by Calculated Risk on 8/28/2014 10:03:00 AM
Thursday, August 28, 2014
NAR: Pending Home Sales Index increased 3.3% in July, down 2.1% year-over-year
From the NAR: Pending Home Sales Pick Up in July
The Pending Home Sales Index, a forward-looking indicator based on contract signings, climbed 3.3 percent to 105.9 in July from 102.5 in June, but is still 2.1 percent below July 2013 (108.2). The index is at its highest level since August 2013 (107.1) and is above 100 – considered an average level of contract activity – for the third consecutive month.Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in August and September.
...
The PHSI in the Northeast jumped 6.2 percent to 89.2 in July, and is 8.3 percent above a year ago. In the Midwest the index marginally fell 0.4 percent to 104.6 in July, and is 6.4 percent below July 2013.
Pending home sales in the South increased 4.2 percent to an index of 119.0 in July, and is now 1.0 percent below a year ago. The index in the West rose 4.0 percent in July to 99.5, but remains 6.0 percent below July 2013.
Weekly Initial Unemployment Claims decrease to 298,000
by Calculated Risk on 8/28/2014 08:33:00 AM
The DOL reports:
In the week ending August 23, the advance figure for seasonally adjusted initial claims was 298,000, a decrease of 1,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 298,000 to 299,000. The 4-week moving average was 299,750, a decrease of 1,250 from the previous week's revised average. The previous week's average was revised up by 250 from 300,750 to 301,000.The previous week was revised up to 299,000.
There were no special factors impacting this week's initial claims.
The following graph shows the 4-week moving average of weekly claims since January 1971.
Click on graph for larger image.
The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 299,750.
This was close to the consensus forecast of 300,000.
Wednesday, August 27, 2014
A comment from Tom Lawler on Household Estimates; Thursday: Unemployment Claims, Q2 GDP (2nd estimate), Pending Home Sales
by Calculated Risk on 8/27/2014 07:44:00 PM
CR Note: Many analysts and reporters use Census data to estimate ongoing household formation. They are ignoring severe problems with the Census estimates ... from housing economist Tom Lawler:
For well over a decade I have been trying to get Census to explain the widely different estimates of households from different surveys. In a 2004 "summit" that I hosted at Fannie Mae, I asked Census officials "what household number from a time series perspective should analysts use as the best estimate from Census?" The answer I got a decade a go was, "that's a good question." Read the attached.Thursday:
Household Estimates Conundrum: Effort to Develop More Consistent Household Estimates Across Surveys
And here is the conclusion section from the above.
We have an obligation to our data users to provide clear, unambiguous explanations and guidance about the estimates we provide on households (occupied housing units). In our role as the "leading source of quality data about the Nation’s people and economy," we ultimately should be able to:It's been a long slog ...
1. Develop a common methodology that produces reasonably consistent estimates of households (and, therefore, vacant housing units) across our current surveys,
2. Develop a common methodology that may still produce noticeable differences but still be able to explain differences and recommend a preferred estimate, or
3. Be able to explain why we cannot develop a common methodology and be able to explain the differences and provide guidance about the agency’s preferred estimate of households (occupied housing units) for the United States.
• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to increase to 300 thousand from 298 thousand.
• Also at 8:30 AM, Gross Domestic Product, 2nd quarter 2014 (second estimate). The consensus is that real GDP increased 4.0% annualized in Q2, unchanged from 4.0% in the advance estimate.
• At 10:00 AM, the Pending Home Sales Index for July. The consensus is for a 0.5% increase in the index.
• At 11:00 AM, the Kansas City Fed manufacturing survey for August. This is the last of the Fed regional surveys for August.
Average 30 Year Fixed Mortgage Rates decline to 4.11%, No "Refi Boom" in Sight
by Calculated Risk on 8/27/2014 04:27:00 PM
I use the weekly Freddie Mac Primary Mortgage Market Survey® (PMMS®) to track mortgage rates. The PMMS series started in 1971, so there is a fairly long historical series.
For daily rates, the Mortgage News Daily has a series that tracks the PMMS very well, and is usually updated daily around 4 PM ET. The MND data is based on actual lender rate sheets, and is mostly "the average no-point, no-origination rate for top-tier borrowers with flawless scenarios". (this tracks the Freddie Mac series).
MND reports that average 30 Year fixed mortgage rates declined today to 4.11% from 4.13% yesterday.
One year ago rates were at 4.61%, so rates are down 50 bps year-over-year.
I've mentioned before that mortgage refinancing tends to pickup when mortgage rates drop by about 50 bps from the recent levels. However rates were only at or above 4.60% for a short period - and many homeowners refi'd when rates were below 4% in 2012 and 2013. So I don't expect a "refi boom" right now.
Here is a table from Mortgage News Daily:
Freddie Mac: Mortgage Serious Delinquency rate declined in July, Lowest since January 2009
by Calculated Risk on 8/27/2014 12:36:00 PM
Freddie Mac reported that the Single-Family serious delinquency rate declined in July to 2.02% from 2.07% in June. Freddie's rate is down from 2.70% in July 2013, and this is the lowest level since January 2009. Freddie's serious delinquency rate peaked in February 2010 at 4.20%.
These are mortgage loans that are "three monthly payments or more past due or in foreclosure".
Note: Fannie Mae will report their Single-Family Serious Delinquency rate for July in a few days.
Click on graph for larger image
Although this indicates progress, the "normal" serious delinquency rate is under 1%.
The serious delinquency rate has fallen 0.68 percentage points over the last year - and at that rate of improvement, the serious delinquency rate will not be below 1% until early 2016.
Note: Very few seriously delinquent loans cure with the owner making up back payments - most of the reduction in the serious delinquency rate is from foreclosures, short sales, and modifications.
So even though distressed sales are declining, I expect an above normal level of Fannie and Freddie distressed sales for perhaps 2 more years (mostly in judicial foreclosure states).