.2%
Jul-14	55.2%
Aug-14	38.8%
Sep-14	29.5%
Oct-14	25.6%
Nov-14	20.0%
Dec-14	18.0%
Jan-15	12.9%
Feb-15	15.8%