by Calculated Risk on 3/07/2012 08:56:00 AM

Notes: This CoreLogic House Price Index report is for January. The Case-Shiller index released last week was for December. Case-Shiller is currently the most followed house price index, however CoreLogic is used by the Federal Reserve and is followed by many analysts. The CoreLogic HPI is a three month weighted average of the last three months and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic® January Home Price Index Shows Sixth Consecutive Monthly Decline

[CoreLogic January Home Price Index (HPI®) report] shows national home prices, including distressed sales, declined on a year-over-year basis by 3.1 percent in January 2012 and by 1.0 percent compared to December 2011, the sixth consecutive monthly decline.

Excluding distressed sales, year-over-year prices declined by 0.9 percent in January 2012 compared to January 2011, but that same metric posted a month-over-month gain, rising 0.7 percent in January. Distressed sales include short sales and real estate owned (REO) transactions.

“Although home price declines are slowly improving and not far from the bottom, home prices are down to nearly the same levels as 10 years ago,” said Mark Fleming, chief economist for CoreLogic.

Click on graph for larger image.

This graph shows the national CoreLogic HPI data since 1976. January 2000 = 100.

The index was down 1.0% in January, and is down 3.1% over the last year.

The index is off 34% from the peak - and is now at a new post-bubble low.

The second graph is from CoreLogic. As Mark Fleming noted, the year-over-year declines are getting smaller.

Some of this decline was seasonal (the CoreLogic index is NSA) and month-to-month price changes will probably remain negative through March 2012. Last year prices fell about 2.5% from January 2011 to March 2011, and there will probably be a similar decline this year.

by Calculated Risk on 3/07/2012 08:15:00 AM

ADP reports:

Employment in the U.S. nonfarm private business sector increased by 216,000 from January to February on a seasonally adjusted basis. The estimated advance in employment from December to January was revised slightly upwards to 173,000 from the initially reported 170,000.

Employment in the private, service-providing sector rose 170,000 in February, and employment in the private, goods-producing sector increased 46,000 in February. Manufacturing employment increased 21,000.

This was slightly above the consensus forecast of an increase of 200,000 private sector jobs in February. The BLS reports on Friday, and the consensus is for an increase of 204,000 payroll jobs in February, on a seasonally adjusted (SA) basis.

Government payrolls have been shrinking, so the ADP report suggests close to 200,000 nonfarm payroll jobs added in January. Note: ADP hasn't been very useful in predicting the BLS report.

by Calculated Risk on 3/06/2012 10:12:00 PM

Jon Lansner at the O.C. Register has some comments from Orange County broker Steve Thomas on inventory: Fewest O.C. homes for sale since 2005

"Turn back the clocks to August 2005 to find a lower inventory. At the very beginning of the year, the active listing inventory stood at 8,114 homes. It was a good beginning compared to 2011 with nearly 1,900 fewer listings on the market. There was a subtle sense that something was different right after bringing in the New Year. Since then, the market has shed 925 homes and now stands at 7,189, 33% fewer than last year. To shed homes during this time of year is totally unprecedented during this downturn. It is much more of what we would see during a hot, appreciating market, reminiscent of 2004 and 2005. ATTENTION SELLERS: that does NOT mean that we are looking at 2004 and 2005 all over again. Let’s be perfectly clear, there is still an enormous back log of distressed homes that have not yet hit the market."

The sharp decline in inventory is happening just about everywhere. Some of this is because there are fewer foreclosures listed for sale, and some is probably because many potential sellers are "waiting for a better market".

Last month I posted a few reasons for the decline: Comments on Existing Home Inventory. I concluded: "The bottom line is the decline in listed inventory is a big deal, and will lead to less downward pressure on prices. Just like last year, inventory will be something to watch closely all year."

by Calculated Risk on 3/06/2012 07:12:00 PM

With questions about the impact of oil prices on the economy, I always pay close attention to Professor Hamilton at Econbrowser ...

From Jim Hamilton: Oil prices and the U.S. economy

Although the prices of oil and gasoline have risen significantly from their values in October, they are still not back to the levels we saw last spring or in the summer of 2008. There is a good deal of statistical evidence ... that an oil price increase that does no more than reverse an earlier decline has a much more limited effect on the economy than if the price of oil surges to a new all-time high.

One reason for this is that much of the impact on the economy of an increase in oil prices comes from abrupt changes in the patterns of consumer spending. ... ut if consumers have recently seen even higher prices than they're paying at the moment, their spending plans and firms' production plans are likely already to have incorporated that reality.

... based on what has happened to oil prices so far, I find myself in the unusual position of being less concerned about the impact of oil prices on the U.S. economy than many other analysts.

by Calculated Risk on 3/06/2012 03:05:00 PM

From HUD: FHA ANNOUNCES PRICE CUTS TO ENCOURAGE STREAMLINE REFINANCING

Today, Acting Federal Housing (FHA) Commissioner Carol Galante announced significant price cuts to FHA’s Streamline Refinance Program that could benefit millions of borrowers whose mortgages are currently insured by FHA. Beginning June 11, 2012, FHA will lower its Upfront Mortgage Insurance Premium (UFMIP) to just .01 percent and reduce its annual premium to .55 percent for certain FHA borrowers.

To qualify, borrowers must be current on their existing FHA-insured mortgages which were endorsed on or before May 31, 2009. Late last month, FHA also announced it will increase its upfront premiums on most other loans by 75 basis points to 1.75 percent. In addition, FHA will raise annual premiums 10 basis points and 35 basis points on mortgages higher than $625,500.
...
Currently, 3.4 million households with loans endorsed on or before May 31, 2009, pay more than a five percent annual interest rate on their FHA-insured mortgages. By refinancing through this streamlined process, it’s estimated that the average qualified FHA-insured borrower will save approximately $3,000 a year or $250 per month. FHA’s new discounted prices assume no greater risk to its Mutual Mortgage Insurance (MMI) Fund and will allow many of these borrowers to refinance into a lower cost FHA-insured mortgage without requiring additional underwriting.

A comment from mortgage broker Soylent Green is People:

Lenders were limited to refinancing only when a “benefit to borrower” existed. It was a pretty high wall to climb to make deals work. For example, a person with a 4.5% loan couldn’t refinance to 3.75% because the Mortgage Insurance was going to more than double. Now, with a .55 Mortgage Insurance limit, the refinance deals will really start to explode.

The down side is anyone after June 2009 is screwed. If you closed July 2009 to present day, any refinance they want to transact will have mortgage insurance RISE from 1.15 to 1.25!

Can’t wait to see everything in writing.