by Calculated Risk on 12/17/2010 04:08:00 PM

Note: Obama is signing the tax legislation right now.

CR Note: This is from housing economist Tom Lawler:

"Based on data received so far, I have revised upward my estimate for existing home sales in November, and I now expect a seasonally adjusted annual rate of around 4.61 million for November."

CR Note: Earlier Tom estimated 4.57 million SAAR, so this is a minor change. Existing home sales for November will be released on Wednesday December 22nd at 10 AM ET.

by Calculated Risk on 12/17/2010 01:36:00 PM

Here is an update to a graph showing total housing starts and the percent vacant housing units (owner and rental) in the U.S.

Over a year ago, I used this chart to argue that there would be no "V shaped" recovery, and that housing starts wouldn't rebound rapidly. See: Housing Starts and Vacant Units: No "V" Shaped Recovery. In that earlier post, I also argued that the unemployment rate would remain high throughout 2010. Hey, housing matters!

Note: Housing starts are through November, and the combined vacancy rate through Q3 based on the Census Bureau vacancy rates for owner occupied and rental housing.

Click on graph for larger image in new window.

The good news is the total vacancy rate has started to decline. We know that the homebuilders will complete a record low number of housing units in 2010, and the declining vacancy rate suggests more households are being formed than net housing units added to the housing stock, or in other words, the excess supply is being absorbed.

The bad news is there is a long way to go. In some areas there will probably be a pickup in building next year, but the recovery in construction will remain sluggish until more of the excess supply is absorbed.

Looking at the graph, the vacancy rate continued to climb even after housing starts fell off a cliff. Initially this was because of a significant number of completions. Then some hidden inventory (like some 2nd homes) probably became available for sale or for rent, and also some households doubled up because of tough economic times. As the economy improves, the people that doubled up will probably be forming households - and that will help absorb the excess supply. But it will take time.

by Calculated Risk on 12/17/2010 11:27:00 AM

From the BLS: Regional and State Employment and Unemployment Summary

Regional and state unemployment rates were generally little changed in November. Twenty-one states and the District of Columbia recorded unemployment rate increases, 15 states registered rate decreases, and 14 states had no rate change, the U.S. Bureau of Labor Statistics reported today.
...
Nevada continued to register the highest unemployment rate among the states, 14.3 percent in November. The states with the next highest rates were California and Michigan, 12.4 percent each, and Florida, 12.0 percent. North Dakota reported the lowest jobless rate, 3.8 percent, followed by South Dakota and Nebraska, 4.5 and 4.6 percent, respectively.

Click on graph for larger image in new window.

This graph shows the high and low unemployment rates for each state (and D.C.) since 1976. The red bar is the current unemployment rate (sorted by the current unemployment rate).

Nine states now have double digit unemployment rates. A number of other states are close.

by Calculated Risk on 12/17/2010 08:58:00 AM

From the NY Times: Moody’s Slashes Ireland’s Credit Rating

Moody’s ... cut Ireland’s credit rating by five notches to Baa1, with a negative outlook, from Aa2 and it warned further downgrades could follow. The rating remains investment grade but if it were to move down by three more notches, Irish debt would be classified as junk.

“The Irish government’s financial strength could decline further if economic growth were to be weaker than currently projected or the cost of stabilizing the banking system turn out to be higher than currently forecast,” Moody’s said in a statement.

The yield on the Ireland 10-year bond is up to 8.37%.

Meanwhile, from Bloomberg: EU Leaders Create Debt-Management Mechanism From 2013

by Calculated Risk on 12/16/2010 11:59:00 PM

From the NY Times: Congress Sends Tax Cut Bill to Obama

From the WSJ: Congress Passes Sweeping Tax Bill

Not much market reaction. The Asian markets are mixed tonight. And CNBC's Pre-Market Data shows the S&P 500 off a fraction of a point. Dow futures are off about 10 points.

Best to all.

by Calculated Risk on 12/16/2010 08:30:00 PM

UPDATE: Congress Passes Tax Legislation 277-148

7:40 PM ET: The Committee of the Whole proceeded with three hours of general debate on the Senate amendment to the House amendment to the Senate amendment to H.R. 4853

Some resources for following the House vote:
• U.S. House: Office of the Clerk
• The live video feed from the House.

Earlier today:
• CoreLogic: House Prices declined 1.9% in October
• Housing Starts increase slightly in November
• Weekly Initial Unemployment Claims decline to 420,000

Graph galleries: House Prices, Housing Starts, and Weekly Claims