In January, 3.08% of non-credit enhanced loans went seriously delinquent while the level was 9.03% of credit enhanced loans resulting in an overall total single family delinquency of 3.90%.
The following charts (click for larger ultra-dynamic and surf-able chart) show what Fannie Mae terms the count of “Seriously Delinquent” loans as a percentage of all loans on their books.
It’s important to understand that Fannie Mae does NOT segregate foreclosures from delinquent loans when reporting these numbers.
Today, the U.S. Census Bureau released their latest read of construction spending showing improvement from near-cycle low levels of spending in January for residential construction while indicating a slight pullback for total non-residential spending.
On a month-to-month basis, total residential spending increased 1.78% from December and rose 6.73% above the level seen in January 2011 while remaining a whopping 62.50% below the peak level seen in 2006.
Single family construction spending increased 2.46% since December and rose 5.48% since January 2011 but remained a whopping 75.78% below it's peak in 2006.
Non-residential construction spending declined 1.54% since December but climbed a whopping 16.60% above the level seen in January 2011 but remained a whopping 33.14% below the peak level reached in October 2008.
The following charts (click for larger dynamic versions) show private residential construction spending, private residential single family construction spending and private non-residential construction spending broken out and plotted since 1993 along with the year-over-year, month-to-month and peak percent change to each since 1994 and 2000 – 2005.
Yesterday, the Institute for Supply Management released their latest Non-Manufacturing Report on Business indicating that service related business activity improved throughout February with the business activity component climbing notably while the overall non-manufacturing index increased to 57.3 from 56.8 in January.
At 62.6 the business activity index increased 5.21% since January but remained 6.43% below the level seen a year earlier.
Like releases of prior months, non-manufacturing sector respondents are seeing some signs of improvement but the overall outlook is still fairly mixed:
"Year-over-year and month-over-month growth continues. Market conditions improved dramatically." (Information)
"Although customer traffic continues to decline, discretionary spending per capita is increasing. There is a bit more confidence regarding current economic conditions, spurring on slightly more aggressive marketing to capture new customers and encourage repeat visits." (Arts, Entertainment & Recreation)
"Business is generally flat, but showing signs of improvement." (Health Care & Social Assistance)
"Bracing for impact of fuel price increases on delivered commodity prices." (Educational Services)
"Optimism is all around, but sales remain sluggish. Activity shows interest, but market [is] very price sensitive." (Professional, Scientific & Technical Services)
"Signs are building that things are starting to settle and business is stabilizing. Although orders aren't increasing rapidly, they are steady and consistent instead of the radical swings of the past two years. We hope that this trend will continue." (Retail Trade)
"Demand [is] gradually increasing for most business sectors." (Wholesale Trade)
As a logical consequence of the prolonged economic downturn it appears that participation in the federal food stamp program is continuing to rise.
In fact, household participation has been climbing so steadily that it has far surpassed the last peak (which looks like a minor blip by comparison) set as a result of the immediate fallout following hurricane Katrina.
The latest data released by the Department of Agriculture shows that in December, 227,922 recipients were added to the food stamps program with the current total increasing 5.52% on a year-over-year basis while household participation increased 7.23%.
Individual participation as a ratio of the overall civilian non-institutional population has increased 4.84% over the same period.
Participation continues to increase with nominal benefit costs climbing a lofty 5.57% on a year-over-year basis to $6.22 billion for the month.
Yesterday's jobless claims report showed that both initial and continued unemployment claims declined slightly while seasonally adjusted initial claims continued to trend well below the closely watched 400K level.
Seasonally adjusted “initial” declined to 351,000 claims from last week’s revised 353,000 claims while seasonally adjusted “continued” claims declined by 2,000 resulting in an “insured” unemployment rate of 2.7%.
Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.
Currently there are some 3.37 million people receiving federal “extended” unemployment benefits.
Taken together with the latest 4.01 million people that are currently counted as receiving traditional continued unemployment benefits, there are 7.38 million people on state and federal unemployment rolls.
Yesterday, the Bureau of Economic Analysis (BEA) released their second "estimate" of the Q4 2011 GDP report showing that the economy continued to expand at a faster pace than originally estimated with real GDP increasing at an annualized rate of 3.0% from Q3 2011.
On a year-over-year basis real GDP increased 1.62% while the quarter-to-quarter non-annualized percent change was 0.74%.
The latest quarterly results indicate that the most notable source of weakness in the economy came from government defense spending which declined at a rate of 12.1% from Q3 while change in private nonfarm inventories made notable contributions accounting for 1.87% of the percent change of final real GDP while providing the majority of the 20.6% quarter-to-quarter rate of change for the entire Gross Private Domestic Investment category.
That very same category also saw fixed residential investment expand at a rate of 11.5% while fixed non-residential structures declined at a rate of 2.6% over the same period.
Keep in mind that these results are likely very poorly estimated and are sure to be revised notably in following quarters and even years to come.
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 2 basis points to 3.965% since last week while the purchase application volume increased 0.9% and the refinance application declined 2.2% over the same period.
With rates trending ever lower, the economy weak and the FOMC members remaining dovish, 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).
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.
The latest release of the S&P/Case-Shiller (CSI) home price indices for December reported that the non-seasonally adjusted Composite-10 price index declined 1.08% since November while the Composite-20 index declined 1.11% over the same period resulting in the lowest level seen to on the Composite-10 since June 2003 and the largest peak decline seen since the nearly six year old housing bust began in 2006.
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 continuing to capture notable falling prices driven primarily by seasonality.
The 10-city composite index declined 3.94% as compared to December 2010 while the 20-city composite declined 3.99% over the same period.
Topping the list of regional peak decliners was Las Vegas at -61.36%, Phoenix at -55.19%, Miami at -50.97%, Tampa at -47.47% and Detroit at -46.17%.
Additionally, both of the broad composite indices show significant peak declines slumping -33.76% for the 10-city national index and -33.80% for the 20-city national index on a peak comparison basis.
Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for January showing that pending home sales improved with the seasonally adjusted national index climbing 2% since December while increasing 8% above the level seen in January 2011.
Meanwhile, the NARs chief economist Lawrence Yun suggests that today's results indicates "stabilization" for prices and increased activity for the year.
“Given more favorable housing market conditions, the trend in contract activity implies we are on track for a more meaningful sales gain this year. With a sustained downtrend in unsold inventory, this would bring about a broad price stabilization or even modest national price growth, of course with local variations.”
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).
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 above chart show the extent of sales decline to date (click for full-larger version).