by Calculated Risk on 3/27/2012 07:06:00 PM

From CNBC: 'Best Spring in Five Years' for Housing: Toll CEO

It's been the "best spring in five years," [Toll Brothers CEO Douglas Yearley told CNBC]. In 2012 "our orders are up significantly and continue to be up significantly. I'm optimistic right now."
...
"25 percent of our communities have seen a price increase since Jan 1. That’s encouraging. There are places where we don’t have pricing power (but) we’re not dropping prices. We haven’t dropped prices in over a year."
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Phoenix is hot for housing, having gone from 14 to 16 months of supply down to four or five months. "In the last month, Phoenix is back in a big way," Yearley said.
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"We're bumping along the bottom in certain locations but we're clearly off the bottom in other locations," Yearley said.

This still hasn't shown up in the Census Bureau new home sales reports - but it will. Lennar reported sales up 33% year-over-year, Hovanian reported sales up 30% - however KB Home reported a decline in sales, though, as Tom Lawler noted today "KB Home’s surprise YOY drop in net orders for the quarter ended February 29th was company specific, and may have been related to its “preferred mortgage lender” issue."

Also the major homebuilders have probably gained share, so the increase will not be as sharp as some builders are reporting - but I expect to see a further increase in sales in the Census Bureau monthly report.

by Calculated Risk on 3/27/2012 06:29:00 PM

From the transcript:

CHAIRMAN BERNANKE: Well, we are in a recovery. The economy's been growing-- for almost three years. And we've had some good news lately. We've-- seen the unemployment rate come down. We've seen more jobs be created. And-- consumer and household-- and business sentiment have all improved, so that's all positive, but--

DIANE SAWYER: Strong?

CHAIRMAN BERNANKE: --we do have a long way to go. I-- I would say that we-- you know, it's-- it's far too early to declare victory. We have-- still 8.3% unemployment, that's-- that's too high. We've got a lot of people been un-- out of work for more than six months.
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DIANE SAWYER: Another quantitative easing on the table, always possible?

CHAIRMAN BERNANKE: Well, we don't take any options off the table. We don't know what's gonna happen in the future and we have to be prepared to respond to however the economy evolves. But again we have 17 people around the table. We look at the economy-- comprehensively and-- and review it-- at every meeting and we try to assess, you know, how much progress we're making and what else we can do that will help us achieve both the growth we want, the reduction in unemployment we want, but also maintain the price stability, the low inflation which is the other part of our mandate.
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DIANE SAWYER: I-- I want to just make sure I cover housing. And we're seeing these mixed signals on housing, housing prices still low, but we are seeing some-- up-tick in new house sales and also existing house sales. Have we hit bottom on housing?

CHAIRMAN BERNANKE: Well, housing remains-- a big concern for us. Normally in a recovery you would see housing growing much more quickly, construction-- housing related industries. So far housing is-- kinda still pretty flat. We have seen a few signs-- of-- of progress-- a few extra permits for construction. We see more construction in multi-family-- housing. More people are moving into apartment buildings for example. So there's a bit of-- a bit of a green shoot there if you-- if you will. But-- you know, we're not really yet in a full-fledged housing recovery. And you know, that will be part of-- the full recovery of the economy.

by Calculated Risk on 3/27/2012 02:58:00 PM

From ATA: ATA Truck Tonnage Increased 0.5% in February

The American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index rose 0.5% in February after falling 4.6% in January. (January’s decrease was more than the preliminary 4% drop we reported on February 28th.) The latest gain put the SA index at 119.3 (2000=100), up from January’s level of 118.7. Compared with February 2011, the SA index was up 5.5%, better than January’s 3.1% increase.
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“Fleets told us that February was decent and that played out in the numbers,” ATA Chief Economist Bob Costello said. Costello noted that February’s month-to-month increase was sixth in the last seven months.

“I’m still expecting continued truck tonnage growth going forward. Rising manufacturing activity and temperate consumer spending should be helped a little from an improving housing market,” he said.

Click on graph for larger image.

Here is a long term graph that shows ATA's For-Hire Truck Tonnage index.

The dashed line is the current level of the index. The index is above the pre-recession level and up 5.5% year-over-year. From ATA:

Trucking serves as a barometer of the U.S. economy, representing 67.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9 billion tons of freight in 2010. Motor carriers collected $563.4 billion, or 81.2% of total revenue earned by all transport modes.

All current Transportation Graphs
Earlier on House Prices:
• Case Shiller: House Prices fall to new post-bubble lows in January
• Real House Prices and Price-to-Rent Ratio decline to late '90s Levels
• All current house price graphs

by Calculated Risk on 3/27/2012 12:15:00 PM

Another Update: Case-Shiller, CoreLogic and others report nominal house prices. It is also useful to look at house prices in real terms (adjusted for inflation) and as a price-to-rent ratio.

Below are three graphs showing nominal prices (as reported), real prices and a price-to-rent ratio. Real prices, and the price-to-rent ratio, are back to late 1998 and early 2000 levels depending on the index.

Nominal House Prices

Click on graph for larger image.

The first graph shows the quarterly Case-Shiller National Index SA (through Q4 2011), and the monthly Case-Shiller Composite 20 SA and CoreLogic House Price Indexes (through January) in nominal terms as reported.

In nominal terms, the Case-Shiller National index (SA) is back to Q3 2002 levels, the Case-Shiller Composite 20 Index (SA) is back to January 2003 levels, and the CoreLogic index is back to February 2003.

Real House Prices

The second graph shows the same three indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices.

In real terms, the National index is back to Q4 1998 levels, the Composite 20 index is back to February 2000, and the CoreLogic index back to August 1999.

In real terms, all appreciation in the '00s - and more - is gone.

Price-to-Rent

In October 2004, Fed economist John Krainer and researcher Chishen Wei wrote a Fed letter on price to rent ratios: House Prices and Fundamental Value. Kainer and Wei presented a price-to-rent ratio using the OFHEO house price index and the Owners' Equivalent Rent (OER) from the BLS.

Here is a similar graph using the Case-Shiller National, Composite 20 and CoreLogic House Price Indexes.

This graph shows the price to rent ratio (January 1998 = 1.0).

On a price-to-rent basis, the Case-Shiller National index is back to October 1998 levels, the Composite 20 index is back to February 2000 levels, and the CoreLogic index is back to August 1999.

In real terms - and as a price-to-rent ratio - prices are mostly back to late 1990s or early 2000 levels, and will all probably be back to late '90s levels within the next few months.

All current house price graphs
Earlier:
• Case Shiller: House Prices fall to new post-bubble lows in January

by Calculated Risk on 3/27/2012 10:27:00 AM

• From Lennar:

"New sales orders in the first quarter were encouraging. We have seen the market stabilize, driven by a combination of low home prices and low interest rates, making the decision to purchase a new home more attractive, compared to the heated rental market. We recorded our strongest first quarter sales since 2008, with new orders increasing 33% year-over-year. We have been able to increase sales prices and have started to reduce sales incentives in some of our communities. We have also seen a noticeable improvement in our sales pace per community, which should lead to a significant increase in the operating leverage of our homebuilding segment in the second half of the year." [said Stuart Miller, Chief Executive Officer of Lennar Corporation]

• From the Richmond Fed: Manufacturing Growth Moderates In March; Expectations Remain Positive

In March, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — declined thirteen points to 7 from February's reading of 20. Among the index's components, shipments lost twenty-three points to 2, new orders dropped ten points to finish at 11, and the jobs index moved down seven points to end at 6.

This suggests slower growth in March.

• From MarketWatch: March consumer-confidence gauge declines to 70.2

A gauge of U.S. consumer confidence declined in March due to lower employment expectations, while views on the present situation rose to the highest level since 2008, the Conference Board reported Tuesday. The consumer-confidence gauge fell to 70.2 in March from a February reading of 71.6.