by Calculated Risk on 6/27/2012 10:04:00 AM

From the NAR: Pending Home Sales Up in May, Continue Pattern of Strong Annual Gains

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 5.9 percent to 101.1 in May from 95.5 in April and is 13.3 percent above May 2011 when it was 89.2. The data reflect contracts but not closings.

The index also reached 101.1 in March, which is the highest level since April 2010 when buyers were rushing to beat the deadline for the home buyer tax credit.

The PHSI in the Northeast increased 4.8 percent to 82.9 in May and is 19.8 percent above May 2011. In the Midwest the index rose 6.3 percent to 98.9 in May and is 22.1 percent higher than a year ago. Pending home sales in the South increased 1.1 percent to an index of 106.9 in May and are 11.9 percent above May 2011. In the West the index jumped 14.5 percent in May to 108.7 and is 4.8 percent stronger than a year ago.

This was above the consensus of a 1.2% increase for this index.

Contract signings usually lead sales by about 45 to 60 days, so this is for sales in June and July.

by Calculated Risk on 6/27/2012 07:05:00 AM

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

The Refinance Index decreased 8 percent from the previous week. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier.

“Refinance volume fell last week due largely to a fall-off in refinance applications for government loans, which had more than doubled the prior week,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “The large swings in activity were due to the implementation of FHA’s new premiums on streamline refinances, and borrowers timing their applications to lower their premiums.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.88 percent from 3.87 percent, with points decreasing to 0.40 from 0.49 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Click on graph for larger image.

The purchase index is mostly moving sideways.

Refinance activity has been increasing, and the decline this week followed the surge in FHA streamline refinancing last week. With mortgage rates near record lows, refinance activity will probably stay fairly strong.

by Calculated Risk on 6/26/2012 09:25:00 PM

The two day European summit starts on Thursday, and there will be more pre-meeting position statements tomorrow. Here was some "positioning" today:

From Reuters: Merkel buries euro bonds as summit tension rises

Two days before a crucial European Union summit, European Council President Herman Van Rompuy released a seven-page report on closer fiscal and banking union envisaging a euro zone treasury that would issue common debt in the medium term.

Merkel immediately stamped on the idea of mutualising debt - favored by France, Italy and Spain - at a meeting of lawmakers from her Free Democratic coalition partners in Berlin, according to people who attended the closed-door session.

"I don't see total debt liability as long as I live," she was quoted as saying, a day after branding the idea of euro bonds "economically wrong and counterproductive".

From the Financial Times: Monti lashes out at Germany ahead of summit

Mario Monti has set the stage for a tough fight with Germany at the EU summit this week, insisting that he will continue to push Italy’s proposal to use eurozone bailout funds in an attempt to stabilise financial markets.
Excerpt with permission

I don't expect much from this summit except an extension for Greece. I'm keeping an eye on Europe, but not watching too closely!

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

• At 8:30 AM, Durable Goods Orders for May will be released by the Census Bureau. The consensus is for a 0.4% increase in durable goods orders.

• Also at 10:00 AM, the NAR will released the Pending Home Sales Index for May. The consensus is for a 1.2% increase in the index.

Earlier on house prices:
• Case Shiller: House Prices increased in April
• Real House Prices and Price-to-Rent Ratio
• House Prices to increase 10%?
• All Current House Price Graphs

by Calculated Risk on 6/26/2012 05:54:00 PM

Some earlier releases ...

From the Richmond Fed: Manufacturing Activity Eased in June, But Expectations Remained Upbeat

Manufacturing activity in the central Atlantic region softened in June, following six months of moderate expansion, according to the Richmond Fed's latest survey.

In June, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — lost seven points to −3 from May's reading of 4. Among the index's components, shipments declined two points to −2, new orders dropped thirteen points to end at −12, and the jobs index moved down eight points to 8.

Three out of four regional manufacturing surveys have been below expectations in June.

And from the Conference Board: The Conference Board Consumer Confidence Index® Declines Again

The Conference Board Consumer Confidence Index®, which had declined in May, fell further in June. The Index now stands at 62.0 (1985=100), down from 64.4 in May. The Expectations Index declined to 72.3 from 77.3. The Present Situation Index, however, increased to 46.6 from 44.9 last month.

This was below expectations of a decline to 63.5. It seems the only "good news" these days is from housing!

Earlier on house prices:
• Case Shiller: House Prices increased in April
• Real House Prices and Price-to-Rent Ratio
• All Current House Price Graphs

by Calculated Risk on 6/26/2012 02:36:00 PM

Leave it to the NAR to get overly enthusiastic.

From Jeff Collins at the O.C. Register: Realtor guru: 10% home-price jump possible

"This time next year, there could be a 10% price appreciation. I would not be surprised to see that,” [National Association of Realtors Chief Economist Lawrence] Yun said.

It is one thing for prices to stop falling - and maybe increase a little over the next year. But, in addition to the large number of homes in the foreclosure pipeline, there are also many people waiting for a "better market" to sell - and I suspect the slightest appreciation will bring more inventory to market. A 10% increase over the next year? Well, three words: Not. Gonna. Happen.

Earlier on house prices:
• Case Shiller: House Prices increased in April
• Real House Prices and Price-to-Rent Ratio
• All Current House Price Graphs