SLOW IMPROVEMENT SURE BEATS NO IMPROVEMENT!
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Transcript of SLOW IMPROVEMENT SURE BEATS NO IMPROVEMENT!
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Presented by: Elliot F. Eisenberg, Ph.D.
President: GraphsandLaughs, LLCMMG Expert Advisory Board Member
SLOW IMPROVEMENT SURE BEATS NO IMPROVEMENT!
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In addition to contributing to the Mortgage Market Guide Expert Advisory Board, Elliot Eisenberg, Ph.D. is a nationally acclaimed economist and former Senior Economist with the National Association of Home Builders in Washington, DC. He is a national speaker on the economic impact of homebuilding, consequences of government regulation, cost-benefit analysis, strategic business development and other current economic issues.
Elliot F. Eisenberg, Ph.D.
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Here’s What We’ll Cover• What do your clients need to know about interest rates - and
how can you get them off the fence and into action?
• Could QE3 spark inflation this year and cause home loan rates to rise?
• How long will the Fed support the mortgage market? • Is the budget deficit really a concern?
• Can the improvement in the U.S. economy continue?
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The Data!
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Historical Job Growth Month over Month Employment Change
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Net New Payroll Jobs Per Month
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Total Employment Levels Well Below PeakTotal Non-farm Employment
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Real Per Capita Disposable Income is Flat
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Annual Y-o-Y Percent Change in GDP
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Trucking Tonnage Has Recovered
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Container Traffic Has More Than Recovered
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As Have Factory Utilization Rates
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As Have Orders for Capital Goods
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ISM Non-Manufacturing Numbers are Up!
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Corporate Profits are Growing Dramatically
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The Stock Market is Doing Very Well
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Commercial Real Estate is Recovering
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Money is Not Being Lent
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Monetary Velocity Drops Like a Rock
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Core PCE Price Index: No Inflation Anywhere!!
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Thus Low, but Not Lower Interest Rates!
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Consumer Confidence While Historically Low, is Up!
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Same With Small Business Confidence
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ISM Numbers are Down but Holding!
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Trade Deficit is Flattening Out….Maybe Worsening
It may slightly hinder employment growth
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Budget Situation Looks Bad but……….
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It is Improving…See!
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Budget Situation is Bad but Improving….Really!
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Budget Situation is Improving. Really It is!
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Best of All, No Recession is in the Cards!
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What About Housing?
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House Prices Have Bottomed….Really They Have!!!!Real house prices
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Negative Equity is Less and Less of a Problem
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Seriously Delinquent Loans Trending Lower
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Even in Hard Hit San Bernardino, CA
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Foreclosures are Declining as a % of Sales
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REO Inventory is declining too!
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Existing Home Inventories Are Falling Fast
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MBA Mortgage Purchase Applications – Ignore Noise!
Investors are keeping them down
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Households are Repairing their Balance SheetsMore Income to Spend Elsewhere
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New Home Prices – In Recovery Mode
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Single-Family Starts – Beginning a Recovery
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Existing Single-Family Home Sales
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U.S. Home Ownership Rate Continues to Fall
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Multifamily Housing Starts Stupendous Response from Growth in
Renters!!!!!
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Lumber Prices are a Problem!
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What About Things Here?
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Things Look Pretty Good
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The Future Looks So Bright, I’ll Need Shades
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But…..Maybe Not due to Sequestration!
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A Large Share of Mortgages Are Underwater% of Total Mortgages
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Let’s Do this Without A Lawyer, Thank You!
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Center of the Country is Strongest
FL #1NV #2AZ #3GA #4IL #5CA #6
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State Unemployment RateSignificant differences across states
%
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House Price Recovery Rates Vary
Significant differences across cities
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House Price Recovery Rates Vary Significant differences across states
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Long Road Back to Normal* for Single-Family Housing Starts – Q4 2013
* Normal is the average from Q1 2000 to Q4 2003
* Normal Production is measured as Single-Family housing starts between Q1
2000 and Q4 2003
Single-Family Housing StartsRelative to Normal
Less than 45%
45% to 49%49% to 61%61% to 70%Greater than 70%