One month does not a trend make, but the economic news over the past week suggests we may be reaching a turning point.
The rate of decline in home prices finally appears to have peaked (hard to see in this chart–see this post).
Today’s Pending Home Sales ticked up 6% in December.
Yesterday’s loan officer survey showed fewer banks than last month tightening loan standards. Asha Bangalore at Northern Trust, who compiled these excellent charts, notes the following: “Although the history of these data is short, in 2001, the demand for loans turned around only after the recession had reached its last leg, where as the peak for the number of banks reporting tightening standards peaked slightly ahead.”
Spreads on bank loans, meanwhile, are tightening:
Fewer banks are tightening lending standards for mortgages, and consumer demand for mortgages is increasing.
Demand for consumer loans has stabilised:
Banks are making more consumer loans:
Consumers are saving more again (savings rate is still low in historical terms, but it has ticked up considerably).
Yesterday’s ISM showed a positive change in trend:
Does all this mean we’re out of the woods? No. But it could be the beginning of a change in the rate of decline.