The Housing Chronicles Blog

Friday, March 16, 2018

JOLTS: January job openings spike up 11.4 percent while hires rose by just 1.1 percent

The number of job openings rose 11.4 percent to 6.3 million on the last business day of January. Over the month, however, hires rose by just 1.1 percent to 5.6 million, while separations rose by 1.8 percent to 5.4 million.

February industrial production rebounded 1.1 percent from January

Industrial production rose 1.1 percent in February following a decline of 0.3 percent in January. Manufacturing production increased 1.2 percent in February, its largest gain since October. Capacity utilization for the industrial sector climbed 0.7 percentage point in February to 78.1 percent, its highest reading since January 2015 but still 1.7 percentage points below its long-run (1972–2017) average.


Consumer sentiment rises to highest level since 2004 in early read, but upper-income households more wary

Consumer sentiment rose in early March to its highest level since 2004 due to a new all-time record favorable assessment of current economic conditions. All of the gain in the Sentiment Index was among households with incomes in the bottom third (+15.7), while the economic assessments of those with incomes in the top third posted a significant monthly decline (-7.3).

The decline among upper income consumers was focused on the outlook for the economy and their personal finances. In early March, favorable mentions of the tax reform legislation were offset by unfavorable references to the tariffs on steel and aluminum-each was spontaneously cited by one-in-five consumers. Importantly, near term inflation expectations jumped to their highest level in several years, and interest rates were expected to increase by the largest proportion since 2004.

Among the top-third income households, income expectations fell more and inflation expectations rose more; as these households account for more than half of all consumption expenditures, the data suggest that the relative lull in consumption in the 1st quarter may persist for another quarter.


February housing starts down 7.0 percent from January and 4.0 percent year-on-year

Privately-owned housing starts in February were at a seasonally adjusted annual rate of 1,236,000. This is 7.0 percent below the revised January estimate of 1,329,000 and is 4.0 percent below the February 2017 rate of 1,288,000.

February building permits tumbled 5.7 percent from January but still up 6.5 percent year-on-year

Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,298,000. This is 5.7 percent below the revised January rate of 1,377,000, but is 6.5 percent above the February 2017 rate of 1,219,000.

Thursday, March 15, 2018

4Q 2017 home loans down 20 percent from 3Q and 19 percent year-on-year

According to ATTOM Data Solutions, the number of residential property loans made in 4Q 2017 was down 20 percent from the previous quarter as well as down 19 percent from a year ago.  However, construction loans were up 12 percent from the third quarter and up 33 percent year-on-year, indicating more robust remodeling activity as well as rebuilding efforts after last year’s hurricanes.

Gallup: More Americans see AI as a greater threat than immigration and offshoring

More than half of Americans (58%) say technology poses a greater threat to jobs in the U.S. over the next decade, while 42% see immigration and offshoring as the greater threat. Republicans, who see immigration and offshoring as roughly an equal threat as technology, are the only subgroup of Americans not to see technology as a greater threat.

Philadelphia Fed's Business Outlook Survey dips to 22.3 in March but still in positive territory

Findings from the Philadelphia Federal Rerserve Manufacturing Business Outlook Survey suggest continued growth for the region's manufacturing sector. Although the survey's index for general activity moderated, the indexes for new orders and shipments improved. The survey's future indexes, measuring expectations for the next six months, reflected continued optimism.


March Empire State Manufacturing Survey rises nine points to 22.5

Business activity grew robustly in New York State, according to firms responding to the March 2018 Empire State Manufacturing Survey. The headline general business conditions index climbed nine points to 22.5.


Initial unemployment claims fall by 4,000 in weekly report

In the week ending March 10, initial unemployment claims were 226,000, a decrease of 4,000 from the previous week's revised level. The 4-week moving average was 221,500, a decrease of 750 from the previous week's revised average.


Mortgage applications rise 0.9 percent in weekly report, average rates rise to 4.69 percent

The Market Composite Index increased 0.9 percent on a seasonally adjusted basis from one week earlier, with purchase loans up 3 percent and refinance activity falling 2 percent. The average contract interest rate for 30-year fixed-rate mortgages increased to its highest level since January 2014, 4.69 percent.


Bloomberg: Consumer Comfort Index slips to 56.2 but still near highest level since 2001

U.S. consumer sentiment eased slightly last week to 56.2 while hovering near its highest level since 2001, as job gains drive Americans' confidence in their financial situation.


February new home mortgage applications up 3.0 percent from January and 4.6 percent year-on-year

The Mortgage Bankers Association (MBA) Builder Applications Survey (BAS) data for February 2018 shows mortgage applications for new home purchases increased 4.6 percent compared to February 2017. Compared to January 2018, applications increased by 3 percent. This change does not include any adjustment for typical seasonal patterns.


March builder confidence edges down one point to 70

Builder confidence in the market for newly-built single-family homes edged down one point to a level of 70 in March. The HMI component gauging current sales conditions held steady at 77, the chart measuring sales expectations in the next six months dropped two points to 78, and the index gauging buyer traffic fell three points to 51.


Data, Data Every Where/Nor any Drop to Drink: Making Sense of the Economic Data Deluge

In his lengthy 1798 poem “The Rime of the Ancient Mariner,” Samuel Taylor Coleridge tells the story of a group of sailors stranded at sea, surrounded by salt water they cannot drink and writing, “Water, water everywhere, nor any drop to drink.”

This famous line also seemed like an apt metaphor for the deluge of economic data which is now routinely released on a regular basis by a variety of government and private sources. In other words, how can you trust what you ingest?

It’s a fair question.  Over the last decade, as the number of traditional newsroom jobs has been cut by nearly half, Americans increasingly get their news from social media, television, Web sites and talk radio.  Since most of these sources are now oriented towards maximizing clicks, eyeballs and ears, even traditional economic updates are sometimes subject to spin versus true objectivity. Another issue is the sheer volume of economic data sliced and diced for different stakeholders, demographics and geographies.

For a simple way to ensure you don’t miss out on important economic news, the current edition of the free BuilderBytes e-newsletter by Peninsula Publishing regularly tracks 60 or more economic indicators each month. These are almost all national in scope, provide a link to the original source, and are generally relevant in some way to the housing industry.  The newsletter also features scores of other stories with links on finance, green building, design, affordable housing and more.

If you require a more detailed analysis, there’s certainly no shortage of relatively affordable, ‘data buffet’ services offering a smorgasbord of economic data at the national level.  But, much like a food smorgasbord, you still need to invest the time to locate, sample and collect the data that you want.  These data buffets also generally lack data at smaller geographic levels including MSAs, counties and cities.

Once you’re focused on the MSA, county or city level, the data search becomes more difficult or even proprietary in nature, which is why subscriptions can be pricey and custom reports produced by consultants or economists can easily run into thousands of dollars.  But in today’s connected world, the alternatives to these options have never been more numerous.

For example, if you want to review housing trends for a market you’re thinking of entering, Web sites for Zillow, Trulia, Redfin and various Associations of Realtors® offer everything from sales and inventory to market health and new home absorption rates.  If you want to review the local job market, government sources can usually tell you everything from job growth and unemployment applications to labor participation rates and median wages by industry.

If you’re looking for an overview of regional economic conditions, many of the 12 Federal Reserve Banks release their own monthly summaries and surveys covering their assigned areas, often including individual states and MSAs.  Some of these surveys, such as those done by the banks in New York and Philadelphia, are economic bellwethers closely monitored by Wall Street.

If you want to target hot new submarkets for future growth, government sources can tell you where population growth is outpacing building permits or where retail sales are suddenly surging.  For commercial real estate markets, many large brokerages maintain their own research departments, tracking everything at the submarket level from monthly rents to vacancy rates.

In other words, while you may have to pay an expert sleuth for finding, curating and analyzing data, you don’t necessarily have to pay for the data itself.

Still, many private sources do act as a check on official government indicators. For example, payroll processor ADP releases its own estimate of private sector job growth in advance of official government statistics, and both Gallup and The Conference Board regularly track monthly employment trends, employee engagement and the number of job vacancies advertised online.

For the housing market, the NAHB, NAR and MBA maintain regular updates on not just mortgage applications, home sales and prices, but also builder, seller and buyer sentiment. 

We are very lucky in the United States to have governments at the national and state levels which are very serious about collecting sophisticated data at various geographic levels.  This is certainly not the case in most of the world.

But much of this data, especially collected by the Census Bureau and elsewhere at the Department of Commerce, is under threat due to budget cuts, so it’s important for stakeholders to let their representatives know how crucial this data is for the business of building homes.

Because if ingestible information is power, then so is success.