by Calculated Risk on 1/23/2011 05:05:00 AM

Note: here is the busy economic Schedule for Week of January 23rd.

Below is a summary of the previous week, mostly in graphs.

• December Existing Home Sales: 5.28 million SAAR, 8.1 months of supply

Click on graph for larger image in graph gallery.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in December 2010 (5.28 million SAAR) were 12.3% higher than last month, and were 2.9% lower than December 2009.
The second graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Inventory is not seasonally adjusted, so it really helps to look at the YoY change.

Although inventory decreased from November to December, inventory increased 8.4% YoY in December. This is the largest year-over-year increase in inventory since January 2008 and this is something to watch closely over the next few months.

The bottom line: Sales rebounded in December to just above Tom Lawler's forecast. This was probably due to a combination of low mortgage rates, falling house prices - especially for distressed properties, and investor buying at the low end.

Inventory remains very high, and the year-over-year increase in inventory is very concerning.

• Housing Starts Declined in December

Total housing starts were at 529 thousand (SAAR) in December, down 4.3% from the revised November rate of 553 thousand, and up 11% from the all time record low in April 2009 of 477 thousand (the lowest level since the Census Bureau began tracking housing starts in 1959).

Single-family starts decreased 9.0% to 417 thousand in December - the lowest level since early 2009.

This graph shows total and single unit starts since 1968. This shows the huge collapse following the housing bubble, and that housing starts have mostly been moving sideways for two years - with slight ups and downs due to the home buyer tax credit.

There was an increase in permits, especially for multi-family units.

• AIA: Architecture Billings Index highest since December 2007

The American Institute of Architects (AIA) reported the December ABI score was 54.2, up from a reading of 52.0 in November. This graph shows the Architecture Billings Index since 1996. The index showed expansion in December (above 50) and this is the highest level since December 2007.

Note: Nonresidential construction includes commercial and industrial facilities like hotels and office buildings, as well as schools, hospitals and other institutions.

According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. So this indicator suggests the drag from CRE investment will end mid-year or so.

• NAHB Builder Confidence Remains Unchanged In January

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was unchanged at 16 in January.

This graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the January release for the HMI and the November data for starts.

This shows that the HMI and single family starts mostly move in the same direction although there is plenty of noise month-to-month. The HMI has mostly moved sideways - with some minor ups and downs - for over 2 years at a very depressed level.

• Other Economic Stories ...
• NMHC: Is the recovery real for apartments?
• Apartments: "Consensus has a high price"
• From the NY Fed Empire State Manufacturing Index shows "conditions improved" in January
• From the Philly Fed: January 2011 Business Outlook Survey
• From David Leonhardt at Economix: The Deficit We Want
• A hint of good employment news?
• Unofficial Problem Bank list increases to 937 Institutions

Best wishes to all!