Standard Pacific Corp
Retail sales increase 0.2% in July, homebuilder opportunity ahead
Retail sales data gives analysts insight into the strength of the consumer Consumption is the biggest driver of the U.S. economy and accounts for 70% of GDP. Consumption has been relatively subdued since the recession began, as Americans have boosted their savings rate and spent only on essentials. The real estate bubble drove consumption in […]
ISM manufacturing survey shows more manufacturing expansion
Overall increases in business activity and consumption are starting to drive more business for homebuilders.
Why the FOMC minutes and weak payroll data drove REITS and builders
Last week, we had two important data points with the FOMC minutes from the December meeting and the Employment Situation report on Friday.
Business inventories rise slower than sales, good for activity
This series focuses on industrial and manufacturing releases that will affect the real estate sector. Since homebuilders are highly cyclical, housing analysts watch the manufacturing data closely.
Why the Producer Price Index increasing 0.8% in June will hurt homebuilders
The Producer Price Index measures inflation at the wholesale level Analysts have typically taken inflation at the wholesale level to predict inflation at the consumer level. In a normal business environment, producers pass these increased costs to consumers, which would decrease disposable income if wages didn’t rise accordingly. Investors consider a little inflation a good thing. […]
Why foreclosure starts ticked up in October but are still falling
Foreclosure starts are closely watched by investors, realtors, and homebuilders alike because they forecast future housing supply.
Must-know: Home prices increase 7.4% YoY
The 7.4% year-over-year (or YoY) gain resembles the gains we saw during the bubble years. On a month-over-month basis, the increase was only 1.2%. It was decent. The prices for ex-distressed sales increased 6.8%. Prices are still 11.9% below their peak in April 2006.
Weekly economic recap: why REITs are crushed while homebuilding is bullish
The ten-year bond is the basis for all mortgage pricing Long-term interest rates are priced off the benchmark long-term bond, which is the ten-year Treasury. These days, the ten-year bond reacts to economic data through the Federal Reserve’s asset purchase program, also known as quantitative easing (QE). As a general rule, economic data that shows […]
Bloomberg consumer comfort index hits a post-recession high, good for homebuilders
The Bloomberg Consumer Comfort Index rose to -28.3 for the week ending June 23 The Bloomberg Consumer Comfort Index is a weekly sentiment index that covers three critical variables: respondents’ perception of the state of the economy, their evaluation of their personal finances, and whether it’s a good time to purchase goods and services. The […]
Aggregate home equity increases 9% in Q113
Corelogic puts out a quarterly report on aggregate home equity in the U.S. Corelogic’s Home Equity Report analyzes changes in home equity from a number of different perspectives. Home equity can be used to predict default rates, and we saw a large number of strategic defaults early in the housing bust as professional investors realized […]
ISM PMI shows manufacturing back in expansionary territory
The Institute for Supply Management Index assesses the state of manufacturing in the United States. The Institute for Supply Management Purchasing Manager’s Index (ISM PMI for short) is similar to the other regional PMI indices, however, it covers the entire country. The ISM PMI looks at various business indices, like new orders, production, employment, supplier […]
Seasonality Trumps The Bond Market Rally
The MBA Purchase Index decreased 6.9% in the week ended December 12, 2014, despite a strong bond market rally.
The Chicago Fed National Activity Index shows economic expansion
The Chicago Fed National Activity Index measures whether the economy is expanding on, above, or below its historical trend.
Why household formation drives homebuilder demand (Part 1)
Low household formation numbers over the past five years will drive homebuilder demand going forward Since the financial crisis began, demand for new construction has fallen, as household formation numbers have dropped. The low household formation numbers have been driven by a poor economy—not by demographics. This represents pent-up demand that must be satisfied in […]
Housing starts rebound, driven by multi-family construction
Housing starts are a critical predictor of future homebuilder sales Housing starts are released jointly by the Census Bureau and the Department of Housing and Urban Development. Analysts use the information to anticipate future production for homebuilders, future demand for raw materials, and labor costs. This data will even affect the forecasts for home-related retailers, […]
Why the subdued Consumer Price Index gives the Fed an excuse
This report will probably hold the hawks on the Fed at bay and allow them to continue to maintain ultra-low interest rates. That said, the bond market has been pricing in a tapering of quantitative easing.
Why the MBA Purchase Index fell but housing remains affordable
The MBA Purchase Index fell by 0.4% last week, which is somewhat surprising given that rates fell and even refinances rose.
Week in review: Bonds fell slightly as the government shut down
The ten-year bond is the basis for all mortgage pricing Long-term interest rates are priced off the benchmark long-term bond, which is the ten-year Treasury. These days, the ten-year bond reacts to economic data through the Federal Reserve’s asset purchase program, also known as quantitative easing (or QE). As a general rule, economic data that shows […]
Consumer credit increases in August, good for homebuilder stocks
Consumer credit increased $13.6 billion (or 5.4% annualized) in August, as non-revolving credit increased 8.0% and revolving credit fell 1.2%.
Richmond Fed Manufacturing Survey dives in July, homebuilders unaffected
The Richmond Fed Manufacturing Survey looks at business conditions in the Fed’s fifth district, which covers Washington, DC, Baltimore, Richmond, and Charlotte The Richmond Fed Manufacturing Survey is sent out to companies in the Mid-Atlantic states and covers current business conditions, shipments, new orders, backlog, and inventory. It’s similar to the other surveys put out […]
The CoreLogic Index shows home price appreciation is decelerating
The CoreLogic Index is a widely followed index of real estate values. Unlike the other major indices—like Case-Shiller or Radar Logic—CoreLogic separates distressed sales from non-distressed sales.
Homebuilder opportunity: Mortgage purchase applications fall, but still strong
The MBA Purchase Index is an important index that forecasts housing activity The Mortgage Bankers Association (MBA) index of purchase activity measures application activity, not loans made. The Mortgage Bankers Association samples roughly 75% of all mortgage activity in the U.S., and its indices are key indicators for the real estate finance market and home […]
Industrial production rebounds in August, good for homebuilders
Industrial production is a bellwether of economic activity Industrial production is a good top-down macroeconomic indicator that helps forecast the labor market, final demand, consumption, and inflation. While manufacturing is no longer the primary driver of the U.S. economy, it still influences the economy to a large degree—particularly for unskilled workers. U.S. manufacturing has been […]
Housing starts dampened by wet weather in the Midwest
Housing starts are a critical predictor of future home builder sales Housing starts are released jointly by the Census Bureau and the Department of Housing and Urban Development. Analysts use the information to anticipate future production for home builders, future demand for raw materials, and labor costs. This data will even affect the forecasts for […]
Philly Fed Index drops after huge months, but outlook optimistic
The Philadelphia Fed Survey is an important survey about economic expectations in the Mid-Atlantic region The diffusion index is based on the number of businesses reporting increased activity less the number of businesses reporting decreased activity. It also includes an index of expectations six months out. The survey drills down into orders and shipments, employment, […]
Must-know: The Fed reduces asset purchases by another $10 billion
Yesterday, the Federal Reserve ended its January Federal Open Market Committee meeting and decided to continue to reduce asset purchases. This was Ben Bernanke’s final FOMC meeting.
Mid-Atlantic manufacturing is picking up, helping homebuilders
The Richmond Fed Manufacturing Survey looks at business conditions in the Fed’s fifth district, which covers Washington, DC, Baltimore, Richmond, and Charlotte.
Higher Residential Construction Spending Keeps Sector Going
Spending on private construction, which accounts for more than 71.8% of all construction spending, fell 0.5% in January.
Low Rental Vacancy Rate Pushes Builders into the Market
The drop in the rental vacancy rate indicates that owning a home still isn’t affordable for many people, despite the economic revival.
Understanding the key to consumer confidence for homebuilders
Consumption is the major driver of the U.S. economy. It accounts for 70% of GDP. Consumption has been relatively subdued since the recession began, as Americans have boosted their savings rate and spent only on essentials.
Standard Pacific Homes’ background affects its 2Q14 earnings
Founded in 1965, Standard Pacific (SPF) is a Southern California–based builder with operations in California, Florida, the Carolinas, Texas, Arizona, and Colorado.
Why the FOMC and earnings drove bonds, REITs, and builders
Last week had some important data points with the FOMC meeting and also some key economic reports. The Fed decided to make another reduction in asset purchases.
Why the key to the recovery is the first-time homebuyer
The first-time homebuyer has had a number of big issues to contend with. The biggest one has been a lousy job market for recent college graduates.
Why bonds sold off on stronger economic data and a hawkish Fed
The Fed’s economic outlook remained relatively constructive and it set the stage for a December taper.
Week in Review: Jobs, REIT earnings, and key homebuilder mergers
Last week, we had some important data points—with the advance estimate for third quarter GDP and the all-important jobs report.
Insured unemployed and initial jobless claims predict unemployment
The insured unemployment rate The insured unemployment rate is the number of unemployed people who are eligible for unemployment insurance. These people are the most recently laid-off and therefore have the freshest skills. A drop in the insured unemployment rate is the strongest predictor of a drop in the future unemployment rate. This makes sense, […]