FHFA Monthly Home Prices: October 2011

Today, the Federal Housing Finance Agency (FHFA) released the latest results of their monthly house price index (HPI) showing that, nationally, home prices declined 0.21% since September and declined 3.16% below the level seen in October 2010.

The FHFA monthly HPI are formulated from home purchase information collected from mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac.

Radar Watching: October 2011

As I have noted in the past, since the home price index data provided by Radar Logic is more timely, unadjusted and un-smoothed it is particularly useful for gaining deeper visibility over our housing markets.

As for the latest trends, it’s important to note that the 25-MSA Composite is continuing to show significant year-over-year declines and, after having broken well below the low set in March of 2009 (double-dipping) earlier this year and then rising throughout the spring/summer selling season, is now clearly in decline as the data moves into the period of the year with the least number of transactions.

The latest data shows that as of October, prices have declined 4.33% below the level seen in October 2010 while continuing to turn down from a seasonal peak reached in mid-June.

With the spring/summer selling season now complete and declining prices now registering with regularity, there is nowhere for prices to go but down. Look for a declining trend to continue to materialize and likely run into March or April of 2012.

S&P/Case-Shiller: September 2011

Note... be sure to bookmark the overall S&P/Case-Shiller Dashboard or the Scary Housing Dashboard of the weakest markets for a real-time view of all the markets tracked by S&P.

Today’s release of the S&P/Case-Shiller (CSI) home price indices for September reported that the non-seasonally adjusted Composite-10 price index declined 0.42% since August while the Composite-20 index declined 0.64% over the same period with both measures continuing to decline notably since last year.

The latest CSI data clearly indicates that the price trends are experiencing a declining trend into the typically less active summer and fall season and as I recently pointed out, the more timely and less distorted Radar Logic RPX data is starting to capture notable falling prices driven primarily by seasonality.

The 10-city composite index declined 3.27% as compared to August 2010 while the 20-city composite declined 3.59% over the same period.

Topping the list of regional peak decliners was Las Vegas at -60.05%, Phoenix at -55.93%, Miami at -50.22%, Tampa at -46.50% and Detroit at -42.41%.

Additionally, both of the broad composite indices show significant peak declines slumping -31.18% for the 10-city national index and -31.26% for the 20-city national index on a peak comparison basis.

To better visualize today’s results use Blytic.com to view the full release.

The following charts (click for larger version) shows the percent change to single family home prices given by the Case-Shiller Indices as compared to each metros respective price peak set between 2005 and 2007 as well as annual and monthly changes.

Additionally, in order to add some historical context to the perspective, I updated my “then and now” CSI charts that compare our current circumstances to the data seen during 90s housing decline.

To create the following annual and normalized charts I simply aligned the CSI data from the last month of positive year-over-year gains for both the current decline and the 90s housing bust and plotted the data side-by-side (click for larger version).

The “peak” chart compares the percentage change, comparing monthly CSI values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

FHFA Monthly Home Prices: September 2011

Today, the Federal Housing Finance Agency (FHFA) released the latest results of their monthly house price index (HPI) showing that, nationally, home prices increased 0.94% since August but declined 2.52% below the level seen in September 2010.

The FHFA monthly HPI are formulated from home purchase information collected from mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac.

More Pain, Less Gain: S&P/Case-Shiller Preview for September 2011

As I demonstrated in prior posts, given their strong correlation, the home price indices provided daily by Radar Logic, averaged monthly, can effectively be used as a preview of the monthly S&P/Case-Shiller home price indices.

The current Radar Logic 25 MSA Composite data reported on residential real estate transactions (condos, multi and single family homes) that settled as late as September 26 and averaged for the month indicates that with the slowing summer/fall transactions has come a notable decline of prices (the typical trend) with the national index declining 1.43% since August and falling 4.80% below the level seen in September 2010.

The Radar Logic index will likely be capturing an decline in prices from now until early 2012 as transactions continue to trend down.

Look for tomorrow's S&P/Case-Shiller home price report to reflect this declining trend though to a lesser degree due to its three month rolling-average nature with prices moderately higher.

New Home Sales: October 2011

Today, the U.S. Census Department released its monthly New Residential Home Sales Report for October showing a monthly increase with sales climbing 1.3% since September and increase 8.87% above the level seen in October of 2010 and remaining at an epically low level of 307K SAAR units.

It's important to recognize that the inventory of new homes has now fallen to a new series low at 162K units, lowest level seen in in at least 47 years while the median number of months for sale declined to 7.4.

The monthly supply remained declined to 6.3 months while the median selling price increased 0.04% and the average selling price declined 0.05% from the year ago level.

The following chart show the extent of sales decline to date (click for full-larger version).

Conspicuous Correlation: Retail Sales October 2011

Today, the U.S. Census Bureau released its latest nominal read of retail sales showing a 0.5% increase from September and an increase 7.2% on a year-over-year basis on an aggregate of all items including food, fuel and healthcare services.

Nominal "discretionary" retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales increased 0.86% from September and increased 3.79% above the level seen in October 2010 while, adjusting for inflation, “real” discretionary retail sales increased 0.12% over the same period.

On a “nominal” basis, there had appeared to be “rough correlation” between strong home value appreciation and strong retail spending preceding the housing bust and an even stronger correlation when home values started to decline.

The following chart shows the year-over-year change to nominal discretionary retail sales and the year-over-year change to nominal the S&P/Case-Shiller Composite home price index since 1993 and since 2000.

As you can see there is, at the very least, a coincidental change to home values and consumer spending during the boom and then the bust, but as home values have continued to decline, retail spending has remained low but has not continued to consistently contract.

Looking at the chart below (click for full-screen dynamic version), adjusted for inflation (CPI for retail sales, CPI “less shelter” for S&P/Case-Shiller Composite) the “rough correlation” between the year-over-year change to the “discretionary” retail sales series and the year-over-year S&P/Case-Shiller Composite series seems now even more significant.

Radar Watching: September 2011

As I have noted in the past, since the home price index data provided by Radar Logic is more timely, unadjusted and un-smoothed it is particularly useful for gaining deeper visibility over our housing markets.

As for the latest trends, it’s important to note that the 25-MSA Composite is continuing to show significant year-over-year declines and, after having broken well below the low set in March of 2009 (double-dipping) earlier this year and then rising throughout the spring/summer selling season, is now clearly in decline as the data moves into the period of the year with the least number of transactions.

The latest data shows that as of September, prices have declined 4.42% below the level seen in September 2010 while continuing to turn down from a seasonal peak reached in mid-June.

With the spring/summer selling season now complete and declining prices now registering with regularity, there is nowhere for prices to go but down. Look for a declining trend to continue to materialize and likely run into March or April of 2012.

Pending Home Sales: September 2011

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for September showing that home sales declined with the seasonally adjusted national index dropping a notable 4.6% since August but increasing 6.4% above the level seen in September 2010.

Meanwhile, the NARs chief economist Lawrence Yun suggests that home buyers were sidelined by weak confidence in the economy and confusing policy coming out of the Fed while the most likely explanation for the latest round of weak results is that buyers simply see that prices are headed lower.... Who in this economy would leverage up significant debt to buy an asset that is clearly still declining in value?

"A combination of weak consumer confidence and continuing tight lending criteria held back home buyers, even though the private sector added nearly 2 million net new jobs in the past 12 months ... America’s monetary policy is contradictory and confusing, where some consumers with the best financial capacity and top-notch credit scores pay higher mortgage interest rates ... The Federal Reserve evidently has been attempting to lower mortgage rates, yet more consumers are faced with taking out jumbo loans that carry higher interest rates. ... Just leaving excessive cash to sit in banks and not work into the economy is a drag on the overall recovery ... We need a comprehensive approach to address housing issues – not additional impediments."

The following chart shows the seasonally adjusted national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version).

FHFA Monthly Home Prices: August 2011

Today, the Federal Housing Finance Agency (FHFA) released the latest results of their monthly house price index (HPI) showing that, nationally, home prices declined 0.11% since July and declined 4.16% below the level seen in August 2010.

The FHFA monthly HPI are formulated from home purchase information collected from mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac.

Conspicuous Correlation: Retail Sales September 2011

Today, the U.S. Census Bureau released its latest nominal read of retail sales showing a notable 1.1% increase from August and climbing 7.9% on a year-over-year basis on an aggregate of all items including food, fuel and healthcare services.

Nominal "discretionary" retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales increased 0.36% from August and increased 3.54% above the level seen in September 2010 while, adjusting for inflation, “real” discretionary retail sales declined 0.33% over the same period.

On a “nominal” basis, there had appeared to be “rough correlation” between strong home value appreciation and strong retail spending preceding the housing bust and an even stronger correlation when home values started to decline.

The following chart shows the year-over-year change to nominal discretionary retail sales and the year-over-year change to nominal the S&P/Case-Shiller Composite home price index since 1993 and since 2000.

As you can see there is, at the very least, a coincidental change to home values and consumer spending during the boom and then the bust, but as home values have continued to decline, retail spending has remained low but has not continued to consistently contract.

Looking at the chart below (click for full-screen dynamic version), adjusted for inflation (CPI for retail sales, CPI “less shelter” for S&P/Case-Shiller Composite) the “rough correlation” between the year-over-year change to the “discretionary” retail sales series and the year-over-year S&P/Case-Shiller Composite series seems now even more significant.

Radar Watching: August 2011

As I have noted in the past, since the home price index data provided by Radar Logic is more timely, unadjusted and un-smoothed it is particularly useful for gaining deeper visibility over our housing markets.

As for the latest trends, it’s important to note that the 25-MSA Composite is continuing to show significant year-over-year declines and, after having broken well below the low set in March of 2009 (double-dipping) earlier this year and then rising throughout the spring/summer selling season, now trends clearly appear to have topped out as the peak summer activity is firmly established.

The latest data shows that as of mid-August, prices have declined 4.52% below the level seen in August 2010 while continuing to turn down from a seasonal peak reached in mid-June.

With the spring/summer selling season now complete and sliding prices now registering with regularity, there is nowhere for prices to go but down. Look for a declining trend to continue to materialize and likely run into March or April of 2012.

S&P/Case-Shiller: July 2011

Note... be sure to bookmark the overall S&P/Case-Shiller Dashboard or the Scary Housing Dashboard of the weakest markets for a real-time view of all the markets tracked by S&P.

Today’s release of the S&P/Case-Shiller (CSI) home price indices for July reported that the non-seasonally adjusted Composite-10 price index increased 0.88% since June while the Composite-20 index increased 0.91% over the same period with both measures continuing to decline notably since last year.

The latest CSI data clearly indicates that the price trends are experiencing a bit of a lift into the typically more active spring and early summer season but, as I recently pointed out, the more timely and less distorted Radar Logic RPX data is starting to capture falling prices driven primarily by seasonality.

The 10-city composite index declined 3.70% as compared to July 2010 while the 20-city composite declined 4.11% over the same period.

Topping the list of regional peak decliners was Las Vegas at -59.33%, Phoenix at -55.79%, Miami at -49.75%, Tampa at -45.56% and Detroit at -43.30%.

Additionally, both of the broad composite indices show significant peak declines slumping -30.96% for the 10-city national index and -30.87% for the 20-city national index on a peak comparison basis.

To better visualize today’s results use Blytic.com to view the full release.

The following charts (click for larger version) shows the percent change to single family home prices given by the Case-Shiller Indices as compared to each metros respective price peak set between 2005 and 2007 as well as annual and monthly changes.

Additionally, in order to add some historical context to the perspective, I updated my “then and now” CSI charts that compare our current circumstances to the data seen during 90s housing decline.

To create the following annual and normalized charts I simply aligned the CSI data from the last month of positive year-over-year gains for both the current decline and the 90s housing bust and plotted the data side-by-side (click for larger version).

The “peak” chart compares the percentage change, comparing monthly CSI values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

More Pain, Less Gain: S&P/Case-Shiller Preview for July 2011

As I demonstrated in prior posts, given their strong correlation, the home price indices provided daily by Radar Logic, averaged monthly, can effectively be used as a preview of the monthly S&P/Case-Shiller home price indices.

The current Radar Logic 25 MSA Composite data reported on residential real estate transactions (condos, multi and single family homes) that settled as late as July 25 and averaged for the month indicates that with the slowing summer transactions has come a flattening of prices (the typical trend) with the national index remaining unchanged since June but still remaining 4.66% below the level seen in July 2010.

The Radar Logic index will likely be capturing an decline in prices from now until early 2012 as transactions continue to trend down.

Look for tomorrow's S&P/Case-Shiller home price report to reflect this flattening trend though to a lesser degree due to its three month rolling-average nature with prices moderately higher.

FHFA Monthly Home Prices: July 2011

Today, the Federal Housing Finance Agency (FHFA) released the latest results of their monthly house price index (HPI) showing that, nationally, home prices increased 0.80% since June but declined 3.53% below the level seen in July 2010.

The FHFA monthly HPI are formulated from home purchase information collected from mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac.

Hong Kong Bubble?: Hong Kong Residential Property Prices July 2011

Today, the University of Hong Kong released their Hong Kong Residential Real Estate Series (HKU-REIS) indicating that, in July, the price of residential properties declined 0.65% since June but climbed 25.97% above the level seen in July 2010.

It appears that after a stunning run of monthly increases that saw prices increase dramatically, prices are beginning to show a pullback of sorts with the most measures declining on the month while the Island component showed the largest monthly pullback since 2008.

The HKU-REIS is a set of property price indices constructed monthly using a “modified” repeat-sale methodology similar to that of the S&P/Case-Shiller indices yet suited to the Hong Kong property market.

Conspicuous Correlation: Retail Sales August 2011

Today, the U.S. Census Bureau released its latest nominal read of retail sales showing very little change since July but but increasing 7.2% on a year-over-year basis on an aggregate of all items including food, fuel and healthcare services.

Nominal discretionary retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales increased 0.33% from July and increased 3.28% above the level seen in August 2010 while, adjusting for inflation, “real” discretionary retail sales declined 0.09% over the same period.

On a “nominal” basis, there had appeared to be “rough correlation” between strong home value appreciation and strong retail spending preceding the housing bust and an even stronger correlation when home values started to decline.

The following chart shows the year-over-year change to nominal discretionary retail sales and the year-over-year change to nominal the S&P/Case-Shiller Composite home price index since 1993 and since 2000.

As you can see there is, at the very least, a coincidental change to home values and consumer spending during the boom and then the bust, but as home values have continued to decline, retail spending has remained low but has not continued to consistently contract.

Looking at the chart below (click for full-screen dynamic version), adjusted for inflation (CPI for retail sales, CPI “less shelter” for S&P/Case-Shiller Composite) the “rough correlation” between the year-over-year change to the “discretionary” retail sales series and the year-over-year S&P/Case-Shiller Composite series seems now even more significant.