by Calculated Risk on 3/25/2015 09:33:00 AM

Freddie Mac reported that the Single-Family serious delinquency rate declined in February to 1.81%, down from 1.86% in January. Freddie's rate is down from 2.29% in February 2014, and the rate in February was the lowest level since December 2008. 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 February next week.

Click on graph for larger image

Although the rate is declining, the "normal" serious delinquency rate is under 1%. 

The serious delinquency rate has fallen 0.48 percentage points over the last year - and the rate of improvement has slowed recently - but at that rate of improvement, the serious delinquency rate will not be below 1% until late 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 2 more years (mostly in judicial foreclosure states).

by Calculated Risk on 3/25/2015 07:00:00 AM

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

Mortgage applications increased 9.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 20, 2015. ...

The Refinance Index increased 12 percent from the previous week. The seasonally adjusted Purchase Index increased 5 percent from one week earlier to its highest level since January 2015.
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.90 percent, its lowest level since February 2015, from 3.99 percent, with points decreasing to 0.37 from 0.40 (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.

2014 was the lowest year for refinance activity since year 2000.

2015 will probably see a little more refinance activity than in 2014, but not a large refinance boom.

The second graph shows the MBA mortgage purchase index.  

According to the MBA, the unadjusted purchase index is 3% higher than a year ago.

by Calculated Risk on 3/24/2015 08:01:00 PM

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

• At 8:30 AM, Durable Goods Orders for February from the Census Bureau. The consensus is for a 0.5% increase in durable goods orders.

With lower gasoline prices, vehicle miles driven have reached a new high on a rolling 12 month basis.

The Department of Transportation (DOT) reported:

◦Travel on all roads and streets changed by 4.9% (11.1 billion vehicle miles) for January 2015 as compared with January 2014.

◦Travel for the month is estimated to be 237.4 billion vehicle miles.

◦The seasonally adjusted vehicle miles traveled for January 2015 is 257.9 billion miles, a 5.1% (12.5 billion vehicle miles) increase over January 2014. It also represents a -0.2% change (-0.5 billion vehicle miles) compared with December 2014.

The following graph shows the rolling 12 month total vehicle miles driven to remove the seasonal factors.

The rolling 12 month total is moving up, after moving sideways for several years.


Click on graph for larger image.

In the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Miles driven had been below the previous peak for 85 months - an all time record.

The second graph shows the year-over-year change from the same month in the previous year.

 In January 2015, gasoline averaged of $2.21 per gallon according to the EIA.  That was down significantly from January 2014 when prices averaged $3.39 per gallon.

However gasoline prices are just part of the story.  The lack of growth in miles driven over the last 7 years was probably also due to the lingering effects of the great recession (lack of wage growth), the aging of the overall population (over 55 drivers drive fewer miles) and changing driving habits of young drivers.

Now, miles driven - on a rolling 12 month basis - is at a new high.

by Calculated Risk on 3/24/2015 05:50:00 PM

Here is an indicator that I follow on trucking, from the ATA: ATA Truck Tonnage Index Fell 3.1% in February

American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 3.1% in February, following a revised gain of 1.3% during the previous month. In February, the index equaled 131.6 (2000=100), the lowest level since September 2014.

Compared with February 2014, the SA index increased 3%, although this was the smallest year-over-year gain since June of last year and below the 2014 annual increase of 3.7%. ...

“The February drop in truck tonnage was not a surprise,” said ATA Chief Economist Bob Costello. “Retail sales, manufacturing output and housing starts were all off during the month, so the tonnage decline fits with those indicators. The surprise would have been had tonnage increased with all of those sectors falling.”

Costello added that the winter weather that impacted a large portion of the country during February had a negative impact on truck tonnage as well as industries that drive tonnage, like retail, manufacturing and housing starts.

Trucking serves as a barometer of the U.S. economy, representing 69.1% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9.7 billion tons of freight in 2013. Motor carriers collected $681.7 billion, or 81.2% of total revenue earned by all transport modes.
emphasis added

Click on graph for larger image.

Here is a long term graph that shows ATA's For-Hire Truck Tonnage index.

The dashed line is the current level of the index.

The index is now up 3.0% year-over-year.

by Calculated Risk on 3/24/2015 02:57:00 PM

Economist Tom Lawler sent me the updated table below of short sales, foreclosures and cash buyers for several selected cities and areas in February.

On distressed: Total "distressed" share is down in most of these markets mostly due to a decline in short sales (Mid-Atlantic is up year-over-year because of an increase foreclosure as lenders work through the backlog).

Short sales are down in these areas.

Foreclosures are up in several areas, especially in Florida.

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
	Feb-15	Feb-14	Feb-15	Feb-14	Feb-15	Feb-14	Feb-15	Feb-14
Las Vegas	9.3%	14.0%	9.7%	12.0%	19.0%	26.0%	37.4%	46.8%
Reno**	7.0%	13.0%	7.0%	7.0%	14.0%	20.0%
Phoenix	4.4%	5.3%	5.8%	8.3%	10.1%	13.7%	29.9%	35.4%
Sacramento	6.3%	12.4%	8.6%	7.0%	14.9%	19.4%	19.8%	26.5%
Minneapolis	2.7%	5.0%	15.3%	25.3%	18.1%	30.3%
Mid-Atlantic	5.3%	7.7%	15.1%	10.9%	20.4%	18.6%	21.2%	21.4%
Orlando	5.3%	9.4%	27.0%	23.8%	32.3%	33.2%	42.2%	48.2%
California *	6.2%	9.0%	6.8%	8.0%	13.0%	17.0%
Bay Area CA*	4.8%	6.3%	4.5%	5.0%	9.3%	11.3%	26.7%	28.4%
So. California*	6.1%	9.0%	6.1%	6.7%	12.2%	15.7%	28.0%	31.0%
Florida SF	4.9%	8.4%	24.0%	23.6%	28.9%	32.0%	42.4%	47.9%
Florida C/TH	2.9%	6.0%	18.8%	17.8%	21.7%	23.8%	69.4%	73.2%
Tampa MSA SF	5.2%	9.9%	26.6%	24.9%	31.8%	34.8%	43.2%	46.4%
Tampa MSA C/TH	2.4%	5.3%	19.0%	19.2%	21.5%	24.6%	65.4%	71.2%
Miami MSA SF	7.7%	13.8%	22.5%	16.4%	30.1%	30.1%	42.2%	48.7%
Miami MSA C/TH	3.6%	7.5%	23.5%	18.3%	27.1%	25.8%	71.9%	75.2%
Northeast Florida					37.6%	44.5%
Chicago (city)					29.9%	40.0%
Hampton Roads					22.6%	30.7%
Des Moines							21.3%	23.3%
Georgia***							27.1%	35.3%
Omaha							19.6%	25.6%
Pensacola							36.7%	41.8%
Knoxville							23.9%	27.4%
Richmond VA			13.9%	22.2%			21.5%	22.2%
Springfield IL**			15.3%	18.3%			21.4%	N/A
*share of existing home sales, based on property records **Single Family Only ***GAMLS