Pending Home Sales: March 2011

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for March showing home sales increasing with the seasonally adjusted national index climbing 5.1% since February while remaining 11.4% below the level seen in March 2010.

Meanwhile, the NARs chief economist Lawrence Yun continues to talk of market recovery while again griping about tight lending standards.

"Since reaching a cyclical bottom last June, pending home sales have posted an overall gain of 24 percent and demonstrate the market is recovering on its own, ... The index means modest near-term gains in existing-home sales are likely, which would be even stronger if tight mortgage lending criteria returned to normal, safe standards."

Looking at the confluence of truly hideous trends currently playing out for housing it's no wonder the NAR is grasping for any positive number but the writing is on the wall... housing is now within a notable post-government manipulated second dip.

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).

The Chicago Fed National Activity Index: March 2011

Today’s release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated that national economic activity increased in March with the index climbing to 0.26 while the three month moving declined slightly to 0.20.

The CFNAI is a weighted average of 85 indicators of national economic activity collected into four overall categories of “production and income”, “employment, unemployment and income”, “personal consumption and housing” and “sales, orders and inventories”.

The Chicago Fed regards a value of zero for the total index as indicating that the national economy is expanding at its historical trend rate while a negative value indicates below average growth.

A value at or below -0.70 for the three month moving average of the national activity index (CFNAI-MA3) indicates that the national economy has either just entered or continues in recession.

It’s important to note that at 0.20, the current three month average index value is indicating weak trend growth.

Bull Trip!: GDP Report Q1 2011 (First Rough Estimate)

Today, the Bureau of Economic Analysis (BEA) released their first "estimate" of the Q1 2011 GDP report showing that the economy continued to expand with real GDP increasing at an annualized rate of 1.8% from Q4 2010.

On a year-over-year basis real GDP increased 2.28% while the quarter-to-quarter non-annualized percent change was 0.43%.

The latest report reveals an notable decline in non-residential fixed investment with non-residential structures declining at a rate of 21.7% from the fourth quarter 2010 while residential fixed investment also declined falling at a rate of 4.1% over the same period.

Note that the administration (and the BEA) have yet to take down their estimates for Q2 residential fixed investment which still sits at the lofty level of a supposed 25.7% quarter-to-quarter change... not likely.... look for that figure to be revised down in coming releases impacting the anemic "final" Q2 2010 results.

Government expenditures declined notably with the national defense component declining at a rate of 11.7% from the fourth quarter 2010 and shaving 1.09% from overall GDP.