note on the graphs used here

sometime during the third week of March, the St Louis Fed, home to the FRED graphs, changed their graphs to an interactive format, which apparently necessitated eliminating some of the incompatible options which we had used in creating our graphs, and also left us with about half the options we had available and used before the upgrade...as a result, many of the FRED graphs we've included on this website previous to that date, all of which were all stored at the FRED site and which we'd always hyperlinked back there, were reformatted, which in many cases changed our bar graphs to line graphs, and some cases rendered them blank or unreadable... however, you can still click the text links we've always used in referring to them to view versions of our graphs as interactive graphs on the FRED site, or in the case where a graph has gone missing, click on the blank space where it had been in order to view it....


Sunday, August 12, 2012

LPS & MBA on June mortgage delinquencies & foreclosure inventory, June’s trade balance & consumer credit, July’s heat & drought records, et al

  except for the ongoing kerfuffles over Romney's unrevealed tax returns, his mathematically impossible tax reform plan, and his team's white paper on economic policy (which was quickly & widely refuted by the economists it cited), it was a comparatively quiet week in the blogosphere, with few headline economic releases...perhaps his early naming of paul ryan, he of the medicaid block grant and medicare voucher plans, was intended to deflect criticism from his own numerically challenged efforts, as mr ryan has had a history of same: here, for instance, are the original Ryan plan projections (pdf), via bill mcbride, which have since disappeared from the public record elsewhere after they proved to be such an embarrassment (ie, see the 2.8% unemployment projection)..or, for more background on that plan, you might want to check my April 2011 aggregation on the original Ryan plan in a guest post at Angry Bear...

Delinquency Rate we're going to start our coverage this week by looking at two reports that cover home mortgages that are past due or in foreclosure, the MBA 2nd Quarter Survey and the LPS Mortgage Monitor for June (pdf)..echoing their "first look",  which we mentioned a few weeks back, LPS (Lender Processing Services) reported that approximately 5,663,000 homeowners, or 11.23% of those with a mortgage, did not make a housepayment in June; of those, 2,012,000 home loans were less than 90 days delinquent, another 1,590,000 loans were over 90 days delinquent but had not yet received a delinquency or foreclosure notice, and 2,061,000 mortgages, or 4.09% of all mortgages, were in some stage of the foreclosure process...although the percentage of homes in the foreclosure process fell from 4.17% in May, it was still not significantly different than the 4.13% that LPS reported were in foreclosure a year ago...the total mortgages delinquent but not yet in foreclosure in June represented 7.14% of all mortgages, which was up from 6.91% in May, making it the 3rd month in a row that LPS reported an increase in delinquencies...nonetheless, the percentage of homeowners missing one or more house payments was still down from the 7.71% delinquent in June of 2011, and far down from the peak of 10.57% delinquent in January 2010, which you can see on the adjacent chart taken from page 3 of the pdf...this chart, which covers 17 years, also shows that the pre-crisis level of delinquencies trended between 4% and 5%, and the pre-crisis percentage of homes in foreclosure was generally below 0.5%, so there is quite an abnormal unresolved backlog in foreclosure...as we've noted before, homes in non-judicial states continue to be seized at a more rapid clip than those in states where documents must be presented in court;  as of June, nearly 60 percent of borrowers with loans in foreclosure in judicial states had not made a payment in at least two years; the chart on page 11 of the mortgage monitor pdf shows foreclosure inventory in judicial states at 6.42% of all mortgages, vs the 2.41% in non judicial states, although such inventory in now declining under both types of states...

MBA In-foreclosure by state

both the percentage of foreclosure inventory and the mortgage delinquency rates were slightly higher in the 2nd quarter MBA (Mortgage Bankers Association) National Delinquency Survey, but direct comparisons to LPS's mortgage monitor will be difficult because MBA gives both seasonally and unadjusted percentages in their press release, while the complete detailed survey "is available for purchase"...the MBA survey reports the seasonally adjusted delinquency rate at the end of the 2nd quarter was 7.58% of all loans outstanding, which was up from 7.40% of all loans at the end of the 1st quarter and down from the 8.44% of all loans that were delinquent (but not yet in foreclosure) at the end of the 2nd quarter of 2011...since delinquency rates normally increase in the 2nd quarter, the difference between the first & second is greater on an unadjusted basis, where the MBA shows delinquency increasing from 6.94% in Q1 to 7.35% in Q2; this would correspond to the unadjusted 7.14% delinquency rate LPS reported...MBA also reports that 4.27% of home loans were in the foreclosure process at the end of the 2nd quarter, down from 4.39% in the 1st quarter and from 4.45% a year ago...taken together, the combined percentage of loans in foreclosure or at least one payment past due was 11.62% in the 2nd quarter, up from 11.33% in the 1st quarter; so whichever report we look at we find that more than 1 in 9 homeowners are not making payments on their mortgages...MBA also reports foreclosure actions (which could include anything from notices to repossessions) were initiated on 0.96% of all loans during the second quarter...this report also gives a serious delinquency rate, which is described as "the percentage of loans that are 90 days or more past due or in the process of foreclosure" of 7.31%, which was down from 7.44% in the first quarter...the adjacent graph from this MBA report shows the percentage of loans in foreclosure by state; with judicial states shown with a darker bar; it corresponds with the state data in table form on page 4 of the LPS pdf, where judicial states are asterisked...according to the MBA, 13.7% of homes in florida, shown by the bar on the far left, are in foreclosure, which is almost 1 in 7 and is obviously far more than any state; next is new jersey, with 7.7% of homes in foreclosure, followed by illinois with 7.1%, then new york at 6.5%, and nevada, the only non-judicial state among the top 12, with 6%...corresponding numbers from the LPS table, which also shows percentage in delinquency by state, are 13.5% for florida, 7.0% for new jersey, 6.6% for illinois, 6.7% for new york, and 5.7% for nevada...two hard hit states which are non-judicial, arizona and california, show only 3.2% and 3.1% of loans respectively remaining in foreclosure...

U.S. Trade Deficit the major release from the Dept of Commerce this week, on our June Balance of Trade in goods and services (pdf) was one of the better economic reports we've seen in a while, in that our trade deficit fell to it's lowest level in 18 months, largely due to increasing exports, even with most of the world contracting....total June exports of goods and services of $185.0 billion offset by imports of $227.9 billion resulted in a trade deficit of $42.9 billion....our exports to the euro area were valued at $17.4 billion in June, up from $16.4 billion a year ago, despite their recession, which suggests at least our trade will not be seriously impacted by the crisis in europe; of major export goods categories, industrial materials and supplies increased $603 million over last month, automotive vehicles and parts were up $695 million, consumer goods increased $865 million, pharmaceuticals increased by $459 million and petroleum products increased by $508 million, while  foods & beverages decreased $792 million and soybean exports fell $660 million; there also seems to be some media fascination that we exported $248 million more in gem diamonds...on the import side, the major decrease was in crude oil, imports of which fell $2.653 billion to $27.295 billion, as oil averaged $100.13 in June, down from $107.91 per barrel in May..but we also imported less industrial supplies and materials, which declined $2.279 billion, less capital goods at $1.286 billion, and less consumer goods, imports of which slipped $569 millionthe chart from bill mcbride included here to the right graphs our total trade deficit in blue, our trade deficit in oil in black, and our deficit less oil in red…since our trade deficit with China was at $27.4 billion in June, it’s clear that our deficit in oil and with that country alone more than account for our total deficit…

another release of this past week that we usually cover is the Fed's report on Consumer Credit for June, even though the recent reports have been somewhat less exceptional than when they first drew our attention...in June, growth of consumer credit was at it's slowest in 8 months, as it grew by $6.46 billion, a seasonally adjusted annual rate of 3%...the change in revolving credit, (ie, credit cards) which grew at a 5 year high revised annual  rate of 10.5% in May, reversed and  shrank by $3.7 billion, or at a 5.1% rate in June, it's greatest contraction since April 2011, which turned the quarterly expansion in revolving credit negative at 0.5%...non-revolving credit, which you'll recall includes typically longer term borrowing for such items as cars, yachts, & education, continued to expand in June by $10.2 billion to $1,712.8 billion, which is increasing 7.2% at an annual rate...looking at "Major types of credit, by holder" in the 3rd table as we normally do, we see that $5.8 billion of that increase was borrowed from the federal government, and thus it is again student loans that accounts for the majority of the June credit expansion...

Year to Date Horserace Graph for Contiguous U.S. it probably wont come as much of a surprise to those of you east of the Rockies that July has gone into the record books as the hottest month in US history, eclipsing July 1936, the worst month of the Dustbowl, by 0.2°F...the average temperature for the contiguous 48 states over the month was 77.6°F, 3.3°F above the 20th century average, contributing to the record warmest year to date on record, and making the 12 months ending July the warmest 12 months since national recordkeeping began in 1895; in fact, the last four 12-month periods have each successively established a new record for the warmest year long period...Virginia had its hottest July on record, with temps 4° F above average statewide, 7 other states (NC, KY, DE, IL, ND, SD, & WY) had their second hottest month ever, and 32 states had July temperatures among their ten hottest in the 118 year record history...July also had 3,135 new daily high temperature records set, 17 times the low temperature records for the month...on August 5th, we recorded our 27,042nd high temp record of the year, surpassing the total of all of 2011 ..the adjacent chart, which comes to us via NOAA's National Climatic Data Center, is illustrative of just how unusual this year to date has been temperature-wise; it shows the year-to-date temperature anomaly for 2012 in graphed in red, and similar data graphed for the other 117 years on record, with the 5 warmest years in orange, and the 5 coolest in blue, which you can see clearly if you click on the chart...while it's obvious january & february were above normal, there is nothing in history that comes near this year since, which is even more remarkable in that we started in a La Nina year, which tend to be cooler and drier than normal in most of the US...

on friday, the USDA released its monthly World Agricultural Supply and Demand Estimates report (pdf), widely awaited for its projections on the drought damaged corn and soybean crops, and it was worse than expected; USDA cut its forecast for the US corn crop by 17%, to 10.779 billion bushels, with an estimated yield of 123.4 bushels per acre, down from the last report’s estimated per acre yield of 146 bu, which itself was down from the earlier 166 bu/acre estimate; this would mean a corn crop 13% less than the flood ravaged crop of last year, and the lowest average yield per acre since 1995…the soybean forecasts were cut as well, from 3.05 billion bushels to 2.69 billion bushels, which would be 12% off last year’s total…due to the expected lower corn yield, the UN has called on the US to reduce it’s conversion of corn to ethanol, but as of yet there has been no movement from the administration…based on earlier estimates of the corn crop, kay macdonald at big picture agriculture computed that 48% of this year’s national corn crop will be required to fulfill the US ethanol mandate

while the total area of drought coverage has not grown much since we last looked at it (it shrank slightly last week) the intensity of the drought in those areas of the central plains that have been dry has continued to intensify almost weekly throughout the summer, as you can see in the large 12 week animation of the USDA drought monitor embedded below...during the 7 days ending on August 7, extreme drought (in red) and exceptional (in brown) drought continue to expand or intensify over parts of Missouri, Arkansas, Oklahoma, Kansas, Nebraska, and Illinois, and new areas of exceptional drought have been introduced from east central Kansas to west central Missouri, while there was some improvement was seen in portions of South Dakota and Wyoming, even though drought in those areas still registered extreme...and although most parts of Ohio, Indiana, & lower Michigan received above normal rainfall over the past week, it's past the stage where it can be of much benefit to the corn crop...

(the above is my weekly commentary that accompanied my sunday morning links mailing, which in turn was mostly selected from my weekly blog post on the global glass onion, and also includes other links of interest…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

2 comments:

  1. Thank You RJ for the 411...and your commitment to the detailed facts!

    ReplyDelete
  2. Foiod security will become one of the defining issues of the next 25 years. Wars will be fought over arable land and water.

    ReplyDelete