S&P/Case-Shiller: Good news/bad news in June

The S&P/Case-Shiller home price index figures were just released. The good news? Home prices in 20 major metropolitan areas rose 4.2% year-over-year in June, compared with forecasts for a gain of 3.5%. On a monthly basis, the index was up 0.28% from May as well.

The moderately bad news? That 0.28% gain was the smallest since the monthly numbers went positive in April. The really bad news? These figures clearly reflect the lagged impact of the burst in spring sales brought about by the tax credit. Since the credit expired and the economy started rolling over again, home sales have taken an Acapulco-style cliff dive. Anyone who thinks that won't impact the pricing figures down the road needs to spend some time reading his Economics 101 textbook.

Housing starts up, permits down in July

The latest figures on home construction just hit the tape. So what happened in July?

* Overall housing starts climbed 1.7% from June to a seasonally adjusted annual rate of 546,000. That missed expectations for a reading of 560,000. June's figure was revised down to 537,000 from 549,000. Building permits slumped 3.1% to 565,000 from a downwardly revised 583,000, worse than the 0.5% decline that economists were expecting. That leaves permits at the lowest level since May 2009.

* By property type, single family starts dropped 4.2%, the third monthly decline in a row. They're now running at a 14-month low. The volatile mutlifamily category jumped 32.6% after plunging 33.3% a month earlier. Single family permits dropped 1.2% -- the fourth decline in a row -- while multifamily permits slumped 8%.

* Starts were strong in the Northeast (+30.5%) and Midwest (+10.7%). But they were flat in the West and down 6.3% in the South. Permits dropped in most of the country, falling 25.9% in the Northeast, 4.9% in the West, and 1.1% in the Midwest. But they rose 3.9% in the South.

When you can't sell homes, you aren't going to build them. So it should be no surprise that builders are still sitting on their hands. In July, single-family starts fell to their lowest level in more than a year, while permitting activity slumped to the lowest since May 2009. Regional performance was mixed when it came to starts, but relatively poor on the permitting front.

Normally an upswing in construction helps the economy emerge from recession. But not this time. Construction activity remains anemic, and the industry continues to hemorrhage jobs. The ironic thing is that new home inventory is extremely lean. The oversupply problem there has been "fixed." But since there's so much competition from nearly-new distressed inventory and foreclosures, builders aren't willing or able to ramp up activity. Hence, no housing recovery.

NAHB index slumps in August to 17-month low

The National Association of Home Builders just released its latest numbers on the housing market. The overall index slumped to 13 from 14, compared with expectations for a slight increase. That's the worst level going all the way back to March 2009.

The subindex that measures current sales slipped to 14 from 15, while the index that measures expectations about the future tanked to 18 from 21. The subindex tracking buyer traffic was unchanged at 10. Regionally speaking, the index declined to 18 from 24 in the Northeast, to 13 from 14 in the South, and to 8 from 9 in the West. The Midwest index held steady at 15.

The double dip in housing continued into August, according to the latest figures from the NAHB. The group's overall housing index fell to its lowest level since March 2009, with builders gloomy about both current sales and market conditions down the road.

What's going on? Well, we have incredibly cheap mortgage rates and cheap home prices. But buyers just aren't stepping up to the plate. This fits with the "no jobs = no home sales" thesis I laid out a few months ago. Unless and until the job market improves, we are simply not going to get any traction in the housing market. And so far, job growth is missing in action.

Pending home sales slump again

Pending home sales were just reported for June. They slumped another 2.6% in the month after a 29.9% plunge in May. That failed to meet market expectations for a 4% gain. Moreover, sales were weak in three out of four regions of the country -- down 0.2% in the West, down 9.5% in the Midwest, and down 12.2% in the Northeast. They ticked up 3.7% in the South. The index, at 75.7, is off 18.6% from its year-ago level and the lowest in history.

If you're looking for a pulse in the U.S. housing market, best of luck. I can't seem to find one. Pending home sales fell once again, with broad-based geographic declines and a nominal new low for the index, first published in 2001. Leading indicators like the Mortgage Bankers Association's index of purchase loan applications also can't get off the mat.

What's remarkable about the weakness is that it's coming at a time where mortgage rates are hovering around 4.5%. These aren't just the lowest mortgage rates in the past several years. Some research suggests they're the lowest since before the Wright Brothers first flew at Kitty Hawk! Unless and until we get a rebound in the labor market, we're just not going to see good things happening in housing.