Morning Report: Consumer Confidence and home price appreciation decline 7/28/15

Stocks are higher this morning as Euro markets rally on M&A activity, and the 200 day moving average held for Chinese stocks. Bonds and MBS are down.

The FOMC starts their two day meeting today.

Big drop in consumer confidence, according to the Conference Board. It fell from 99.8 in June to 90.9 in July: “Consumer confidence declined sharply in July, following a gain in June. Consumers continue to assess current conditions favorably, but their short-term expectations deteriorated this month. A less optimistic outlook for the labor market, and perhaps the uncertainty and volatility in financial markets prompted by the situation in Greece and China, appears to have shaken consumers’ confidence. Overall, the Index remains at levels associated with an expanding economy and a relatively confident consumer.”

The S&P Case-Shiller index of real estate values was basically flat in May, and is up 5% year over year. David Blitzer has an important comment on the first time homebuyer, which speaks to the education challenge those of us in the real estate business have to do:  “First time homebuyers are the weak spot in the market. First time buyers provide the demand and liquidity that supports trading up by current home owners. Without a boost in first timers, there is less housing market activity, fewer existing homes being put on the market, and more worry about inventory. Research at the Atlanta Federal Reserve Bank argues that one should not blame millennials for the absence of first time buyers. The age distribution of first time buyers has not changed much since 2000; if anything, the median age has dropped slightly. Other research at the New York Fed points to the size of mortgage down payments as a key factor. The difference between a 5% and 20% down payment, particularly for people who currently rent, has a huge impact on buyers’ willingness to buy a home. Mortgage rates are far less important to first time buyers than down payments.” Probably the biggest misconception in the market is the idea you must have 20% down.

16 Responses

  1. Frist. homeownership rate falls to 63.4%, lowest since 1967. All of the gains from Bill Clinton’s activist HUD have been given back


  2. “All of the gains from Bill Clinton’s activist HUD have been given back”

    Because we didn’t do it right. Eventually, when the right people are in charge, the command economy will finally work as envisioned, and utopia will be nigh.


  3. what is becoming a part time job:

    (please don’t share on PL)


  4. No problem. They really are impervious to other arguments.


  5. that, and I don’t think they’d respect my privacy and desire to remain anonymous.


  6. NoVA – you going to have to get state law changed?


  7. Not necessarily. there is nothing in state law preventing the release of information. we could remove the discretion that the state FOIA law gives to the “record owner” (in this case being FCPD) .. but that would be quite the effort.

    we’re pushing — and i think we have a realistic chance of success — in revising department policy on this. baby step, but in the right direction. i’ve had some productive talks with senior FCPD leadership .. and they know they have to change.


  8. So to be clear, this isn’t a special carve out for Fairfax, but could be adopted as policy by other police departments if they were so inclined?


  9. yes. we took testimony from the deputy county attorney. this isn’t so much a legal issue as a policy one.

    incident reports and the like are covered under state FOIA as “discretionary” releases. it essentially punts the decision to release to the “owner” of the record at issue.

    §2.2-3706. Disclosure of criminal records; limitations. see

    so, we’re pushing for a policy change at the department level and a possible order from the board of supervisors level — they can order the FCPD to implement a policy.

    but if your local PD is saying that FOIA doesn’t apply to these records, not so. it’s that they have very broad discretion in whether or not to release them.

    and a good example of the opposite approach is Seattle:

    now, we could push for a change in state law to remove the discretion, but that’s a longer fight and we think we can have some success at the local level first.


  10. I’d do both. No guarantee that the next Chief of Police won’t just change the policy again.


  11. Like

  12. NoVA – the ultimate Simpons reference:

    “The Simpsons Predicted 15 Years Ago That a Trump Administration Would End in Disaster
    By Josh Voorhees”


  13. And it’s a punt:

    “Congress Punting Highway Fight Until October
    The battle over transportation funding and the Export-Import Bank will have to wait for three months.
    By Daniel Newhauser and Alex Rogers

    July 28, 2015 With members itching to get back to their districts, House and Senate leaders have decided to stop fighting about highway funding and the Export-Import Bank—so they can have the same fights again in October.

    Senate Republican leaders signaled Tuesday that they would vote on a three-month extension of the Highway Trust Fund, just hours after the House announced it would vote on the legislation Wednesday and scale back its ambitions from a five-month bill.

    The hope is the two chambers can move into a conference committee later this year, and House aides said their chamber would try to pass a multiyear bill of their own to match the Senate’s product.

    Notably, the House’s short-term bill will not include a reauthorization of the Export-Import Bank, taking off the table, if only temporarily, an issue that has split the conference and the top four GOP leaders. Proponents of the lending institution met Monday to strategize about how to authorize the bank, which lapsed about a month ago. Yet conservatives are staunchly against doing so, and now the issue will remain unresolved for at least another month.”


  14. I can’t believed I overlooked that. I’ve used that episode before.

    “Remember when the last administration decided to invest in our nation’s children?” says Secretary Milhouse van Houten. “Big mistake.””


    • Really good article on toleration, bigotry, and the conflict between the rights of conscience and the increasing demands required by the law.

      Seen from this angle, we can recognize that what is called a “culture war” might be better understood as the problems that come with the creation of a postmodern religious establishment—an establishment that takes on most of the roles of the old establishments, yet defines its beliefs, conveniently, as “not religion.” The result is that it feels free to impinge on the rights of conscience in the name of “toleration” and “diversity.” Meanwhile, since national government has taken up the police power (the authority to regulate health, safety, and morals), a power that even Alexander Hamilton denied belonged to the federal government, it exacerbates the conflict.

      With that in mind, we Americans of the twenty-first century would be wise to recall Washington’s example. If Washington understood that it was essential to respect the rights of conscience, even when America was fighting for its survival, then surely we can do better in finding ways of respecting the religious beliefs and practices of cake bakers, photographers, florists, nuns, and of Americans in general in their diurnal affairs. Such are the demands of religious diversity.

      The alternative is to weaken America’s status as a land of liberty. If we continue down the road we are going, I fear that America will be the latest instance of the ancient tragic pattern, but with a twist—for in twenty-first-century America, this bigotry claims the mantle of “toleration” and “diversity.” Even so, we should recognize it for what it is.


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