by Calculated Risk on 2/15/2016 10:35:00 AM

In addition to Case-Shiller, and CoreLogic, I'm also watching the FNC, Zillow and several other house price indexes.

FNC released their December 2015 index data.  FNC reported that their Residential Price Index™ (RPI) indicates that U.S. residential property values increased 0.4% from November to December (Composite 100 index, not seasonally adjusted). 

The 10 city MSA increased 0.1% (NSA), the 20-MSA RPI increased 0.2%, and the 30-MSA RPI increased 0.4% in December. These indexes are not seasonally adjusted (NSA), and are for non-distressed home sales (excluding foreclosure auction sales, REO sales, and short sales).

Notes: In addition to the composite indexes, FNC presents price indexes for 30 MSAs. FNC also provides seasonally adjusted data.

The index is still down 14.2% from the peak in 2006 (not inflation adjusted).

Click on graph for larger image.

This graph shows the year-over-year change based on the FNC index (four composites) through December 2015. The FNC indexes are hedonic price indexes using a blend of sold homes and real-time appraisals.

Most of the other indexes are also showing the year-over-year change in the mid single digit range.

Note: The December Case-Shiller index will be released on Tuesday, February 22nd.

by Calculated Risk on 2/14/2016 08:40:00 PM

Here is a graph of expenditures on energy goods and services as a percent of total personal consumption expenditures through December 2015.

This is one of the measures that Professor Hamilton at Econbrowser looks at to evaluate any drag on GDP from energy prices.


Click on graph for larger image.

Data source: BEA Table 2.3.5U.

The huge spikes in energy prices during the oil crisis of 1973 and 1979 are obvious. As is the increase in energy prices during the 2001 through 2008 period.

When data for February is released - WTI oil futures are currently at $29 per barrel, down from $37 in December - we will probably see energy expenditures as a percent of PCE at all time lows.

by Calculated Risk on 2/14/2016 10:46:00 AM

Note: There were some large swings in LA area port traffic early last year due to labor issues that were settled in late February. Port traffic slowed in January and February last year, and then surged in March 2015 as the waiting ships were unloaded (the trade deficit increased in March too).  This will impact the YoY changes for the first few months of 2016.

From the Port of Los Angeles: Port of Los Angeles January Volumes increase 33%; 704,398 TEUs Busiest January in Port History

The Port of Los Angeles handled 704,398 Twenty-Foot Equivalent Units (TEUs) in January 2016, an increase of 33 percent compared to January 2015. It was the busiest January in the port’s 109-year history. ...

"Record January volumes is a very encouraging way to start 2016, particularly after the slow start that West Coast ports experienced last year," said Port of Los Angeles Executive Director Gene Seroka.

Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.

The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).

To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.

Click on graph for larger image.

On a rolling 12 month basis, inbound traffic was up 2.2% compared to the rolling 12 months ending in December.   Outbound traffic was up 0.3% compared to 12 months ending in December.

The recent downturn in exports is probably due to the strong dollar and weakness in China.

The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March (depending on the timing of the Chinese New Year).

Imports were up sharply year-over-year in January; exports were up 5% year-over-year.  This suggests a larger trade deficit with the Far East in January.

by Calculated Risk on 2/13/2016 08:11:00 AM

The key economic report this week is January housing starts on Wednesday.

For prices, PPI and CPI will be released this week.

From manufacturing, January Industrial Production and the February NY and Philly Fed manufacturing surveys will be released this week.

----- Monday, February 15th -----
All US markets are closed in observance of the Presidents' Day holiday.

----- Tuesday, February 16th -----
8:30 AM: NY Fed Empire State Manufacturing Survey for February. The consensus is for a reading of -10.0, up from -19.4.

10:00 AM: The February NAHB homebuilder survey. The consensus is for a reading of 61, up from 60 in December.  Any number above 50 indicates that more builders view sales conditions as good than poor.

----- Wednesday, February 17th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: Housing Starts for January.

Total housing starts decreased to 1.149 million (SAAR) in December. Single family starts decreased to 768 thousand SAAR in December.

The consensus for 1.175 million, up from December.

8:30 AM: The Producer Price Index for January from the BLS. The consensus is for a 0.2% decrease in prices, and a 0.1% increase in core PPI.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for January.

This graph shows industrial production since 1967.

The consensus is for a 0.4% decrease in Industrial Production, and for Capacity Utilization to increase to 76.7%.

During the day: The AIA's Architecture Billings Index for January (a leading indicator for commercial real estate).

2:00 PM: The Fed will release the FOMC Minutes for the Meeting of January 26-27, 2016

----- Thursday, February 18th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 275 thousand initial claims, up from 269 thousand the previous week.

8:30 AM: the Philly Fed manufacturing survey for February. The consensus is for a reading of -2.5, up from -3.5.

----- Friday, February 19th -----
8:30 AM: The Consumer Price Index for January from the BLS. The consensus is for a 0.1% decrease in CPI, and a 0.1% increase in core CPI.

by Calculated Risk on 2/12/2016 09:42:00 PM

Mortgage rates increased today, but are still very low.

From Matthew Graham at Mortgage News Daily: Mortgage Rates Jump Higher From Long-Term Lows

The average lender is now back to quoting conventional 30yr fixed rates of 3.625%, up from 3.5% yesterday. A few of the less-aggressive lenders are back to 3.75% already. But again, factoring out the past 3 days, today would be the best day for mortgage rates in more than a year.
emphasis added

Here is a table from Mortgage News Daily:

Home Loan Rates

View More Refinance Rates

by Calculated Risk on 2/12/2016 02:22:00 PM

Interesting tidbit: Even though January is one of the weakest periods of the year, average weekly hotel occupancy in 2016 is already above the average for all of 2009 (the worst year for hotels since the Depression)!

Here is an update on hotel occupancy from HotelNewsNow.com: STR: US results for week ending 6 February

In year-over-year measurements, the industry’s occupancy decreased 1.9% to 56.6%. However, ADR for the week was up 5.2% to $119.03 and RevPAR rose 3.3% to $67.33.

In year-over-year measurements, the industry’s occupancy decreased 1.9% to 56.6%. However, average daily rate for the week was up 5.2% to US$119.03, and revenue per available room rose 3.3% to US$67.33.
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.  The occupancy rate should continue to increase for the next couple of months.

The red line is for 2016, dashed orange is 2015, blue is the median, and black is for 2009 - the worst year since the Great Depression for hotels.

2015 was the best year on record for hotels.

So far 2016 is tracking 2015. A solid start to the year.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

by Calculated Risk on 2/12/2016 11:14:00 AM

The Q4 report was released today: Household Debt and Credit Report.

From the NY Fed: Household Debt Grows Modestly

Household debt increased moderately and repayment rates improved during the last three months of 2015, according to the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit. The $51 billion increase put total household indebtedness at $12.12 trillion as of the end of last year. Additionally, only 5.4 percent of outstanding debt was in some stage of delinquency, the lowest rate since the second quarter of 2007. The report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data.

Modest aggregate debt growth was partially attributable to flat mortgage balances. Balances on home equity lines of credit continued a decline that began more than four years ago, falling last quarter by $5 billion. In contrast, auto debt, which has steadily advanced every quarter since mid-2011, increased again by $19 billion. ...

Overall delinquency rates improved last quarter, a development driven largely by mortgages. Just 2.2 percent of mortgage balances were 90+ days delinquent, a slight improvement from the third quarter’s 2.3 percent. Overall 90+ day delinquencies dropped to their lowest level since the beginning of 2008.
emphasis added

Click on graph for larger image.

Here are two graphs from the report:

The first graph shows aggregate consumer debt increased in Q4.  Household debt peaked in 2008, and bottomed in Q2 2013.

Mortgage debt declined slightly in Q4, from the NY Fed:

Mortgage balances, the largest component of household debt, were roughly flat in the fourth quarter. Mortgage balances shown on consumer credit reports stood at $8.25 trillion, an $11 billion drop from the third quarter of 2015. Balances on home equity lines of credit (HELOC) dropped by $5 billion, to $487 billion. Non-housing debt balances continued to increase in the fourth quarter, with a $19 billion increases each in auto loan and credit card balances respectively. Student loan balances increased by $29 billion

The second graph shows the percent of debt in delinquency. The percent of delinquent debt is declining, although there is still a large percent of debt 90+ days delinquent (Yellow, orange and red). 

The overall delinquency rate decreased in Q4 to 5.4%.  From the NY Fed:

Overall delinquency rates improved modestly in 2015Q4. As of December 31, 5.4% of outstanding debt was in some stage of delinquency. Of the $652 billion of debt that is delinquent, $442 billion is seriously delinquent (at least 90 days late or “severely derogatory”).

There are a number of credit graphs at the NY Fed site.

by Calculated Risk on 2/12/2016 10:05:00 AM

The preliminary University of Michigan consumer sentiment index for February was at 90.7, down from 92.0 in January:

"Consumer confidence continued its slow decline in early February, with its current level just below the average recorded during the 2nd half of 2015 (91.0). The small early February decline was due to a less favorable outlook for the economy during the year ahead, while longer term prospects for the national economy remained unchanged at favorable levels. While slowing economic growth was anticipated to slightly lessen the pace of job and wage gains, consumers viewed their personal financial situations somewhat more favorably due to the expectation that the inflation rate would remain low for a considerable period of time. Indeed, consumers anticipated the lowest long term inflation rate since this question was first asked in the late 1970's. "
emphasis added

This was below the consensus forecast of 92.5.


Click on graph for larger image.

by Calculated Risk on 2/12/2016 08:45:00 AM

On a monthly basis, retail sales were up 0.2% from December to January (seasonally adjusted), and sales were up 3.4% from January 2015.

From the Census Bureau report:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $449.9 billion, an increase of 0.2 percent from the previous month, and 3.4 percent above January 2015. ... The November 2015 to December 2015 percent change was revised from down 0.1 percent to up 0.2 percent.

Click on graph for larger image.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

Retail sales ex-gasoline were up 0.4%.

The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993.

Retail and Food service sales ex-gasoline increased by 4.5% on a YoY basis.

The increase in January was at expectations, and retail sales for December were revised up from a 0.1% decrease to a 0.2% increase. The headline number was decent, and sales ex-gasoline are up a solid 4.5% YoY.

by Calculated Risk on 2/11/2016 08:22:00 PM

Friday:
• At 8:30 AM ET, Retail sales for January will be released.  The consensus is for retail sales to increase 0.2% in January.

• At 10:00 AM, University of Michigan's Consumer sentiment index (preliminary for February). The consensus is for a reading of 92.5, up from 92.0 in January.

• At 10:00 AM, Manufacturing and Trade: Inventories and Sales (business inventories) report for November.  The consensus is for a 0.1% increase in inventories.

• At 11:00 AM, the New York Fed will release their Q4 2015 Household Debt and Credit Report

On Sacramento:  During the recession, I started following the Sacramento market to look for changes in the mix of houses sold (equity, REOs, and short sales). For a few years, not much changed. But in 2012 and 2013, we saw some significant changes with a dramatic shift from distressed sales to more normal equity sales.

This data suggests healing in the Sacramento market and other distressed markets are showing similar improvement.  Note: The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

In January, total sales were up 3.9% from January 2015, and conventional equity sales were up 11.3% compared to the same month last year.

In December, 9.2% of all resales were distressed sales. This was up from 7.6% last month, and down from 16.6% in January 2015.

The percentage of REOs was at 4.3% in January, and the percentage of short sales was 4.9%.

Here are the statistics.

Click on graph for larger image.

This graph shows the percent of REO sales, short sales and conventional sales.

There has been a sharp increase in conventional (equity) sales that started in 2012 (blue) as the percentage of distressed sales declined sharply.

Active Listing Inventory for single family homes decreased 25.0% year-over-year (YoY) in January.  This was the ninth consecutive monthly YoY decrease in inventory in Sacramento.

Cash buyers accounted for 18.4% of all sales (frequently investors).

Summary: This data suggests a more normal market with fewer distressed sales, more equity sales, and less investor buying.