Morning Report – Median House price increases 12.8% 11/20/13

Vital Statistics:

Last Change Percent
S&P Futures 1788.5 3.3 0.18%
Eurostoxx Index 3043.7 -5.5 -0.18%
Oil (WTI) 93.71 0.4 0.40%
LIBOR 0.238 -0.001 -0.42%
US Dollar Index (DXY) 80.64 -0.066 -0.08%
10 Year Govt Bond Yield 2.73% 0.02%
Current Coupon Ginnie Mae TBA 105.6 -0.1
Current Coupon Fannie Mae TBA 104.8 0.0
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.3
Markets are higher after retail sales came in a bit better than expected. Bonds and MBS are down small. Later on today, we will get the minutes from the October FOMC meeting. It will be interesting to see if the credibility argument is still being made.
Existing Home Sales dropped to an annualized pace of 5.12 million in October according to the National Association of Realtors. The median house price rose 12.8% from a year ago to $199.500. Days on market increased to 54 and months of supply increased to 5. Inventory on the West Coast is still tight.
Mortgage applications fell 2.3% during the holiday-shortened week. Purchases jumped 5.8%, while refis dropped 6.5%. Not sure what drove the jump in purchases. Refis as a percent of total number of loans fell to 64.3%.
Chart: MBA Purchase Index

The Consumer Price Index came in as expected, with a .1% decrease month-over-month and a 1% increase year over year. Ex food and energy, prices rose .2% month-over-month and 1.7% year-over-year. Certainly not enough of an increase to get the Fed worked up about inflation. If anything, they probably think it is too low.

Retail Sales came in at +.4% for October, which is yet another sign that the consumer (and the economy) basically yawned at the government shutdown. For all the sturm and drang out of guys like Mark Zandi saying the shutdown would lop 1.4% off of 4Q GDP growth, we have yet to see any tangible evidence it so far. Payroll was par for the post-recession course, retail sales were above average.

Housing-related expenditures make up about 17.6% of GDP, according to CoreLogic. This is up slightly from a year ago, but well below the peak of 20.6% in 2005. Part of the reason why this recovery has been so maddeningly tepid has been the absence of housing spending, particularly housing starts. Housing starts used to average around 1.5 million units a year from the sixties to the bubble years. Since then, we have been averaged under half of that. Since housing construction usually leads us out of a recovery, it absence has meant this slog of 1% – 2% GDP growth. Note that the homebuilders were noting mid teens increases in average selling prices amidst a drop in traffic. At some point, they are going to have to pump up the volume in order to meet achieve further growth. And that could be what we have been waiting for.

I went on Louis Amaya’s show yesterday and talked about the mortgage originators, servicers, and some of the REITs. I also discussed the origination business in general and trends going forward. The link is here.

30 Responses

  1. frist


  2. The hack Sargent sure sounds worried about a possible repeal of The Abomination.

    Thought that kinda thinking was only credible with Teabaggers like me.


  3. Be nice to Greg. I must suck to be a junior officer on a sub went the captain doesn’t know what do do.

    I liked Milbank’s column. Its so desperate.

    Our backs are now against the wall?
    Listen all y’all, it’s a sabotage
    Listen all y’all, it’s a sabotage
    Listen all y’all, it’s a sabotage
    Listen all y’all, it’s a sabotage


  4. The polling exceeds my expectations. I didn’t think that they would get this much traction, but they did.

    The other shoe to drop is the payment system I suspect. If there’s another round of blowups in January with insurers not getting paid properly, I expect the Democrats to cave on delaying the mandate and possibly some other things.

    It will be interesting to see how this plays into the next round of budget talks.


  5. Can’t stand it
    I know you planned it.


  6. website working or not, the pricing is going to be problematic as well. You can’t have a talking point of “you’re old plan wasn’t any good”

    on a somewhat related note, a friend sent me a posting for GR job at AHIP. uh … pass.


  7. How much should doctors make?

    What’s the consensus at PL on how much doctors should make?


    • McWing;

      How much should doctors make?

      If access to health care is a right, then doctors shouldn’t make anything. They owe their services as a matter of moral obligation, not as a negotiated quid pro quo.


  8. “What’s the consensus at PL on how much doctors should make?”

    Same as Europe of course.


  9. “If we ever reach the point where American doctors have been squeezed so badly that they start fleeing north of the border to get higher pay in Canada, then we’ve squeezed too hard. Until that happens, forget about it.”

    Someone needs to explain concierge medicine to Yglesias

    Hoever, to give him his due, this is exactly right:

    “What we really ought to be doing is working to further pressure the incomes of doctors through supply-side reforms. That means letting nurse practitioners treat patients without kicking a slice upstairs to an M.D., letting more doctors immigrate to the United States, and opening more medical schools.”


    • jnc:

      Hoever, to give him his due, this is exactly right:

      Yes, it is, but I don’t give him much credit for that, because he doesn’t advocate for it out of any principle, but rather only because it will help him achieve his immediate goal of reducing doctor’s income. Anyone who speaks admiringly about government deliberately “squeezing” someone’s income doesn’t deserve much respect.


  10. That means letting nurse practitioners treat patients without kicking a slice upstairs to an M.D.



  11. My money’s on the AMA keeping things the way they are. The PL lefties support trade guilds right?


  12. “AMA keeping things the way they are”

    I think the AMA is going to lose this one. not immediately. the nurses are organized and effective. and everyone loves them. the docs are divided and pointing at each other — primary care v specialists.


  13. the WH just put out a report titled “trends in health care cost growth and the ACA”

    one of the bullet points: The ACA is contributing to the recent slow growth in health care prices and spending and is improving quality of care

    place your bests on how quickly it gets regurgitated


  14. Scott, I don’t care why people advocate for free market solutions, only that they do so.

    If they end up doing the right thing for the wrong reasons, it’s fine with me.


    • jnc:

      Scott, I don’t care why people advocate for free market solutions, only that they do so.

      My point is that he isn’t advocating for a “free market” solution. He doesn’t give a crap about the free market. He is advocating for any solution that will achieve his desired end, and because of that, I have no respect for his support of the right policy even if political cynicism would lead me to welcome that support (and it probably would). Maybe I am just nitpicking, but I don’t think people deserve props for inadvertantly stumbling on the right policy for exactly the wrong reasons.


  15. Applied for two FDA jobs today (GS12/13 level). I was contacted about the postings by the guy who’s going to be doing the hiring, so I’m taking that as a good sign. Keep yer fingers crossed.


  16. NoVA:

    This comment popped up on PL. Do you have any knowledge one way or the other?

    Watch the hospital lobbyists in the state capitols. The hospitals are freaking out.


  17. BTW, had dinner with my out-of-town friend in your neck of the woods last night (Ray’s The Steak). Excellent recommendation–thanks!


  18. Good luck Michi on the FDA jobs.


  19. good luck Michi


    • O-care forces people to take a government handout, even if they don’t want it.

      Before ObamaCare, Medicaid was one option. Not the option. Before this, she had never been, in effect, ordered to take a handout. Now she has been forced to join the government-reliant poor, though she would prefer to contribute her two mites. The authorities behind “affordable care” had erased her right to calculate what she was willing to spend to preserve her dignity—to determine what she thinks is affordable.

      That little contribution can mean the difference between dignity and despair.

      For the truly poor, being institutionally forced to take welfare is demoralizing. The Affordable Care Act is at risk of systematizing learned helplessness by telling individuals like my mother that they cannot afford to care for themselves in the way they could before the law was enacted. “This makes me feel poorer than ever,” she said.


  20. Scott, that which is not forbidden is mandatory.


    • McWing:

      Scott, that which is not forbidden is mandatory.

      That is exactly where progressivism is taking us. How long before this makes its way to the US?


  21. I’m pretty sure there are some districts here where students are forbidden to even bring their own lunch, so as to not stigmatize those receiving free lunches.

    Besides, isn’t nutrition too important to entrust parents with? Geez, what are you, a wingnut?


  22. Michi

    Hospitals agreed to cuts in DSH payments based on the assumption that there would be fewer uninsured. If the number of uninsured doesn’t change they still get cut. The cuts in DSH are factored into the projected savings. Cost shifting more like it. Regardless they want to either reverse the cuts or expand Medicaid.

    They’re not freaking out though. No more than usual.

    Dsh = disproportionate share hospital. Google that for how the formula works.

    And good luck with FDA.


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