Pending Homes Sales Increased
October 30, 2010
The pending home sales increased 4.3 percent in the month of August according to the National Association of Realtors after an increase in the month of July of 4.5 percent. Looking at the year over year basis, however, pending sales are at a low of 18.4 percent.
According to the Mortgage Bankers Association the seasonally adjusted composite index of mortgage applications decreased the week that ended on October 0.2 percent while refinancing applications decreased 2.5 percent and purchase volume rose 9.3 percent which is the highest seen since the beginning of May.
Factory orders decreased in the month of August to hit a seasonally adjusted $408.9 billion. There was an increase of 0.5 percent in the month of July. The decrease is blamed on a 40.2 decrease in demand for commercial aircraft but excludes volatile transportation, which increased 0.9 percent.
The monthly composite index of non-manufacturing activity according to the Institute for Supply Management increased to 53.2 in the month of September from 51.5 in the month of August. Any reading above 50 shows expansion. This was the ninth consecutive month of seeing growth.
Increased inventory of 0.8 percent was seen with wholesalers in the month of August after an increase of 1.5 percent in the month of July. At the wholesale level, sales increased 0.5 percent in the month of August after seeing a 0.8 percent rise in the month of July. Economists had expected a rise of 0.5 percent for the month of August.
First claims for unemployment benefits decreased by 11,000 to 445,000 for the week that ended on October 2, while continuing claims for the week that ended on September 25 decreased by 48,000 to 4.45 million. The unemployment rate remained the same at 9.6 percent in the month of September.
What to look for on the economic calendar – International trade on October 14 and on October 15 retail sales.
Purchase Volume Increased 6.3 Percent
September 25, 2010
According to the Mortgage Bankers Association seasonally adjusted composite index of mortgage applications decreased for the week that ended on September 3 1.5 percent, refinancing applications decreased 3.1 percent, while purchase volume increased 6.3 percent. Of this, refinancing applications made up 81.9 percent of all applications.
Consumer debt fee in July by $3.6 million as reported by the Federal Reserve. Economist had believed this would decrease $3.5 billion in July. In June, consumer credit debt decreased by $1.3 billion, in May $5.3 billion, and in April $14.9 billion.
ICSC-Goldman Sachs index showed retail sales decreased 0.4 percent for the week that ended on September 4. On a year-over-year basis, retailers saw sales rise 1.8 percent, which is the lowest, reading seen since May.
The trade deficit fell 14 percent to $42.8 billion for the month of July. Economists had predicted it to increase to $46.8 billion. Exports increased 1.8 percent to $153.3 billion which is the best reading noted since August of 2008. Civilian aircraft, industrial machinery, computers and telecommunications equipment sales reported gains while imports decreased by 2.1 percent to 196.1 billion.
Wholesaler’s inventory rose 1.3 percent in the month of July after a 0.3 percent increase in June. Wholesale sales level increased 0.6 percent in the month of July which is the best seen since April. Economists had expected inventories would increase 0.4 percent in the month of July.
Unemployment benefits claims decreased by 27,000 to 451,000 for the week that ended on September 4. Economists predicted claims would decrease to 470,000. Continuing claims for unemployment for the week that ended on August 28 decreased by 2,000 to 4.47 million.
What economic calendar reports to look forward to include retail sales on September 14, consumer inflation September 17, and industrial production September 15.
Less Mortgages Loans in Default
September 18, 2010
As reported by the Mortgage Bankers Association less mortgage borrowers are behind on their loan payments.
The overall delinquency rate in the United States decreased to 9.85 percent in the second quarter of 2010, which is down from the 10.06 percent seen in the first quarter.
The good news is that the percentage of severely delinquent loans, which are ones, that are ninety days or more late or ones that have been repossessed by lending companies also decreased in the second to 9.11 percent from 9.54 percent three months earlier.
Jay Brinkmann, chief economist at Mortgage Bankers Association explained the drop in the loans that are 90 days or more behind was the biggest drop ever recorded he states, “That shows we’re making headway.”
He stated there are three reasons for the improvement seen which includes:
Less loans are going into the default process
The homebuyer’s tax credit that increased the demand for homes created many pre-foreclosure sales, which removes the attached default loans from the stats
The government and lender mortgage modifications “cured” a few payment issues.
This may look good, but there is still one problem looming which is first time delinquencies increased after four quarters of decline. This stat increased to 3.51 percent for the second quarter from 3.45 percent in the first quarter. Brinkmann stated this reversal shows the weakness in the overall economy as well as the housing market.
Brinkmann stated, “It’s a question of jobs,” and went on to say, “It takes a paycheck to make a mortgage payment.”
Highlighting the trend is the foreclosure trend amid borrowers with conventional loans, such as 30-year, fixed rate mortgages. These accounted for nearly 36 percent of foreclosure starts during the second quarter. In addition, these safe loans usually do not get into trouble unless there is a loss employment or income.
California, Florida, Arizona and Nevada were the four worst hit states and are accounting for close to 60 percent still of the delinquencies seen nationwide, even though the numbers in California decreased quite a bit this year. California foreclosure starts made up close to 20 percent of the nation’s total at the end of 2009. This figure decreased to 14.7 percent in the second quarter of 2010.
One other positive trend is the slow downturn in the number of borrowers who own more than their home is worth.
CoreLogic reported that the rate of borrowers owing more than the home is worth decreased to 23 percent in the second quarter of 2010 from 24 percent in the first quarter.
When borrowers fall into this bracket, it increases the chance that they will lose the homes. Brinkmann explained that is one of the triggers to foreclosure. For those that have positive equity, this can be used as cash to pay bills, which does include their mortgage payment. If the cash reserves are not there, they are unable to pay their bills due to a drop in income, which leads to foreclosure.
Mortgage Bankers Association discovered that negative equity is worst in five states, which includes Nevada at 68 percent, Arizona at 50 percent, Florida at 46 percent, Michigan at 38 percent and California at 33 percent.
Construction Spending Up in June
August 13, 2010
Total construction spending increased 0.1 percent to $836 billion in June after a decreased $834.8 billion in May after revision. Economists believed a drop in June of 0.8 percent would occur.
The monthly composite index of manufacturing activity was lower in July at 55.5 after a reading of 56.2 in June as reported by the Institute for Supply Management. Any reading above 50 is a sign of expansion but below this number indicates a negative atmosphere. This was the twelfth month in a row of expansion.
Orders from factories decreased in June by 1.2 percent to a seasonally adjusted amount of $406.4 billion. The decrease was over the double that economists had suggested of 0.5 percent with a decrease in May of 1.8 percent.
Pending home sales index reported by the National Association of Realtors, which shows a forward looking indicator based on the contracts signed decreased in June 2.6 percent after a decrease in May of 30 percent. On a year over year basis, the index is down 18.6 percent.
The seasonally adjusted composite index of mortgage applications for the week that ended on July 30 as reported by the Mortgage Bankers Association was up 1.3 percent. Applications for refinancing increased 1.3 percent and purchase volume was up 1.5 percent.
The monthly composite index of non-manufacturing activity as reported by the Institute for Supply Management increased to 54.3 in July from 53.8 in June. Once again, any reading above 50 indicates expansion. This was the 7th month of growth in a row. Economists had estimated a reading of 53.
First claims for unemployment benefits increased by 19,000 claims to 479,000 for the week that ended on July 31. Those receiving claims for the week that ended on July 24 decreased by 34,000 to 4.54 million. The unemployment rate stayed the same in July at 9.5 percent.
Economic reports coming up include wholesale trade – August 10, international trade – August 11, and retail sales – August 13.
New Home Sales up in June
August 5, 2010
June was a good month when it comes to home sales, which rose 23.6 percent to be at a seasonally adjusted annual rate of 330,000 from a rate of 267,000 for the month of May. Economists had speculated 310,000 units. On a year over year basis, new home sales have decreased 16.7 percent.
The Standard & Poor’s/Case-Shiller 20-city housing price index reported the seasonally adjusted basis increased in May 1.3 percent while it was showed an increase of 0.9 percent in April. Year over year property valued rose 4.6 percent, which was the largest increase since August of 2006.
Consumer confidence decreased to 50.4 in July after a larger percent in June of 54.3 percent. Economists had speculated a number of 51. For your information, the index was benchmarked in 1985 at 100, as this year did not have a peak or a depression in consumer confidence.
The Mortgage Bankers Association reported its seasonally adjusted composite index of applications for mortgages for the week that ended on July 23 decreased 4.4 percent, whereas applications for refinancing decreased 5.9 percent while purchase volume rose 2 percent.
Durable good order decreased one percent in June after a decline in May of 0.8 percent. This report was on products that should last three or more years.
First claims for unemployment benefits decreased to 457,000 after falling 11,000 for the week that ended on July 24. Those renewing claims for the week that ended on July 17 increased to 4.57 million after an increase of 81,000.
The report on gross domestic product by the Commerce Depart stated the total output of services and goods created in the United States rose at an annual rate of 2.4 percent for the 2nd quarter of 2010. Economists had speculated a bit larger increase of 2.5 percent. This increase follows a 3.7 percent pace of growth during the 1st quarter of 2010.
Economic calendars coming up include August 2 construction spending, August 3 pending home sales, and August 6 consumer credit
Housing Market Index Decreased Two Points
July 27, 2010
In July according to the National Association of Home Builders/Wells Fargo housing market index decreased 2 points. Economists believed a reading of 16 would be reported. This was the lowest reading since April of 2009. Any reading above 50 is a sign of expansion but below this number indicates a negative atmosphere.
Retail sales increased 1.4 percent for the week that ended on July 17 according to the ICSC-Goldman Sachs index. Year over year retailers noticed an increase in sales of 4.2 percent, which is the best showing in the last two months.
New single-family homes and apartments construction decreased in June by 5% to a seasonally adjusted annual rate of 549,000. New building permits applications, which are an indicator of the activity for the future increased 2.1percent to an annual rate of 586,000.
The seasonally adjusted composite index of mortgage applications as reported by the Mortgage Bankers Association for the week that ended on July 16 rose 7.6 percent whereas refinancing applications increased 8.6 percent and the purchase volume also increased by 3.4 percent.
In June, existing homes sales decreased by 5.1 percent to a seasonally adjusted annual rate of 5.27 million when it was at 5.66 million units in May. The inventory of unsold homes that were on the market was at 3.99 million, which was a 2.5 percent increase and is an 8.9-month supply at the rate of current sales which is up from the 8.3 month supply which was seen in May.
First claims for unemployment benefits increased 37,000 to 464,000 for the week that ended on July 17. Those filing continuing claims for the week that ended on July 10 decreased by 223,000 to 4.567 million.
Leading economic indicators index, which forecast economic activity for the next 3 to 6 months decreased 0.2 percent in June after a gain of 0.5 percent in May.
Economic calendars coming soon are new home sales July 26, housing price index July 27, and gross domestic product July 30.
Trade Deficit Rises to 4.8 Percent
July 12, 2010
In May, the trade deficit rose 4.8% to $42.3 billion. This was the highest level seen since November of 2008 while in April it was at $40.3 billion gap.
The seasonally adjusted composite index of applications for mortgages as stated by the Mortgage Bankers Association for the week ending on July 9 fell 2.9 percent. Applications for refinancing decreased 2.9 percent and purchase volume decreased 3.1 percent.
June saw a decrease in retail sales of 0.5% with a revised decline in May of 1.1 percent. Economists speculated retail sales would fall 0.2 percent in June.
Total business inventories increased 0.1 percent in May, which followed a 0.4 percent increase in April. Total business sales decreased in May 0.9 percent, which was the first decline after seeing monthly gains for 13 consecutive weeks.
The producer price index tracks wholesale price inflation. This index decreased in June by 0.5% after a 0.3% decrease in May. Core prices, which does not include food and fuel, increased 0.1%. Wholesale prices for the year are up 2.7 percent.
Factories, mines, and utilities in the US saw an increase in industrial production of 0.1 percent in June with a 1.3 percent gain seen in May. The capacity utilization stayed the same in June at 74.1 percent.
Consumer prices decreased a seasonally adjusted 0.1 percent in June after a 0.2 percent decrease in May. Consumer prices for the year are up 1.1 percent.
The Reuters/University of Michigan consumer sentiment index preliminary reading for the month of July decreased to 66.5 following a 76 in June. This marks the lowest level seen since August of 2009.
First claims for unemployment benefits decreased by 29,000 to 429,000 for the week that ended on July 10. Continuing claims for the week that ended on July 3 increased by 247,000 to 4.68 million.
On the economic calendar: new home sales on July 26, housing price index on July 27, and gross domestic product on July 30.
Mortgage Applications Rose Week of June 25th
July 9, 2010
The Mortgage Bankers Association reported its seasonally adjusted composite index of mortgage applications for the week of June 25 rose 8.8%. Refinancing applications increased 12.6% while purchase volume declined 3.3%.
An increase of 0.8% was seen in April with a 0.1% decrease in March on The Standard & Poor’s/Case-Shiller 20-city housing price index.
The National Association of Realtors accounted that the pending home sales index, which is a forward-looking indicator based on signed contracts, decreased 30% in May while a revision was made in April with a 6% increase.
Spending for total construction declined 0.2% to $841.9 billion in May, after a revised 2.3% rise in April. Economists had predicted a larger drop of 0.5% in May.
Consumer confidence index declined to 52.9 in the month of June while the revised number for May was 62.7. Economist believed the reading was going to be 62.8. The index was benchmarked in 1985 at 100; this year was chosen, as it was neither a peak nor a low in consumer confidence.
The Institute for Supply Management stated that the monthly composite index of manufacturing activity was 56.2 in June while in May it was at 59.7. Any reading above 50 is a sign of expansion. This made 11th months of expansion in a row.
In May, factory orders declined 1.4%, which was more than the 0.5% decrease from what economists had anticipated. This was the largest drop since March 2009, which ended 8 straight monthly gains.
Initial claims for unemployment benefits increased by 13,000 to 472,000 for the week that ended on June 26. Continuing claims for the week that ended on June 19 increased by 43,000 to 4.62 million. The unemployment rate decreased in June to 9.5% from a 9.7% in the month of May.
Economic calendar upcoming include reports on wholesale trade on July 9 and chain store sales on July 7.
Housing Market Decreased 5 Points
June 21, 2010
The National Association of Home Builders/Wells Fargo reported the housing market index decreased five points in June to 17. Economists believed the reading would be 21. This drop was the largest seen in the market since November of 2008. Any reading that is below 50 shows a negative outlook.
The Mortgage Bankers Association reported their seasonally adjusted composite index of mortgage applications for the week that ended June 11 rose 17.7%. Refinancing applications rose 21.1% to the highest level seen this year. Purchase volume increased 7.3%, which is the first increase seen in the last six weeks.
In May, construction of apartments and new single-family houses decreased 10%, which is a seasonally adjusted yearly rate of 593,000 units. New building application permits decreased 5.9% to a yearly rate of 574,000 units.
The producer price index (tracks wholesale price inflation) saw a decrease of 0.3% in May, with a 0.1% increase in April. Core prices not including food and fuel increased 0.2% for the second month in a row. Wholesale prices are up 5.1% for the year.
In May, consumer prices fell a seasonally adjusted 0.2% after a 0.1% increase in March. This was the largest decline seen since December of 2008. When looking at the year-over-year basis, consumer prices at the core rate were up 0.9%, which is the smallest increase since January 1966. These figures do not include volatile food and energy prices.
Unemployment initial claims benefits increased by 12,000 to reach 472,000 for the week ending with June 12. Continuing claims for the week ending with May 5 increased by 88,000 to end at 4.57 million.
Economic reports upcoming include June 29 housing price index, July 1 pending home sales, and on July 2 factory orders.
Debt Increased More Than $954 Million
June 14, 2010
Consumer credit debt in April increased a whopping $954.8 million as reported by the Federal Reserve. Economists were wrong, as they had predicted consumer credit debt would decrease by $1 million in the month of April. In March, consumer credit debt decreased by $5.44 billion.
Unemployment benefits decreased by 3,000 to 456,000 for the week that ended on June 5. The claims that ended on the week of May 29 decreased by 255,000 to 4.46 million, which was the lowest seen since December of 2008.
The seasonally adjusted index of mortgage application as stated by the Mortgage Bankers Association of the week ending on June 4 fell 12.2 percent while refinancing applications declined 14.3 percent and the purchase volume decreased 5.7 percent.
Inventory of wholesalers increased by 0.4 percent during April with March at a 0.7 percent increase. Sales for wholesalers rose 0.7 percent in April, which made this the thirteenth month in a row that showed a gain.
A 0.4% rise was in April for total business inventories, which came after an upward increase in March of 0.7%. In April, total business sales increased 0.6%.
Trade deficit was an increase of 0.6 percent in April to $40.3 billion which was the highest seen since December of 2008 while March had a $40 billion gap.
In May, retail sales fell 1.2 percent after seeing a gain of 0.6 percent in April. Economists believed retail sales were going to rise 0.4 percent in May. A 9.3 percent drop in building materials started the 2.2 percent drop seen in September, which was the reason for the decline.
June’s preliminary consumer index by Reuters/University of Michigan saw a 75.5 rise which is the highest seen since January of 2008. The index was at a 30-year low in November of 2008 at 55.3.
Reports are due on the housing market index on June 15 with housing starts reports on June 16 and on June 17, the index of leading economic indicators.