Joe Calhoun passed along the data for residential remodeling permits (according to the BuildFax Remodeling Index) for November 2013 (latest data available) and it was ugly. Total permits issued were 2,542,000 (seasonally-adjusted annual rate), 20% below October and 18% lower than November 2012. As usual, this "unexpected" decline, actually collapse, had a convenient though not-convincing excuse. "We saw a lower-than-expected [...]
In early 2010, economists had been delivered a twin bill of economic accounts that seemed to confirm recovery. GDP for the fourth quarter of 2009 had been initially estimated at close to 6% and employment appeared to finally be bottoming out. The pace of GDP expansion even led to talk about that infamous V-shaped recovery of the plucking model. It [...]
Finally, after several months of delays, the Census Bureau has obtained enough survey information to publish the full picture of real estate construction. And it is historic. Coming on the day when mortgage applications drop to a fifteen year low, the data presented does not disappoint the buildup in suspense. First, though, the pace of the collapse in mortgages is [...]
The taper-driven bond selloff in May/June related to tightening in eurodollars and funding markets. As we know now, dollar conditions were extreme in some cases, leading to desperate turmoil across the globe. From the TIC flows, the pace of selling of dollar assets by foreign holders was epic back in June. What that tells us is foreign holders were unable [...]
After a wave of job cuts on the leading edge of the mortgage collapse, it seems that banks, after reporting huge volume declines, are cutting further. Bank of America announced a new round of cuts, adding 4,000 to the 9,000 that were let go in Q3. Wells Fargo just fired 925 workers in addition to the 5,300 downsized in Q3. [...]
Bank of America announced its corporate earnings and the results were similar to what we have seen from Wells Fargo, Citigroup and JP Morgan. Trading revenues took a hit on fixed income, but mortgage originations are way down. Throughout the conglomerate, total originations were $22.6 billion in Q3, down 11% from Q2. Revenue from mortgages dropped from $2.4 billion in [...]
In March, Wells Fargo CFO Timothy Sloan previewed the bank’s first quarter earnings. Noting that Wells had originated $524 billion worth of mortgages in 2012, he expected, as the industry did, volumes and profitability to come down a bit in 2013. He also added, “We love the mortgage business.” I don’t think he had the third quarter of 2013 in [...]
I think that the initial impulse driving FOMC concerns over “too much” monetary stimulus tied closely to three factors: repo markets, junk bonds and housing. Home prices in previous bubble markets have been on fire again, and in no way do those prices reflect actual supply and demand factors (they very much ignore basics like demographic trends). Prices reflected and [...]
Since monetary policy depends on credit to realize any kind of “wealth effect”, debt issuance and levels are thus secondary indications of non-organic consumer or household funds availability. Rising mortgage levels are not only consistent with rising home prices, but also the tendency of mortgages in that situation to allow home owners to capture and then use excess home equity [...]
While it appears the refi boom that began in early 2011, rising sharply throughout 2012, has tapered fully, the mortgage activity surrounding home purchases is also on the verge of joining that retrenchment. Year-over-year, mortgage applications for purchases are nearly flat and are receding to early 2012 levels. The big banks have begun reducing staff counts, a very convincing signal [...]
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