Tag Archives: housing

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How effective is monetary policy?Highly effective, according to the Governor of the Bank of England. In a speech earlier this week, Mark Carney robustly defended the Bank of England's record: "Simulations using the Bank’s main forecasting model suggest that the Bank’s monetary policy measures raised the level of GDP by around 8% relative to trend and lowered unemployment by 4 percentage points at their peak. Without this action, real wages would have been 8% lower, or around £2,000 per...

Down some, still depressed and going nowhere: MBA Mortgage ApplicationsHighlightsPurchase applications for home mortgages fell back by 1 percent in the March 18 week, bringing down the year-on-year increase to a still very strong 25 percent, though some loss of momentum in this component is evident. Refinancing applications continued in the decline of recent weeks, dropping 5 percent in the latest week despite a 1 basis point slip to 3.93 percent in the average rate for 30-year conforming...

Working their way a bit higher but still seriously depressed:With the year over year CPI increase now only 1% the Fed can only wait and see if headline will catch up to core and ‘justify’ their tightening bias. Consumer Price IndexHighlightsThe CPI core is showing pressure for a second month, up a higher-than-expected 0.3 percent in February with the year-on-year rate up 1 tenth to plus 2.3 percent and further above the Federal Reserve’s 2 percent line.Gains are once again led by health...

Just plain bad. Including last month’s downward revision. And, again, sales = income, and lower income means less to spend in the next period: Retail SalesHighlightsConsumer spending did not get off to a good start after all in 2016 as big downward revisions to January retail sales badly upstage respectable strength in February. January retail sales are now at minus 0.4 percent vs an initial gain of 0.2 percent. The two major sub-readings also show major downward revisions with ex-auto...

As previously suspected, last month’s higher print was just a bit of volatility on the way down, as per the chart: Chicago PMIHighlightsAnother month and another month of wild volatility for the Chicago PMI which lurched from solid expansion in January to noticeable contraction in February. At a headline 47.6, Chicago’s PMI has fallen outside Econoday’s consensus range for a third month in a row! Still, this report is closely watched and confirms other early indications of February...

Challenging to put a good spin on this one, but they gave it their best shot, as the wheels are coming off at every turn: New Home SalesHighlightsA downturn out West helped pull new homes sales down a steep 9.2 percent in January to a lower-than-expected annualized rate of 494,000. The level, however, is still respectable given that there is no revision to December which stands at a very solid 544,000. Sales in the West, which is a key region for the new home market, fell 32 percent in the...

From Joe Sarling's blog comes this a lovely chart showing housing affordability by cohort since 1955: As can be seen, the current generation of young people - Generation Y - faces paying a far higher proportion of their incomes in mortgages or rent than any previous cohort. This does not, of course, take into account the considerable price difference between London and everywhere else: if London were excluded, I suspect their position would not look quite so dire. Nonetheless, this chart is...

Purchase apps down again: MBA Mortgage ApplicationsHighlightsFalling mortgage rates continue to drive refinancing applications sharply higher, up 16 percent for a second straight week. Purchase applications, up 30 percent year-on-year, are also being driven higher though they declined 4 percent in the latest week. The average rate for 30-year conforming loans ($417,000 or less) fell 8 basis points in the week to 3.83 percent. Again, so much for what’s been forecast to be the ‘driver’ of...

A lot worse than expected and still deep in contraction: Empire State Mfg SurveyHighlightsFor the seventh straight month, the Empire State report is signaling significant contraction for the manufacturing sector. The general business conditions index for February came in below low-end expectations, at minus 16.64 vs even deeper contraction of minus 19.37 in January. New orders, at minus 11.63, are in contraction for a ninth month in a row while employment, though improving to minus 0.99...