HI-TRANSFER

Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing a flattening of most measures in March with the composite HMI index remaining unchanged at 28 while the "buyer traffic" index stayed put at 22.

While all indicators have made notable increases as of late, it's important to note that conditions still remain distressed by historic standards though, the last few months results appears to indicate a major change in the builder sentiment.

The new home market will likely not resume any significant form of healthy function until the considerable overhang of inventory is cleared.

Today, the U.S. Census Department released its monthly New Residential Home Sales Report for January showing a monthly decline with sales dropping 0.97% since December but rising 3.55% above the level seen in January 2011 and remaining at an historically low level of 321K SAAR units.

It's important to recognize that the inventory of new homes has now fallen to a new series low at 151K units, lowest level seen in in at least 47 years while the median number of months for sale increased to 7.1.

The monthly supply declined to 5.6 months while the median selling price declined 9.57% and the average selling price declined 5.11% from the year ago level.

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

Today, the Federal Housing Finance Agency (FHFA) released the latest results of their monthly house price index (HPI) showing that, nationally, home prices increased 0.71% since November and declined 1.32% below the level seen in December 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.

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for January showing an increase in sales with total home sales climbing 5.0% since November and 3.6% above the level seen in December 2010.

Single family home sales increased 3.8% from December and rose 2.3% above the level seen in January 2011 while the median selling price declined 2.6% below the level seen in January 2011.

Inventory of single family homes increased 1.5% from December dropping 18.9% below the level seen in January 2011 which resulted in a monthly supply of 6.1 months.

The following charts (click for full-screen dynamic version) shows national existing single family home sales, median home prices, inventory and months of supply since 2005.

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for December showing an increase in sales with total home sales climbing 5.0% since November and 3.6% above the level seen in December 2010.

Single family home sales increased 4.6% from November and rose 4.3% above the level seen in December 2010 while the median selling price declined 2.5% below the level seen in December 2010.

Inventory of single family homes declined 10.7% from November dropping 19.7% below the level seen in December 2010 which resulted in a monthly supply of 6.1 months.

The following charts (click for full-screen dynamic version) shows national existing single family home sales, median home prices, inventory and months of supply since 2005.

Today’s New Residential Construction Report showed that in December, both single family permits and starts increased from November with permits continuing to show tepid results when compared on a year-over-year basis while starts improved notably over the same period.

Single family housing permits, the most leading of indicators, increased 1.8% from last month to 444K single family units (SAAR), but declined 0.22% below the level seen in December 2010 and remaining an astonishing 75.31% below the peak in September 2005.

Single family housing starts increased 4.44% to 470K units (SAAR), and climbed 11.64% above the level seen in December 2010 but remaining a stunning 74.22% below the peak set in early 2006.

With the substantial headwinds of elevated unemployment, epic levels of foreclosure and delinquency, mounting bankruptcies, contracting consumer credit, and falling real wages, an overhang of inventory and still falling home prices, the environment for “organic” home sales remains weak and likely very fragile.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) declined 5 basis points to 3.98% since last week while the purchase application volume surged 10.3% and the refinance application jumped a whopping 26.40% over the same period.

With rates trending ever lower, the economy seemingly near recession and the FOMC members becoming more dovish by the day, it will be interesting to see how far rates on the long end can decline.  All things being equal, falling home prices, declining purchase applications and record low long lending rates all appear to indicate a deflationary for the macro-economy.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) increased 2 basis points to 4.03% since last week while the purchase application volume increased 8.10% and the refinance application increased 3.30% over the same period.

With rates trending ever lower, the economy seemingly near recession and the FOMC members becoming more dovish by the day, it will be interesting to see how far rates on the long end can decline.  All things being equal, falling home prices, declining purchase applications and record low long lending rates all appear to indicate a deflationary for the macro-economy.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).

Today, the U.S. Census Department released its monthly New Residential Home Sales Report for November showing a monthly increase with sales climbing 1.6% since October and 9.8% above the level seen in November of 2010 but remaining at an epically low level of 315K SAAR units.

It's important to recognize that the inventory of new homes has now fallen to a new series low at 158K units, lowest level seen in in at least 47 years while the median number of months for sale going flat at 7.4.

The monthly supply remained declined to 6.0 months while the median selling price declined 2.5% and the average selling price declined 13.77% from the year ago level.

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

Today, the University of Hong Kong released their Hong Kong Residential Real Estate Series (HKU-REIS) indicating that, in June, the price of residential properties increased 1.11% since May climbing 28.99% above the level seen in June 2010.



The “Hong Kong Island” index, “Kowloon” and “New Territories” sub-components also showed notable annual increases while the "Hong Kong Island" series indicated that prices declined slightly on the month still far outpacing the prior 1997 peak.



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.

Homebuilder stocks started to plunge in 2005, subprime lenders in late 2006 and on into 2007, banks and housing financed collapsed in 2008 and all along the way the traditional media had been littered with segments related to a looming turnaround in housing.

Even today, analysts routinely appear on cable TV calling bottoms to all things related to housing yet, we are currently trending through some of the weakest home sales and prices seen in a generation.

“Hope springs eternal” as they say…

But, here we are at another spring, the seventh in fact since things soured for housing, and we are still looking at housing to show us that things have turned around.

This must be some primal urge… like a pack of Bonobos waiting out a storm that has blow apart all their tree nests, we keep peeking around the corner to see if the furor is over.

I suppose this is just another indication of how fundamental housing is to an economy.

Without growth in housing, specifically increasing homeownership with stable and rising prices, an economy appears to be sluggish or even broken.

A healthy expansion in housing represents increasing living standards and a thriving population, a trend that is tantamount to an expansion jobs or real incomes.

With housing continuing on the rocks, it’s hard to feel truly confident.

But could this spring mark the turnaround like the pundits suggest? Could we be on the verge of a breakout in housing?! Is housing exciting again?!!

While early indications from Radar Logic show that prices appear to have hit a seasonal low at the end of February and with the spring surge of transactions will likely rise through the March-June reporting periods, we are still far from anything that could even remotely be considered a healthy housing sector.

Foreclosures are still mounting, 50% of all mortgages are underwater, there is an immense backlog of REOs and unsold new construction homes, and distress continues as an ever present function as supply and demand tips in favor of cautious, even indifferent buyers.

Make no mistake, the housing collapse was an epic disaster and will take many years to right.

In the meantime, we will likely see scattered periods of strength and weakness as the market churns through and clears the destruction against a backdrop of the numerous other notable macroeconomic factors.