News & Events

Archive for March, 2017
 
Economic Advisor: March 29, 2017
March 29, 2017


 

Existing home sales retreated while new home sales advanced, and layoffs saw an unexpected jump.

Existing Home Sales

After hitting their highest point in nearly 10 years in January, existing homes dipped in February. Sales of existing single-family homes, townhomes, condominiums and co-ops fell 3.7 percent to an annual rate of 5.48 million in February from January’s rate of 5.69 million, the National Association of Realtors reported last week.

That said, a retreat from January’s strong showing was anticipated, as the market had expected sales to fall to a pace of 5.54 million. Moreover, when compared annually, February’s sales were 5.4 percent higher than February 2015.

So why the drop? National Association of Realtors Chief Economist Lawrence Yun chalked it up to one overriding factor: declining affordability.

“Realtors are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that’s pushing up price growth and pressuring the budgets of prospective buyers,” he explained. “Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market.”

Looking at price, February’s median price for all types of existing homes came in at $228,400, which was 7.7 percent higher than February 2016’s median price of $212,100. This marked the 60th straight month of year-over-year price gains.

In terms of housing supply (a key factor in controlling prices), the number of homes for sale at the end of February grew 4.2 percent to 1.75 million units, representing a 3.8-month supply at February’s sales pace. While that growth is encouraging, February’s inventory was 6.4 percent lower than February 2016’s 1.87 million homes, and marked the 21st consecutive month of year-over-year inventory attenuation.

New Home Sales

Meanwhile, new real estate enjoyed some good news. Sales of new, single-family houses during February grew 6.1 percent to hit an annual rate of 592,000, according to last week’s joint report from the Census Bureau and the Department of Housing and Urban Development. Compared to the same period last year, February’s new home sales were 12.8 percent higher than February 2016’s pace of 525,000.

Looking at price, February’s median sales price for new homes was $296,200, and the average price was $390,400. In terms of supply, the number of new houses for sale at the end of February totaled 266,000, which represented a 5.4-month supply at February’s sales pace.

“This growth was likely spurred by several factors, including a warm winter that allowed builders to stick to construction schedules, last year’s strong home construction starts, and a gradual shift from building apartments to individual homes,” noted Joseph Kirchner, senior economist at Realtor.com. “… While this growth is encouraging, it’s important for house hunters to keep in mind that builders have been focusing on the more pricey part of the market; affordable options are still in short supply.”

Initial Jobless Claims

First-time claims for unemployment benefits filed by the newly jobless during the week ending March 18 saw a surprise jump to 261,000, an unexpected spike of 15,000 claims over the preceding week’s total of 246,000, the Employment and Training Administration reported last week. The market had expected claims to total 239,000.

Meanwhile, the four-week moving average — considered a more reliable measure of jobless claims than the weekly snapshot — ticked up to 246,500, a gain of 3,500 claims from the previous week’s average of 243,000.

In any case, jobless claims remained in safe territory. This marked the 106th consecutive week that initial jobless claims were below the 300,000-claim mark, a threshold that economists say indicates a growing job market.

This week, we can expect:

  • Tuesday — Wholesale inventories for February from the Census Bureau; consumer confidence for March from The Conference Board.
  • Thursday — Fourth quarter gross domestic product, third estimate, from the Bureau of Economic Analysis; initial jobless claims for last week from the Employment and Training Administration.
  • Friday — Personal incomes and spending for February from the Bureau of Economic Analysis; consumer sentiment for March from the University of Michigan Survey of Consumers.

Posted in Economic Advisor



Economic Advisor: March 22, 2017
March 22, 2017


 

Housing starts enjoyed solid performance, while initial jobless claims dipped slightly, and retail sales saw mild improvement.

Housing Starts     

Starts on construction of private housing grew 3 percent in February to hit an annual rate of 1.28 million, according to last week’s report issued by the Census Bureau and the Department of Housing and Urban Development. Compared annually, this was 6.2 percent higher than February 2016’s rate of 1.21 million

Perhaps the biggest news from the report was that starts on single-family housing starts in February grew 6.5 percent to hit a rate of 872,000. This was the highest level for starts on single-family homes since 2007.

“This month’s gain in single-family starts is consistent with rising builder confidence in the housing market,” said National Association of Home Builders Chairman Granger MacDonald in a public statement. “We should see single-family production continue to grow throughout the year, tempered somewhat by supply-side constraints such as access to lots and labor.”  

Permits issued for the construction of private homes dipped 6.2 percent in February to an annual rate of 1.21 million. That said, compared annually, the rate was 4.4 percent higher than February 2016’s rate of 1.16 million. Permits issued in February for construction of single-family homes grew 3.1 percent to hit an annual rate of 832,000.

Initial Jobless Claims

First-time claims for unemployment benefits filed during the week ending March 11 dipped to 241,000, a decline of 2,000 claims from the prior week’s total of 243,000, the Employment and Training Administration reported last week.

The four-week moving average — which job market watchers feel is a more reliable measure of lay-off activity — notched up to 237,250, a gain of 750 claims from the preceding week’s average of 236,500.

This marked the 106th straight week that jobless claims have come in at below the 300,000-claim mark, a benchmark economists consider an indicator of a strong labor market.

Retail Sales

Retail sales for February improved, but weren’t at their best, posting their smallest gain in six months. Retail sales for February 2017 ticked up just 0.1 percent to $474 billion, the Census Bureau reported last week. Compared annually, February’s performance was 5.7 percent higher than February 2016.

Several categories had a rough month, including electronics and appliances, which fell 2.8 percent; department stores, which were down 1.1 percent; miscellaneous retailers, which shrank by 0.8 percent; gas stations, which dropped 0.6 percent. Strong performers included building material and garden stores, which were up 1.8 percent, and non-store retailers (such as online stores or kiosks), which were up 1.2 percent.

This week, we can expect:

  • Wednesday — Existing home sales for February from the National Association of Realtors.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration; new home sales for February from the Census Bureau.
  • Friday — Durable goods orders for February from the Census Bureau.

Posted in Economic Advisor



Economic Advisor: March 15, 2017
March 15, 2017


 

The economy continued to add jobs on the whole, but layoffs saw a sudden jump. Meanwhile, consumer credit grew, but saw a stiff setback.

Employment Situation

The U.S. economy added 235,000 non-farm jobs in February, putting the unemployment rate back at 4.7 percent, according to last week’s report from the Bureau of Labor Statistics. Job growth categories included construction, private education, manufacturing, healthcare, and mining. All told, there were 7.5 million unemployed Americans for the month.

The number of Americans without a job for 27 weeks or longer — the so-called long-term unemployed — hovered at 1.8 million for the month, accounting for 23.8 percent of the unemployed population. Over the past 12 months, the number of long-term unemployed has decreased by 358,000.

The labor force participation rate for February (the percentage of employable Americans either employed or actively looking for work) saw little change at 63 percent.

February’s average hourly earnings for all employees grew by 6 cents to $26.09, following January’s 5-cent increase. Over the year, average hourly earnings have grown by 71 cents, or 2.8 percent.

“It’s definitely a solid report,”, George Washington University Economist Tara Sinclair told the Washington Post. “This is the kind of number that the Federal Reserve was looking to receive before their meetings next week.”

Initial Jobless Claims

Turning to more recent employment news, layoffs saw a spike, with first-time claims for unemployment benefits filed by the newly unemployed during the week ending March 4 hitting 243,000, the Employment and Training Administration reported last week. This was a sizable jump of 20,000 claims over the preceding week’s total of 223,000. While job market watchers had expected an increase in initial claims, they had expected a smaller gain of 17,000 claims.

Still, initial jobless claims remained in safe territory. Last week’s report marked the 105th week of initial jobless claims totaling below 300,000 claims, a level that economists consider indicates a growing job market.

The four-week moving average — considered a more reliable measure of layoffs — notched up to 236,500 claims, a gain of 2,250 claims from the prior week’s average of 234,250.

Consumer Credit

Consumer borrowing grew by 2.8 percent during the month of January, to hit a total volume of $3.77 trillion, according to last week’s report from the Federal Reserve. The market had expected a $17 billion gain for the month, rather than January’s $8.8 billion increase. January’s tiny gain was the smallest increase for consumer credit in five years.

The big driver for the month’s growth was non-revolving debt, such as student or car loans, which grew 5.5 percent to hit a total of $2.77 trillion. Meanwhile, revolving debt, such as credit cards, fell by 4.6 percent in January, to a total of $995.1 billion, down from December 2016’s $998.9 billion. Some economists chalked up the drop in revolving debt to a post-holiday focus by consumers on paying down credit card balances after seasonal gift buying.

This week, we can expect:

  • Tuesday — Producer Price Index for February from the Bureau of Labor Statistics.
  • Wednesday — Consumer Price Index for February from the Bureau of Labor Statistics; retail sales for February and business inventories for January from the Census Bureau.
  • Thursday — Housing starts and building permits for February from the Census Bureau; initial jobless claims for last week from the Employment and Training Administration.
  • Friday — Leading economic indicators for February from The Conference Board; industrial production and capacity utilization for February from the Federal Reserve.

Posted in Economic Advisor



Economic Advisor: March 8, 2017
March 8, 2017


 

Spending on residential construction grew despite a monthly overall drop. Meanwhile, monthly incomes and spending totals offered mixed performance, and layoffs fell to their lowest point in nearly 44 years.

Construction Spending

Construction spending for January grew to an annual rate of $1.18 trillion, marking a 1 percent dip from December’s rate of of $1.19 trillion, the Census Bureau reported last week. Compared annually, January’s overall construction spending was 3.1 percent higher than January 2016’s annual rate of $1.14 trillion.

While overall spending was down, spending on private construction was up, growing 0.2 percent over December 2016’s rate of $909.4 billion to an annual rate of $911.6 billion for the month.

Residential construction spending hit an annual rate of $476.4 billion in January, which was 0.5 percent higher than December’s pace of $474 billion. Construction spending on single-family homes grew to an annual rate of $ 253,806, which was 1.1 percent up from December 2016’s spending. Spending on construction of multi-family units grew 2.2 percent for the month to an annual rate of $63.5 billion.

Incomes and Spending

Incomes were up while spending fell behind. Personal incomes for January grew 0.4 percent for a $63 billion gain according to last week’s report from the Bureau of Economic Analysis. This beat out market predictions of a 0.3 percent gain. Disposable personal income (DPI; income after taxes) grew 0.3 percent for a gain of $40.1 billion.

Meanwhile, personal consumption expenditures (PCE) for January increased 0.2 percent for a $22.2 billion increase. This was off from predictions of a 0.3 percent increase.

All told, personal outlays (which include PCE, as well as other outlays such as interest and mortgage payments) grew $24 billion in January. This put personal savings for January at $795.7 billion, and the personal saving rate (personal saving as a percentage of PDI) at 5.5 percent.

“Bottom line, there was a decline in real spending in January as higher inflation took a greater share of spend,” Peter Boockvar of economic advisers The Lindsey Group wrote last week. “This points to the importance of quicker wage growth which hopefully we soon get even though I’ve been saying that for a while. The Fed will raise rates in two weeks but that will only bring the fed funds rate to just .875 percent with real interest rates still firmly negative.”

Initial Jobless Claims

Layoffs continued their long-running drop with initial jobless claims falling to their lowest point since March 1973. First-time claims for unemployment benefits filed by the newly laid off during the week ending February 25 plummeted to 223,000, a drop of 19,000 claims from the prior week’s total of 242,000. Jobless claims haven’t been this low since March 31, 1973’s total of 222,000 claims.

The four-week moving average — considered a more stable gauge of layoffs — dropped to 234,250 claims, a decline of 6,250 claims from the preceding week’s average of 240,500. This was the lowest level for the average since April 14, 1973’s average of 232,750.

All told this marked the 104th week that jobless claims have come in below the 300,000-claim mark that economists consider indicates a growing job market.

This week, we can expect:

  • Monday — Factory orders for January from the Census Bureau.
  • Tuesday — The trade balance for January from the Census Bureau; consumer credit for January from the Federal Reserve.
  • Wednesday — Revised fourth quarter productivity from the Bureau of Labor Statistics; January wholesale inventories from the Census Bureau.
  • Thursday — February import and export prices from the Census Bureau; initial jobless claims for last week from the Employment and Training Administration.
  • Friday —February budget from the Treasury Department; February unemployment, payrolls, hourly earnings and average workweek from the Bureau of Labor Statistics.

Posted in Economic Advisor



Economic Advisor: March 1, 2017
March 1, 2017


 

Existing home sales kicked off 2017 with a roaring start, while new home sales grew at a lower than anticipated rate, and layoffs were up.

Existing Home Sales

Sales of existing homes for January grew to their fastest pace in nearly a decade, according to data released by the National Association of Realtors last week.

Total sales of existing single-family homes, townhomes, condos and co-ops, grew 3.3 percent to reach an annual rate of 5.69 million for the month. Compared annually, January’s sales were up 3.8 percent from January 2016’s 5.48 million. This was the strongest monthly performance since February 2007’s rate of 5.79 million.

“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” said NAR Chief Economist Laurence Yun. “Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions.”

January’s median price for existing homes of all types hit $228,900, which compared annually, was 7.1 percent higher than January 2016’s $213,700. This marked the 59th straight month of year-over-year price gains.

Looking at supply, the inventory of existing homes for sale at the end of January grew 2.4 percent to 1.69 million homes for sale, representing a 3.6-month inventory of homes for sale at January’s sales rate. That said, this was still down 7.1 percent from January 2016’s 1.82 million, marking the 20th straight month of year-over-year inventory contractions.

New Home Sales

Turning to new real estate, sales of new single-family homes during January grew 3.7 percent to an annual rate of 555,000, the Census Bureau and the Department of Housing and Urban Development reported last week. Compared annually, January’s sales were 5.5 percent higher than January 2016’s pace of 526,000.

While up for the month, January’s sales were below market expectations, which had anticipated a surge to a rate of 566,000. Jonathan Smoke, Chief Economist of Realtor.com, chalked up the slowdown in growth rate to various, supply-side factors impacting home builders, such as regulatory burdens, labor shortages, and a lack of capital and financing.

“Those reasons are partly why new homes cost 37 percent more than existing homes, based on differences in median prices, and that difference is keeping the new home market from growing to take advantage of strong demand,” he said. “Consumers who have the luxury of being able to wait for a new home to be built and pay a little more can avoid the cutthroat competition we’re seeing for existing homes — but lots of people don’t have that option.”

The median sales price for new houses sold in January was $312,900, and the average sales price was $360,900. Looking at inventory, the supply of new homes for sale at the end of January totaled 265,000, representing a 5.7-month supply at January’s sales pace.

Initial Jobless Claims

First-time claims for unemployment benefits filed by the recently laid off grew more than expected. Initial claims filed during the week ending February 18 hit 244,000, a gain of of 6,000 claims over the preceding week’s total of 238,000, the Employment and Training Administration reported last week. While up, initial claims remained well below the 300,000-claim mark, a level economists consider indicative of a growing job market.

The four-week moving average — considered a more stable measure of layoffs — dipped to 241,000, a decline of 4,000 claims from the prior week’s average of 245,000. This marked the lowest average since the week of July 21, 1973’s average of 239,500.

This week, we can expect:

 

  • Monday — Durable goods orders for January from the Census Bureau.
  • Tuesday — Second estimate of fourth quarter gross domestic product from the Bureau of Economic Analysis; consumer confidence for February from The Conference Board.
  • Wednesday — Personal incomes and spending for January from the Bureau of Economic Analysis; construction spending for January from the Census Bureau; car and truck sales for February from the auto makers.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration.

Posted in Economic Advisor



Search News & Events
News Categories
Monthly Archives
Get started now

Fill out an online application today. It's easy.

Checklist complete?

Get your documents in order and we'll handle the rest.

NADA Guides

Value your mobile, modular
or manufactured home.