Global| Oct 24 2012U.S. Home Price Appreciation Picks Up
by:Tom Moeller
|in:Economy in Brief
Summary
The U.S. House Price Index from the Federal Housing and Finance Agency (FHFA) gained 0.6% during August following an unrevised 0.2% July increase. The rise lifted the y/y advance to 4.7%, its strongest since 2006. That followed four [...]
The U.S. House Price Index from the Federal Housing and Finance Agency (FHFA) gained 0.6% during August following an unrevised 0.2% July increase. The rise lifted the y/y advance to 4.7%, its strongest since 2006. That followed four successive years of price decline. Prices remained 14.6% below the 2007 average.
Home price appreciation was pronounced in the Mountain states (11.7% y/y) following declines larger than in the rest of the country. The gain was followed by the Pacific (8.1% y/y), West South Central (5.2% y/y), South Atlantic (4.4% y/y), West North Central (4.3% y/y) and the East North Central (3.5% y/y) regions. Elsewhere, home price improvement was modest, at best.
The FHFA house price index is a weighted repeat sales index. It measures average price changes in repeat sales or refinancings on the same properties. It is based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single family properties are included. The FHFA data is available in Haver's USECON database.
| (FHFA U.S. House Price Index Purchase Only (SA %) | Aug | Jul | Jun | Y/Y | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Total | 0.6 | 0.2 | 0.6 | 4.7 | -4.2 | -2.8 | -5.1 |
| New England | 1.1 | -0.1 | -0.1 | 1.0 | -2.2 | -2.2 | -2.6 |
| Middle Atlantic | 0.8 | -0.7 | 0.3 | -0.0 | -3.3 | -1.1 | -3.0 |
| East North Central | 0.4 | 0.1 | 0.5 | 3.5 | -3.7 | -3.2 | -3.6 |
| West North Central | -0.2 | 1.0 | 1.0 | 4.3 | -3.4 | -1.9 | -1.4 |
| South Atlantic | 0.4 | 0.1 | 0.4 | 4.4 | -5.3 | -4.8 | -7.5 |
| East South Central | 0.0 | -0.8 | 0.8 | 2.1 | -2.8 | -2.7 | -2.1 |
| West South Central | 0.2 | 0.7 | 0.1 | 5.2 | -1.1 | -0.2 | -0.1 |
| Mountain | -0.6 | 1.3 | 3.3 | 11.7 | -6.9 | -6.5 | -10.9 |
| Pacific | 2.4 | 0.3 | 0.4 | 8.1 | -7.1 | -2.2 | -11.2 |
U.S. New Home Sales Advance But Prices
Retreat
by Tom Moeller October 24, 2012
by Tom Moeller October 24, 2012
The new home sales market reached a three year high last month. New home sales in September rose 5.7% to 389,000 (SAAR) from 368,000 during August, revised from 373,000. The gain beat Consensus expectations for 382,000 sales. The latest was the highest level since April 2010, just before the home buyers tax credit expired. Home sales in the South paced the m/m increase with a 16.8% (24.3% y/y) rise. That was followed by a 16.7% (75.0% y/y) rise in the Northeast and a 3.9% (62.1% y/y) gain the West. New home sales in the Midwest fell by roughly one-third m/m (-31.9% y/y).
The median price of a new single family home slipped 3.2% to $242,400 (+11.7% y/y) while prices in prior months were revised lower. The average price slipped to $292,400 (14.5% y/y) during September.
The length of time to sell a new home fell sharply m/m to 6.5 months in September. The inventory of unsold homes at 145,000 (-9.4% y/y) ticked up m/m from the all time low. This is a 4.5 month supply at the current sales rate, the lowest since late-2005.
The data in this report are available in Haver's USECON database. The consensus expectation figure is from the Action Economics survey and is available in the AS1REPNA database.
| U.S. New Home Sales | Sep | Aug | Jul | Y/Y % | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Total (SAAR, 000s) | 389 | 368 | 373 | 27.1 | 307 | 321 | 374 |
| Northeast | 35 | 30 | 31 | 75.0 | 21 | 31 | 31 |
| Midwest | 32 | 51 | 53 | -31.7 | 45 | 45 | 54 |
| South | 215 | 184 | 184 | 24.3 | 169 | 173 | 202 |
| West | 107 | 103 | 105 | 62.1 | 72 | 74 | 87 |
| Median Price (NSA, $) | $242,400 | $250,400 | $236,700 | 11.7 | 224,317 | 221,242 | 214,500 |
U.S. Mortgage Applications Decline Again The Mortgage Bankers Association index of total mortgage applications
fell 12.0% last week (+27.8% y/y), down for the third straight week. The
decline was led by a 12.9% drop (+34.0% y/y) in applications to refinance
an existing loan. Home purchase applications declined 8.3% last
week (+7.3% y/y). Applications for fixed interest rate loans rose 30.2%
y/y as lower mortgage rates were locked in. Adjustable rate loan
applications fell 11.0% y/y. The average mortgage loan size was $215,100 (1.6% y/y). The average for
home purchases was $244,600 (14.7% y/y) while for refinancings it was down
1.4% y/y at $208,200. The average size of a fixed rate loan was $200,500
and for variable rate loans it was $544,200. The effective rate on fixed-interest, conventional 15-year mortgages
ticked up last week to 3.05% but remained down compared to 3.47% in
January. The effective rate on a 30-year fixed rate rose to 3.75% and the
effective rate on a Jumbo 30-year loan advanced to 3.97%. Though it's
narrowed slightly of late, the spread between 15- and 30-year loan rates
continued wide by historical standards. The effective interest rate on an
adjustable 5-year mortgage rose to 2.84% but remained down from its
3.93% high during February of last year. The Mortgage Bankers Association surveys between 20 to 35 of the top
lenders in the U.S. housing industry to derive its refinance, purchase and
market indexes. The weekly survey covers roughly 50% of all U.S.
residential mortgage applications processed each week by mortgage banks,
commercial banks and thrifts. The figures for weekly mortgage applications
are available in Haver's SURVEYW database.
by Tom
Moeller October 24, 2012
MBA Mortgage
Applications (SA, 3/16/90=100)
10/19/12
10/12/12
10/05/12
Y/Y%
2011
2010
2009
Total Market Index
848.3
964.0
1,006.2
27.8
572.3
659.3
736.4
Purchase
184.2
200.9
199.2
7.3
182.6
199.8
263.5
Refinancing
4,752.1
5,452.9
5,757.3
34.0
2,858.4
3,348.1
3,509.2
15-Year Mortgage Effective Interest
Rate (%)
3.05
2.97
2.98
3.71
(10/11)3.97
4.39
4.85
FOMC Indicates Securities Purchases Will Continue
by Tom Moeller October 24, 2012
by Tom Moeller October 24, 2012
As expected, the Federal Open Market Committee today left the Federal funds rate in a "range from 0 to 1/4 percent." The Fed funds rate has remained unchanged since late-2008 at its lowest level ever. The discount rate also was left unchanged at 0.75%. The Fed indicated that the economy may warrant an exceptionally low Fed funds rate at least through late 2014.
Confirming recent action, "... the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of Treasury securities ..."
Regarding the economy, the Fed continued to assert, "Household spending has advanced a bit more quickly, but growth in business fixed investment has slowed. The housing sector has shown some further signs of improvement, albeit from a depressed level."
As for inflation, "Inflation recently picked up somewhat, reflecting higher energy prices. Longer-term inflation expectations have remained stable."
The press release for today's FOMC meeting can be found http://www.federalreserve.gov/newsevents/press/monetary/20121024a.htm
The Haver databases USECON, WEEKLY and DAILY contain the figures from the Federal Reserve Board.
| Current | Last | 2011 | 2010 | 2009 | 2008 | |
|---|---|---|---|---|---|---|
| Federal Funds Rate, % (Target | 0.00-0.25 | 0.00-0.25 | 0.10 | 0.17 | 0.16 | 1.93 |
| Discount Rate, % | 0.75 | 0.75 | 0.75 | 0.72 | 0.50 | 2.39 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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