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Paper Economy

As this chart shows, initial unemployment claims rose slightly but remained well below the 400,000 mark. Continued unemployment claims rose from the last week by 67,000 to 3.018 million. (SoldAtTheTop)

US unemployment claims move up

By Contributor / 08.09.13

Yesterday's jobless claims report showed increases to both initial and continued unemployment claims as initial claims trended well below the closely watched 400K level. 

Seasonally adjusted “initial” unemployment claims rose by 5,000 to 333,000 claims from 328,000 claims for the prior week while seasonally adjusted “continued” claims rose by 67,000 claims to 3.018 million resulting in an “insured” unemployment rate of 2.3%. 

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 1.51 million people receiving federal “extended” unemployment benefits. 

Taken together with the latest 2.92 million people that are currently counted as receiving traditional continued unemployment benefits, there are 4.44 million people on state and federal unemployment rolls. 

This chart shows the average rate for a 30 year fixed rate mortgage rose 3 basis points from last week, moving to 4.47 precent. (SoldAtTheTop)

Mortgage rates move up, settle down

By Contributor / 08.08.13

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 3 basis point to 4.47% since last week while the purchase application volume increased 1% and the refinance application volume went flat over the same period. 

Rates now appear to be settling a bit after weeks of explosive increases that saw a rise of over 100 basis points seemingly directly correlated with the Feds recent suggestion that they may start to wind down GSE purchases later this year.  

It appears now though that Chairman Bernanke's latest comments might have worked to provide a bit more clarity surrounding the Feds plans for QE thereby working to halt the recent run-up in rates.

This chart shows that conditions for Americans who have been unemployed for at least 27 weeks have gradually improved since 2009. (SoldAtTheTop)

Unemployment figures show recovery-less recovery

By Contributor / 08.03.13

Yesterday's employment situation report showed that conditions for the long term unemployed improved in July while still remaining distressed by historic standards.
Workers unemployed 27 weeks or more declined to 4.246 million or 37.0% of all unemployed workers, while the median term of unemployment declined to 15.7 weeks and the average stay on unemployment increased to 36.6 weeks.
Looking at the charts below, you can see that today’s sorry situation far exceeds even the conditions seen during the double-dip recessionary period of the early 1980s, long considered by economists to be the worst period of unemployment since the Great Depression.

This chart shows that in July, total unemployment (which includes all marginally attached workers) and traditionally reported unemployment both dropped. The figures reflect the slow but continuing improvement of the employment situation since 2008. (SoldAtTheTop)

US unemployment rate drops to 7.4 percent

By Contributor / 08.02.13

Today's Employment Situation report showed that in July, “total unemployment” including all marginally attached workers declined to 14.0% while the traditionally reported unemployment rate dropped to 7.4 percent.

The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit definition of “unemployed” (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively “on the margin” either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.

The Bureau of Labor Statistics considers “marginally attached” workers (including discouraged workers) and persons who have settled for part time employment to be “underutilized” labor.

The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.

To calculate the “total” rate of unemployment, we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.

Private employers added 200,000 jobs to the economy in July. Overall, the employment picture has improved since the same time last year. (SoldAtTheTop)

Private employers add 200,000 jobs in July

By Contributor / 08.01.13

Yesterday, private staffing and business services firm ADP released the latest installment of their National Employment Report indicating that the situation for private employment in the U.S. improved in July as private employers added 200,000 jobs in the month, bringing the total employment level 1.79% above the level seen in July 2012. 

Look for Friday’s BLS Employment Situation Report to likely show somewhat similar trends.

Overall, the average interest rate for fixed rate mortgages has gone down — a reversal of weeks of 'explosive increases.' The dip in rates may have been caused by Fed Chairman Ben Bernanke's hints that the Fed will ease back on its bond purchases later this year. (SoldAtTheTop)

Mortgage rates trending downwards

By Contributor / 07.31.13

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 1 basis point to 4.44% since last week while the purchase application volume declined 3% and the refinance application volume decreased 4% over the same period. 

Rates now appear to possibly be trending down after weeks of explosive increases that saw a rise of over 100 basis points seemingly directly correlated with the Feds recent suggestion that they may start to wind down GSE purchases later this year. 

It appears now though that Chairman Bernanke's latest comments might have worked to provide a bit more clarity surrounding the Feds plans for QE thereby working to halt the recent run-up in rates.

This chart shows the 10-City Case-Shiller Composite Index since 2000. Prices have recovered steadily since last year, but still remain well below peak 2006 levels. (SoldAtTheTop)

Case-Shiller: Home prices jump in May

By Guest blogger / 07.30.13

Today's release of the S&P/Case-Shiller (CSI) home price indices for May reported that the non-seasonally adjusted Composite-10 price index rose a notable 2.48% since April while the Composite-20 index also increased 2.44% over the same period. 

The latest CSI data is continuing to demonstrate significant resiliency compared to past years, as prices remained stable through the typically slow winter and early spring period and now appear to be rising notably through the more active late spring period. 

The 10-city composite index increased 11.82% as compared to May 2012 while the 20-city composite increased 12.17% over the same period. 

Both of the broad composite indices still show significant peak declines slumping -25.01% for the 10-city national index and -24.39% for the 20-city national index on a peak comparison basis. 

Pending home sales fell 0.4 percent from May but still grew 10.9 percent above figures reported in June 2012. Increasing interest rates likely contributed to the slight dip in sales, an economist suggests. (SoldAtTheTop)

Pending home sales down in June

By Guest blogger / 07.29.13

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for June showing that pending home sales declined with the seasonally adjusted national index falling 0.4% from May but increasing 10.9% above the level seen in June 2012. 

Meanwhile, the NARs chief economist Lawrence Yun is suggests that the recent run-up in interest rates worked to depress the latest read of contract activity: 

"Mortgage interest rates began to rise in May, taking some of the momentum out of contract activity in June, ... The persistent lack of inventory also is contributing to lower contract signings."

This chart shows the monthly value of the FHFA National House Price Index over the past decade. Prices have rebounded considerably since the market's nadir in early 2011 but are still nowhere near pre-bust levels. (SoldAtTheTop)

Home prices up in May

By Guest blogger / 07.25.13

Tuedsay, the Federal Housing Finance Agency (FHFA) released the latest results of their monthly house price index (HPI) showing that in May, nationally, home prices increased 0.68% from April and rose 7.24% above the level seen in May 2012.
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.

Buyers are continuing to reenter the housing market, and the housing market index — a measure of activity among homebuilders — kept up an upward trend in July. (SoldAtTheTop)

July: Good month for homebuilders

By Guest blogger / 07.17.13

(NAHB) released their latest Housing Market Index (HMI) showing that assessments of housing activity improved notably in July with the composite HMI index climbing to 57, the highest level seen since early 2006, while the "buyer traffic" index also improved, rising to a level of 45.

It's important to note that July continued to firmly reverse the weakening trend seen earlier in the year, suggesting that activity in the new home market has picked up notably and is remaining strong even beyond the traditionally strong first quarter period. 

Looking at the data, it is fairly clear that the last year of results indicate a major change in builder sentiment likely coming as a result of improvements in confidence given the notable rise in buyer traffic, reduced inventory and a more balanced monthly supply. 

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