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Single Family Production Continues to Move Sideways Economics Written by Jonathan Smoke    07.17.2008 The Commerce Department released the initial readings on new home construction in June today. The headlines are generally focusing on the stat that “single family construction fell 5.3% in June.” Don’t be fooled by the quick simple read of this data. The data for June only showed that we’re moving sideways at very depressed production levels. The Commerce department release reported that total residential permits in June were at a seasonally adjusted annual rate of 1,091,000, which is 11.6 % above the revised May rate of 978,000, but is 23.9% below the revised June 2007 level of 1,433,000 permits. The nearly 12% increase in total permits was statistically significant. No comments for this item Read more...

Irrational Ennui or a Vast Conspiracy? Economics Written by Jonathan Smoke    07.14.2008 Last week the stock prices of the GSEs—the Government Sponsored Entities of Fannie Mae and Freddie Mac fell 45%. On Friday the business media outlets were awash in analysts and experts extolling the damage that would be done if Fannie and Freddie’s so called “financial trouble” resulted in their failures. As a result of the height of this irrational ennui, the Treasury and Fed have developed a plan to support the mortgage giants and to prove the government won’t let them fail. No comments for this item Read more...   Sentiment Seems to Be Declining Even More Economics Written by Jonathan Smoke    07.11.2008 At least looking at Wall Street, the housing industry looks dismal and that should include its prospects. But is this based on momentum or fundamentals? If it’s based on momentum, like I think it is, the dark mood may be a good thing. While the Dow and the S&P 500 are down over 15% over the last 12 months, take a look at the market’s view of homebuilders. No comments for this item Read more...   Are We Nearing a Top in Foreclosure Activity? Mortgage Written by Jonathan Smoke    07.10.2008 The ForeclosurePulse blog from the folks at RealtyTrac has a great post today about the release of their June data. The June data showed that U.S. foreclosure activity in June decreased 3 percent from May but was still up 53 percent from the prior year. The blog post nicely raised the question if this is a sign of a top or not. The argument against this being a top is that the year-over-year comparison still shows foreclosures much higher. Moreover, there have been several months during the last two years that month-over-month activity registered declines. No comments for this item Read more...   Income and Home Affordability Economics Written by Bill Russell    07.07.2008 Today I want to consider the relationship between income and affordability. Though income is directly included in the calculation of the affordability index, it only explains about 16% of the resulting index. Obviously, areas with higher income can afford to build nicer homes and support higher levels of urbanization. In addition, economic research has shown that successful cities do not necessitate higher incomes, but cause them through increased productivity, so that a successful city will necessarily have higher incomes than other areas. No comments for this item Read more...   Free Reports Now Available for 939 Markets in the U.S. Market Research Written by Jonathan Smoke    07.01.2008 Intelligence is a bad thing to waste. From our experience, too many otherwise rational professionals make housing related decisions by gut feel due to lack of information. That’s why our tag line is “Don’t just guess.” In order to increase our exposure and help out local chambers of commerce and home building associations, we’ve elected to make a basic report on key housing metrics available for free. You can find them in our aptly titled “Free Reports” under Intelligence on our main site navigation. No comments for this item Read more...   Urbanization and Affordability Economics Written by Bill Russell    06.30.2008 Though urbanization alone cannot explain high home prices, there is a relationship, as can be seen in the graph below. The graph shows the percentage of urban land in each of the 361 census MSAs verses the affordability index. In general, as urbanization increases, affordability declines. This relationship is weak. Urbanization only explains 5% of affordability variation. No comments for this item Read more...

More... Recap of Week’s News—A Mixed Bag But With Hope of a Bottom for Sales Unaffordable by Choice The Cost of Unaffordable Housing May Permits and Starts Move Sideways The Myth of Eroding Affordability Employment Grows (In Spite of Housing Bust) Southern Building Show Starts Off with Good Advice to Builders Visit Us at the Southern Building Show April Pending Home Sales Index Bodes Well One Big Builder’s View of the Market Gives Me Confidence

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