RSS Feed by Calculated Risk on 8/16/2010 12:13:00 PM
Monday, August 16, 2010
CoreLogic: House Prices flat in June
Note: CoreLogic reports the year-over-year change. The headline for this post is for the change from May 2010 to June 2010.
From CoreLogic (formerly First American LoanPerformance): CoreLogic® Home Price Index Increases Decelerate in June
According to the CoreLogic HPI, national home prices, including distressed sales, increased by 1.4 percent in June 2010 compared to June 2009 and increased by 3.7 percent [revised] in May 2010 compared to May 2009. The June 2.3 percentage point deceleration from May is very large by historical standards. The deceleration was most pronounced in more expensive and distressed segments of the market. Excluding distressed sales, year-over-year prices only increased by 0.2 percent in June and May’s non-distressed HPI increased by 0.5 percent.”
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“Home price volatility and collateral risk remain very high. The stabilization phase and policy intervention since the spring of 2009 has run its course. Prices are expected to further moderately decline as the economy remains weak through the fall” said Mark Fleming, chief economist for CoreLogic.
Click on graph for larger image in new window. This graph shows the national LoanPerformance data since 1976. January 2000 = 100.
The index is up 1.4% over the last year, and off 28% from the peak.
CoreLogic expects prices to "moderately decline" (more negative view than last month). I expect that we will see lower prices on this index later this year and into 2011.
The second graph is an update on the price-to-rent ratio similar to the approach used by Fed economist John Krainer and researcher Chishen Wei in 2004: House Prices and Fundamental Value. Kainer and Wei presented a price-to-rent ratio using the OFHEO house price index and the Owners' Equivalent Rent (OER) from the BLS.This graph shows the price to rent ratio using the CoreLogic data (January 2000 = 1.0).
This suggests that house prices are much closer to the bottom than the top, but that prices still have a ways to fall on a national basis.
This data is for June and was still impacted by the tax credit. I've been expecting this index to start showing price declines in July as sales collapsed.
NAHB Builder Confidence falls in August to lowest since March 2009
by Calculated Risk on 8/16/2010 10:00:00 AM
The National Association of Home Builders (NAHB) reports the housing market index (HMI) was at 13 in August. This is down slightly from 14 in July and below expectations. The record low was 8 set in January 2009, and 13 is very low ...
Note: any number under 50 indicates that more builders view sales conditions as poor than good.
Click on graph for larger image in new window.
This graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the August release for the HMI and the June data for starts (July starts will be released tomorrow).
This shows that the HMI and single family starts mostly move generally in the same direction - although there is plenty of noise month-to-month.
Press release from the NAHB: Builder Confidence Declines In August
Builder confidence in the market for newly built, single-family homes edged down for a third consecutive month in August, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI declined one point to 13, its lowest level since March of 2009.
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“Today’s report reflects single-family home builders’ concerns about current and future economic conditions and about the increasing hesitancy they are seeing among potential home buyers,” added NAHB Chief Economist David Crowe. “It also reflects the frustration that builders are feeling regarding the effects that foreclosed property sales are having on the new-homes market, with 87 percent of respondents reporting that their market has been negatively impacted by foreclosures.”
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Two out of three of the HMI’s component indexes fell in August. The component gauging current sales conditions declined one point to 14, while the component gauging sales expectations for the next six months declined three points to 18. The component gauging traffic of prospective buyers held unchanged at 10.
NY Fed: Manufacturing Conditions improve "modestly" in August
by Calculated Risk on 8/16/2010 08:31:00 AM
From the NY Fed: Empire State Manufacturing Survey
The Empire State Manufacturing Survey indicates that conditions improved modestly in August for New York manufacturers. The general business conditions index rose 2 points from its July level, to 7.1.This was slightly below expectations. The decline in new orders is especially concerning.
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The new orders index fell below zero for the first time in over a year, dropping 13 points to -2.7—an indication that, on balance, manufacturers saw orders decline slightly.
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Employment indexes were positive and higher than in July, indicating that employment levels and the average workweek expanded in August. The index for number of employees had fallen in June and July, but climbed 6 points, to 14.3, this month.
Sunday, August 15, 2010
Weak economy and low yields are threat to retirement
by Calculated Risk on 8/15/2010 10:43:00 PM
Here is the summary of last week.
Here is the schedule for this week.
Is the economy threatening retirement plans, or is less spending from those saving for retirement threatening the economy? Probably both ...
This article from the WSJ takes the 2nd view: Another Threat to Economy: Boomers Cutting Back
Low yields present retirees with a difficult choice: Accept the lower income offered by safer bonds, or take the risk of staying in the stock market. Either way, their predicament could put a long-term damper on the consumer spending that typically drives U.S. growth.And the job market is tough for older workers too ...
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As of 2008, the latest data available, people aged 65 to 74 were spending 12.3% less than they did ten years earlier, in inflation-adjusted terms.
Merle Hazard: Double Dippin'
by Calculated Risk on 8/15/2010 06:41:00 PM
Here is the summary of last week.
Here is the schedule for this week.
And some timely thread music ... a new song from Merle Hazard:
Weekly Schedule for August 15th
by Calculated Risk on 8/15/2010 03:20:00 PM
Note: Earlier I posted the summary of last week. I'm going to split the summary and schedule into two posts because it was getting too long!
Two key housing reports will be released this week: July housing starts (Tuesday) and August homebuilder confidence (Monday). Also the Fed will release July industrial production and capacity utilization (Tuesday).
8:30 AM ET: Empire State Manufacturing Survey (August). This index fell sharply over the last few months, although it still showed expansion. The consensus is for a slight increase in August to 8.0 from 5.1 in July.
10 AM: The August NAHB homebuilder survey. This index has collapsed since the expiration of the home buyer tax credit. The consensus is for a slight increase to 15 from 14 in July (still very depressed).
8:30 AM: Housing Starts for July. Housing starts collapsed in June following the expiration of the tax credit. The consensus is for a slight increase to 565K (SAAR) in July from 549K in June.
8:30 AM: Producer Price Index for July. The consensus is for a 0.2% increase, and +0.1% for core PPI.
9:15 AM: The Fed will release Industrial Production and Capacity Utilization for July. The consensus is for a 0.5% increase in Industrial Production, and an increase to 74.5% (from 74.1%) for Capacity Utilization.
9:00 AM to 1:30 PM: Conference on the Future of Housing Finance. According to the agenda: "This event will provide a forum for public input as the Administration continues its work developing a comprehensive housing finance reform proposal for delivery to Congress by January 2011."
12:30 PM: Minneapolis Fed President Narayana Kocherlakota speaks about the FOMC at Northern University of Michigan.
Note: The Q2 Quarterly Starts and Completions by Purpose and Design will also be released
Early: The AIA's Architecture Billings Index for July will be released (a leading indicator for commercial real estate). This has been showing ongoing contraction, and usually this leads investment in non-residential structures (hotels, malls, office) by 9 to 12 months.
7:00 AM: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index. This index declined sharply following the expiration of the tax credit, and the index has only recovered slightly over the last few weeks - suggesting reported home sales in July and August will be very weak.
8:30 AM: The initial weekly unemployment claims report will be released. Consensus is for a slight decrease to 480K from 484K last week. If so, this will push the 4-week average to the highest level this year.
10:00 AM: Conference Board's index of leading indicators for July. The consensus is for a 0.1% increase in this index.
10:00 AM: Philly Fed Survey for August. This survey declined sharply over the last two months, although was still showing expansion (at a slower pace). The consensus is for a slight increase to 7.0 from 5.1 in July (still expanding, but slowly).
Lunch: St Louis Federal President James Bullard speaks on the economic outlook, and Chicago Fed President Charles Evans speaks to reporters.
10:00 AM: the BLS will release the Regional and State Employment and Unemployment report for June.
After 4:00 PM: The FDIC will probably have another busy Friday afternoon ...
Making Home Affordable Program (HAMP) for July and the “Housing Scorecard”
CoreLogic House Price Index for June.
Moodys/REAL Commercial Property Price Index (CPPI) for June.
