RSS Feed by Calculated Risk on 8/26/2015 06:01:00 PM
Wednesday, August 26, 2015
Last Week: Key Measures Show Low Inflation in July
While I was on vacation, there were several key economic releases. Here is the CPI release ...
Last week the Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:
ccording to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (1.8% annualized rate) in July. The 16% trimmed-mean Consumer Price Index also rose 0.2% (1.9% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report.Note: The Cleveland Fed has the median CPI details for July here. Motor fuel was down sharply in July.
[Last week], the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.1% (1.6% annualized rate) in July. The CPI less food and energy also rose 0.1% (1.6% annualized rate) on a seasonally adjusted basis.
Click on graph for larger image.This graph shows the year-over-year change for these four key measures of inflation. On a year-over-year basis, the median CPI rose 2.3%, the trimmed-mean CPI rose 1.7%, and the CPI less food and energy rose 1.8%. Core PCE is for June and increased 1.3% year-over-year.
On a monthly basis, median CPI was at 1.8% annualized, trimmed-mean CPI was at 1.9% annualized, and core CPI was at 1.6% annualized.
On a year-over-year basis these measures suggest inflation remains below the Fed's target of 2% (median CPI is above 2%).
Inflation is still low.
Lawler: Updated Table of Distressed Sales and Cash buyers for Selected Cities in July
by Calculated Risk on 8/26/2015 03:01:00 PM
Economist Tom Lawler sent me an updated table below of short sales, foreclosures and cash buyers for selected cities in July.
On distressed: Total "distressed" share is down in most of these markets. Distressed sales are up in the Mid-Atlantic due to an increase in foreclosures.
Short sales are down in all of these areas.
The All Cash Share (last two columns) is declining year-over-year. As investors pull back, the share of all cash buyers will probably continue to decline.
| Short Sales Share | Foreclosure Sales Share | Total "Distressed" Share | All Cash Share | |||||
|---|---|---|---|---|---|---|---|---|
| Jul- 2015 | Jul- 2014 | Jul- 2015 | Jul- 2014 | Jul- 2015 | Jul- 2014 | Jul- 2015 | Jul- 2014 | |
| Las Vegas | 7.0% | 11.5% | 7.7% | 9.1% | 14.7% | 20.6% | 27.1% | 35.6% |
| Reno** | 3.0% | 4.0% | 2.0% | 8.0% | 5.0% | 12.0% | ||
| Phoenix | 2.8% | 3.7% | 3.5% | 5.9% | 6.3% | 9.6% | 23.4% | 24.8% |
| Sacramento | 4.7% | 5.7% | 4.6% | 6.3% | 9.3% | 12.1% | 18.1% | 20.9% |
| Minneapolis | 1.9% | 3.1% | 5.4% | 9.3% | 7.3% | 12.4% | ||
| Mid-Atlantic | 3.4% | 4.3% | 9.4% | 7.7% | 12.8% | 12.1% | 15.8% | 17.1% |
| Orlando | 3.7% | 8.3% | 20.1% | 24.4% | 23.8% | 32.7% | 34.5% | 39.3% |
| Bay Area CA* | 2.4% | 2.8% | 2.4% | 2.6% | 4.8% | 5.4% | 20.1% | 20.7% |
| So. California* | 3.2% | 4.3% | 3.9% | 4.6% | 7.1% | 8.9% | 21.7% | 25.1% |
| Florida SF | 3.3% | 5.9% | 16.3% | 20.7% | 19.6% | 26.6% | 32.8% | 37.7% |
| Florida C/TH | 2.4% | 19.1% | 15.2% | 19.1% | 17.6% | 38.1% | 59.2% | 64.3% |
| Chicago (city) | 13.5% | 17.7% | ||||||
| Hampton Roads | 15.1% | 17.2% | ||||||
| Spokane | 9.0% | 12.2% | ||||||
| Northeast Florida | 26.4% | 31.0% | ||||||
| Toledo | 27.0% | 32.9% | ||||||
| Tucson | 23.7% | 26.2% | ||||||
| Peoria | 15.6% | 18.4% | ||||||
| Georgia*** | 20.3% | 24.1% | ||||||
| Omaha | 13.9% | 17.0% | ||||||
| Knoxville | 21.8% | 25.5% | ||||||
| Richmond VA MSA | 8.4% | 12.1% | 18.1% | 18.4% | ||||
| Memphis | 12.6% | 13.3% | ||||||
| Springfield IL** | 5.6% | 7.2% | ||||||
| *share of existing home sales, based on property records **Single Family Only ***GAMLS | ||||||||
Zillow Forecast: Expect Case-Shiller to show "Uptick in Appreciation" year-over-year change in July
by Calculated Risk on 8/26/2015 11:59:00 AM
The Case-Shiller house price indexes for June were released yesterday. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close.
From Zillow: July Case-Shiller: Expect a Slight Uptick in Appreciation
The June S&P/Case-Shiller (SPCS) data published today showed home prices continuing to rise at an annual rate of five percent for the 20-city composite and 4.6 percent for the 10-city composite. The national index has risen 4.5 percent since June 2014.This suggests the year-over-year change for the July Case-Shiller National index will be slightly higher than in the June report.
The non-seasonally adjusted (NSA) 10- and 20-city indices were both down 0.1 percent from May to June. We expect the change in the July SPCS to show increases of 0.8 percent for the 20-city index and 0.7 percent for the 10-City Index.
All Case-Shiller forecasts are shown in the table below. These forecasts are based on today’s June SPCS data release and the July 2015 Zillow Home Value Index (ZHVI), release August 24. The SPCS Composite Home Price Indices for July will not be officially released until Tuesday, September 28.
| Zillow Case-Shiller Forecast | ||||||
|---|---|---|---|---|---|---|
| Case-Shiller Composite 10 | Case-Shiller Composite 20 | Case-Shiller National | ||||
| NSA | SA | NSA | SA | NSA | SA | |
| June Actual YoY | 4.6% | 4.6% | 5.0% | 5.0% | 4.5% | 4.5% |
| July Forecast YoY | 4.8% | 4.8% | 5.2% | 5.2% | 4.6% | 4.6% |
| July Forecast MoM | 0.7% | 0.1% | 0.8% | 0.1% | 0.7% | 0.3% |
AIA: Architecture Billings Index indicated expansion in July
by Calculated Risk on 8/26/2015 09:31:00 AM
This was released last week while I was on vacation.
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: Architecture Firm Billings Continued to Rise in July
Business conditions at U.S. architecture firms continued to improve in July. While the pace of growth of architecture firm billings decreased modestly from June, the ABI score of 54.7 for the month indicates that firm billings remain on the upswing overall. In addition, there continues to be plenty of work in the pipeline, with firms reporting strong inquiries into new projects as well as the highest design contracts score since the end of 2014.
...
By firm specialization, firms with an institutional focus are still reporting some of the strongest business conditions they have ever experienced, and firms with a commercial/industrial specialization continue to recover from some softness earlier in the year. In addition, firms with a residential specialization are coming close to emerging from the slump that they have experienced for the last six months, which came on the heels of several years of strong growth. Scores for this segment have been ticking up for the last two months and will hopefully return to positive territory before the end of the summer.
...
Sector index breakdown: institutional (57.3), commercial / industrial (53.4) multi-family residential (49.8)
emphasis added
Click on graph for larger image.This graph shows the Architecture Billings Index since 1996. The index was at 54.7 in July, down from 55.7 in June. Anything above 50 indicates expansion in demand for architects' services.
Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions. The multi-family residential market was negative for the sixth consecutive month - and this might be indicating a slowdown for apartments - or at least less growth.
According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. This index was positive in 10 of the last 12 months, suggesting a further increase in CRE investment over the next 12 months.
MBA: Mortgage Applications Increase Slightly in Latest Weekly Survey, Purchase Index up 18% YoY
by Calculated Risk on 8/26/2015 07:00:00 AM
From the MBA: Increase in Government Purchase Loans Drive Overall 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 21, 2015. ...
The Refinance Index decreased 1 percent from the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index decreased 0.3 percent compared with the previous week and was 18 percent higher than the same week one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.08 percent from 4.11 percent, with points decreasing to 0.36 from 0.37 (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.
Refinance activity remains very low.
2014 was the lowest year for refinance activity since year 2000, and refinance activity will probably stay low for the rest of 2015 (after the increase earlier this year).
The second graph shows the MBA mortgage purchase index. According to the MBA, the unadjusted purchase index is 18% higher than a year ago.
