It seems as if there is a little more complexity taking place in mortgage finance, and therefore the housing “market”, as the simplified idea of rates running the show isn’t holding water. On the surface, the general theme is one that contours to the outline of conventional mortgage interest as it ran through last year’s selloff. It stands to reason [...]
In contrast to existing home sales there has been no real bounce in new home sales. Again, that more than contradicts the idea of a home shortage (or at least a true market shortage, there may be a shortage when only factoring monetary targets) and further explains why builders are reluctant to close the purported supply gap. It makes no [...]
Existing home sales re-attained the 5 million SAAR level again in June, but that remains well behind last year’s trajectory. In other words, the bounce in sales after the most recent trough is not nearly as robust as predicted when it was simply assumed that the housing market would just revert back to 2013’s trend. In terms of yearly comps, [...]
On a seasonally-adjusted basis residential home construction was beyond ugly. There were widespread declines in June from May’s levels that more than suggest a lack of weather bounce (not unlike a lot of other indications). However, there is more than a little caution with housing data as it remains one of the most “noisy” series of the major economic accounts. [...]
More of the same from Janet Yellen in her latest speech, but her focus on “resilience” caught my attention as it relates to very recent developments. The taper threat experience last year may have been a warning, but it doesn’t seem like it resonated with her or policymakers. The major bond selloff, which led to global ripples of crisis in [...]
If there had been an actual recovery delivered as it was intended, promised and offered, the idea of inequality would be an afterthought in an otherwise prosperous age. Inequality, however defined, is a necessary feature of a dynamic economic system. We want inequality because that defines opportunity. A healthy economic system produces disparities due to prices, risk and value. Such [...]
Now that home sales have bounced off the winter lows, we can analyze the real estate market outside of the excuses and distractions. There is no question that May’s sales rate was far better than January or February, but once again that is an amazingly low standard of comparison. In fact, May 2014’s SAAR is pretty much the same as [...]
In addition to continued retrenchment in housing construction (and likely sales as we will see next week) mortgage applications absolutely plunged again this week. According to the latest estimates from the Mortgage Bankers Association, their application index fell 9.2% from the prior week. That’s a pretty large drop reminiscent of the worst financial days last fall. Refis, as has been [...]
When home sales rose M/M (slightly) in April for the first time in 2014, the NAR theorized it as the turnaround signal. Their reasoning for it was strange in the context of basic, intuitive economics (meaning non-textbook). Rising prices on too few available homes for sale was supposed to signal more construction, as this shortage narrative was perhaps the only [...]
The quarterly update of the Flow of Funds Report (now called the Financial Accounts of the United States, but still Z1) means we can update a couple measures of stock market exuberance – Tobins Q and Market Value of Equities compared to GDP. The delay in preparing and releasing the data, however, means staleness since the latest estimates are for [...]
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