Last week’s economic reporting included home prices, inflation, and pending home sales readings. Weekly readings on mortgage rates and jobless claims were also published.
S&P Case-Shiller Home Price Indices Report Slower Home Price Growth in January
Home price growth cooled in January according to S&P Case-Shiller’s 20-City Home Price Index. Home prices increased by 2.50 percent year-over-year in January but rose at a slower pace than December’s reading of 4.60 percent. The FHFA Home Price Index also showed slower growth in January with year-over-year home price growth of 5.30 percent as compared to December’s home price growth rate of 6.60 percent.
The top three cities for home price growth in the 20-City Home Price Index were Miami, Florida, Tampa, Florida, and Atlanta, Georgia. In contrast, western U.S. cities posted the most declines in home prices. San Francisco, California, Seattle, Washington, and Portland, Oregon posted the steepest declines in home values in January. Home prices in western cities grew rapidly before the pandemic and are falling in post-pandemic markets.
Rapidly rising mortgage rates have narrowed the pool of qualified homebuyers and ongoing shortages of available homes are keeping home prices relatively high. As long as demand for homes exceeds available homes, it’s unlikely that housing markets will crash, but prospective buyers seem wary of recently rising mortgage rates and a slowing economy.
Mortgage Rates Fall as Jobless Claims Rise
Freddie Mac reported lower average mortgage rates last week as the rate for 30-year fixed-rate mortgages fell by 10 basis points to 6.32 percent. Rates for 15-year fixed-rate mortgages fell by 12 basis points and averaged 5.56 percent. Lower rates were welcome especially when some analysts expect mortgage rates to climb past eight percent in coming months.
198,000 new jobless claims were filed last week and outstripped predictions of 195,000 claims filed and the prior week’s reading of 191,000 first-time claims filed.
The final edition of the University of Michigan’s Consumer Sentiment Survey for March fell from an index reading of 67 to 62. Index readings above 50 indicate that most consumers surveyed have a positive view of current economic conditions, Current sentiment remains below an index reading of 101 recorded before the pandemic.
What’s Ahead
This week’s scheduled economic reporting includes readings on construction spending, public and private-sector reports on job growth, and the national unemployment rate. Weekly readings on mortgage rates and jobless claims will also be released.