by Calculated Risk on 3/24/2015 10:05:00 AM

The Census Bureau reports New Home Sales in February were at a seasonally adjusted annual rate (SAAR) of 539 thousand.

January sales were revised up from 481 thousand to 500 thousand, and December sales were revised down slightly from 482 thousand to 479 thousand.

"Sales of new single-family houses in February 2015 were at a seasonally adjusted annual rate of 539,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.8 percent above the revised January rate of 500,000 and is 24.8 percent above the February 2014 estimate of 432,000."

Click on graph for larger image.

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

Even with the increase in sales over the previous two years, new home sales are still close to the bottoms for previous recessions.

The second graph shows New Home Months of Supply.

The months of supply was declined in February at 4.7 months.

The all time record was 12.1 months of supply in January 2009.

This is now in the normal range (less than 6 months supply is normal).

"The seasonally adjusted estimate of new houses for sale at the end of February was 210,000. This represents a supply of 4.7 months at the current sales rate."

On inventory, according to the Census Bureau:

"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."

Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed.

The third graph shows the three categories of inventory starting in 1973.

The inventory of completed homes for sale is still low, and the combined total of completed and under construction is also low.

The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).

In February 2015 (red column), 44 thousand new homes were sold (NSA). Last year 35 thousand homes were sold in February.  This is the highest for February since 2008.

The high for February was 109 thousand in 2005, and the low for February was 22 thousand in 2011.

This was way above expectations of 475,000 sales in February, and is a strong start to 2015.  I'll have more later today.

by Calculated Risk on 3/24/2015 08:31:00 AM

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in February on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index was unchanged before seasonal adjustment.

The seasonally adjusted increase in the all items index was broad-based, with increases in shelter, energy, and food indexes all contributing. The energy index rose after a long series of declines, increasing 1.0 percent as the gasoline index turned up after falling in recent months. The food index, unchanged last month, also rose in February, though major grocery store food group indexes were mixed.

The index for all items less food and energy rose 0.2 percent in February, the same increase as in January.
emphasis added

I'll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI. This was at the consensus forecast of a 0.2% increase for CPI, and above the forecast of a 0.1% increase in core CPI.

by Calculated Risk on 3/23/2015 07:54:00 PM

With oil and gasoline prices up a little in February compared to January, CPI will probably show a positive monthly change for the first time since October. The CPI might still be down year-over-year - or close to unchanged.

As an example, WTI oil averaged $47.22 per barrel in January and increased to $50.58 in February. However oil and gasoline prices have declined again in March - WTI was at $47.42 today - and will push down inflation again in March.

Tuesday:
• 8:30 AM ET, the Consumer Price Index for February. The consensus is for a 0.2% increase in CPI, and for core CPI to increase 0.1%.

• At 9:00 AM, the FHFA House Price Index for January 2015. This was originally a GSE only repeat sales, however there is also an expanded index.

• At 10:00 AM, New Home Sales for February from the Census Bureau. The consensus is for a decrease in sales to 475 thousand Seasonally Adjusted Annual Rate (SAAR) in February from 481 thousand in January.

• Also at 10:00 AM, the Richmond Fed Survey of Manufacturing Activity for March.

by Calculated Risk on 3/23/2015 04:52:00 PM

From housing economist Tom Lawler:

Below is a table showing net home orders for the quarter ended February 28 of 2015 compared to the comparable quarter of the previous two years.

At least for these three builders, the beginning of this year’s “spring” (a misnomer) home selling season looks materially better than last year’s disappointing season.

Net Home Orders, Quarter Ending February 28				YOY % Change
	2015	2014	2013	2015	2014
Lennar Corp.	5,287	4,465	4,055	18.4%	10.1%
KB Home	2,189	1,765	1,671	24.0%	5.6%
Hovnanian Ent.	1,514	1,402	1,581	8.0%	-11.3%
Total	8,990	7,632	7,307	17.8%	4.4%

by Calculated Risk on 3/23/2015 03:55:00 PM

From the Philly Fed:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for January 2015. In the past month, the indexes increased in 46 states, decreased in two, and remained stable in two, for a one-month diffusion index of 88. Over the past three months, the indexes increased in 48 states and decreased in two, for a three-month diffusion index of 92.

Note: These are coincident indexes constructed from state employment data. An explanation from the Philly Fed:

The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.

Click on graph for larger image.

This is a graph is of the number of states with one month increasing activity according to the Philly Fed. This graph includes states with minor increases (the Philly Fed lists as unchanged).

In January, 47 states had increasing activity (including minor increases). This measure has been moving up and down, and is in the normal range for a recovery.


Here is a map of the three month change in the Philly Fed state coincident indicators. This map was all red during the worst of the recession, and is almost all green again.

It seems likely that several oil producing states will turn red sometime in 2015 - possibly Texas, North Dakota, Alaska or Oklahoma.