Monday Morning Cup of Coffee: Housing data storm ahead

Can housing shake off the winter, spring and now summer doldrums?

August 25, 2014

Monday Morning Cup of Coffee takes a look at stories across the HousingWire news desk, with more coverage to come on bigger issues.

It’s a week of key housing data and metrics releases, and Monday kicks off bright and – not early but at 10 a.m. ET – with the report on new home sales for July.

New home sales came in at a paltry annual rate of 406,000 in June while the May reading, which was extraordinarily strong, was revised 62,000 lower to 442,000. June’s 8.1% drop was the biggest% decline in almost a year and followed an 8.3% boost the month before. All regions showed declines in June with the most important region, the South because of its overwhelming size in this report, posting a 9.5% drop. The drop in sales raised supply relative to sales, to 5.8 months versus May’s 5.2 months.

Tuesday will have both the Federal Housing Finance Agency home price index and the Case-Shiller home price index for June. After their performance in May, the June numbers will likely come up a little, but we’re not holding our breath for a breakaway.

The FHFA purchase only house price index, based on data from the GSEs, rose just 0.4% in May, and the year-on-year rate slowed by 6 tenths to plus 5.5% from a revised 6.1%. This rate had been in the 7.0% range earlier in the year. The regional breakdown shows special monthly weakness in East South Central and East North Central with gains in the West South Central and Middle Atlantic.

The S&P/Case-Shiller 20-city home price index unexpectedly declined in May at a seasonally adjusted minus 0.3% and followed a 0.1% rise the month before. May’s dip was the first negative reading since January 2012. Year-on-year, both adjusted and unadjusted, home prices were at plus 9.3%, down substantially from 10.8% and 12.4% in the two prior months. Unadjusted data showed deceptive strength, at a monthly plus 1.1%. But this reflected seasonal strength in the spring months for housing and was not a sign of pricing power.

The Conference Board’s consumer confidence survey for August is also due out Tuesday, and it often serves as an indicator for housing, though not nearly as much as mainstream financial reporters make it out to be. It’s like on CNN when they turn to an online poll asking “What do you think happened to the missing flight?” – interesting to know what people are thinking, but not that informative. (Look at the NAHB builder confidence survey with its regular overconfidence as an example.)

Thursday will give the industry the pending home sales index for July. It’s an index, not a data compilation, from the National Association of Realtors, but it’s a solid metric.

The pending home sales index for existing home sales came in at a solid 102.7 in June, healthy but down a bit from a revised 103.8 in May. The monthly percentage change, at minus 1.1%, followed a monthly 6.0% spike in May. The regional breakdown showed a dip in the South but a gain for the Midwest and a fractional gain for the West.

For all of these critical monthly reports, and the weekly mortgage application and mortgage rates reports, look to HousingWire for the first and best coverage.

Here’s your video laugh for Monday morning. It’s not an ice bucket challenge, but someone needs to pour cold water on whoever authorized this story at Fox Business News. This is like looking at five inches of data to extrapolate two miles of road.

Sometimes headlines astound for their obviousness, and sometimes they do it for hitting the target and yet still missing the point. “What if the Fed created a bubble?” This is sort of like asking, what if the reason today is hot is because of the sun?”, no?

Southlake is a suburb in HousingWire’s backyard, and this story from the Fort Worth newspaper on the large lot, spacious home suburb’s decision to decline, repeatedly, the construction of a bunch of zero-lot line houses is a commendable preservation of housing diversity. Usually when people want diversity in housing, they push the same old urban chic trends of higher density, public rail orientation, and the great god called walkable design. But some people like tree-lined avenues, larger lots and more elbowroom all around. Not every community has to bow to the urban hipster designers. And in a market as big as Dallas-Fort Worth, with its dozens of suburbs and exurbs, having a few that don’t bow to trends is a change.

How have QM and ATR affected the industry? The Fannie Mae Financial & Strategic Analysis Group launched the outcomes of a current survey of senior mortgage executives designed to see how mortgage lenders or would adapt to the CFPB’s rules, and here is a preview of the results.

No banks were reported closed by the Federal Deposit Insurance Corp. for the week ending August 22, 2014.

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