Last week’s economic reports included readings on home prices, pending home sales, and construction spending. Data on public and private-sector employment and the national unemployment rate were published along with weekly readings on mortgage rates and jobless claims.
Case-Shiller: Record Home Price Growth in Phoenix, but Will it Last?
Case-Shiller Home Price Indices indicated fast growth in home prices as the national home price growth rate for January grew to 11.20 percent from December’s reading of 10.40 percent national home price growth. Case-Shiller’s 20-City Home Price Index reported 19 of 20 cities reported rising home prices in January, but Cleveland, Ohio home prices were lower. Detroit, Michigan resumed reporting to the 20-City Home Price Index after nearly a year’s absence.
Phoenix, Arizona led the January 20-City Home Price Index with a seasonally-adjusted annual pace of 15.80 percent; Seattle, Washington, and San Diego, California followed with home price growth of 14.30 percent and 14.20 percent.
Analysts expressed concerns that rapidly rising home prices are not sustainable in the long term and cited rising mortgage rates and skyrocketing home prices as obstacles to homebuying. As demand for homes eases, home price growth will slow.
The Commerce Department reported fewer pending home sales in February as pending home sales fell by 10.60 percent. Analysts expected pending home sales to fall to -3.10 percent; pending home sales dropped by -2.40 percent in January. Construction spending fell by -0.80 percent in February; it was expected to fall by one percent as compared to January’s positive reading of 1.25 percent growth in construction spending. Rising lumber prices and severe winter weather influenced construction spending in February.
Mortgage Rates Hold Steady, Jobless Claims Mixed
Freddie Mac reported little change in mortgage rates last week. The average rate for 30-year fixed-rate mortgages rose one basis point to 3.18 percent; Rates for 15-year fixed-rate mortgages averaged 2.45 percent and were unchanged. The average rate for 5/1 adjustable rate mortgages was also unchanged at 2.84 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages, 0.60 percent for 15-year fixed-rate mortgages, and 0.30 percent for 5/1 adjustable rate mortgages.
The Census Bureau reported 719,000 new jobless claims last week; this surpassed the prior week’s reading of 658,000 initial claims. Ongoing jobless claims fell to 3.79 claims filed as compared to the prior week’s reading of 3.80 million continuing jobless claims filed.
Private-sector jobs grew by 525,000 jobs in March but fell short of the expected 525,000 private-sector jobs added. Public and private-sector jobs also ramped up with 916,000 jobs added in March. Analysts expected 675,000 jobs added to the Non-Farm Payrolls report; 468,000 public and private-sector jobs were added in February. The national unemployment rate decreased to 6.00 percent from February’s reading of 6.20 percent.
What’s Ahead
This week’s scheduled economic releases include job openings and minutes of the recent Federal Open Market Committee meeting. Weekly readings on mortgage rates and jobless claims will also be reported.
The S&P Case-Shiller National Home Price Index posted its highest gain in nearly 15 years with a year-over-year home price growth rate of 11.20 percent in January. The December 2020 National Home Price Index reported 10.40 percent home price growth. The S&P Case-Shiller 20-City Home Price Index reported 11.10 percent year-over-year growth with 19 of 20 cities reporting higher home prices. Cleveland, Ohio was the only city reporting no home price growth in January. Detroit, Michigan reported home price growth data for the first time in nearly a year.