The Housing Chronicles Blog: 2018

Tuesday, April 24, 2018

March Investor Confidence Index rose 3.0 points from February

The Global Investor Confidence Index increased to 114.5, up 3.0 points from March's revised reading of 111.5. Investors across all regions expressed an appetite for risk, with the North American ICI increasing from 109.1 to 112.3.

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March consumer confidence rebounded moderately from February

Consumer confidence increased moderately in April after a decline in March. Consumers' assessment of current conditions improved somewhat, with consumers rating both business and labor market conditions quite favorably. Consumers' short-term expectations also improved, with the percent of consumers expecting their incomes to decline over the coming months reaching its lowest level since December 2000.

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February Case-Shiller Index up 0.4 percent from January and 6.1 percent year-on-year

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 6.3% annual gain in February, up from 6.1% in the previous month.  Before seasonal adjustment, the National Index posted a month-over-month gain of 0.4% in February.

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February FHFA House Price Index up 0.6 percent from January and 7.2 percent year-on-year

The FHFA House Price Index (HPI) reported a 0.6-percent increase in U.S. house prices in February from the previous month. From February 2017 to February 2018, house prices were up 7.2 percent.

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March new home sales up 4.0 percent from February and 8.8 percent year-on-year

Sales of new single-family houses in March 2018 were at a seasonally adjusted annual rate of 694,000. This is 4.0 percent above the revised February rate of 667,000 and is 8.8 percent above the March 2017 estimate of 638,000.

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Monday, April 23, 2018

US private sector output rises solidly in April, underpinned by fastest new order growth since March 2015

US private sector output rises solidly in April, underpinned by fastest new order growth since March 2015. At 54.8 in April, up from 54.2 in March, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index indicated a faster upturn in business activity across the private sector.

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March Chicago Fed National Activity index fell due to slower growth

Led by slower growth in production- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +0.10 in March from +0.98 in February. The index's three-month moving average, CFNAI-MA3, decreased to +0.27 in March from +0.31 in February.

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March existing home sales up 1.1 percent from February but still down 1.2 percent year-on-year

Total existing-home  sales rose 1.1 percent to a seasonally adjusted annual rate of 5.60 million in March. Despite last month's increase, sales are still 1.2 percent below a year ago. The median existing-home price for all housing types in March was $250,400, up 5.8 percent from March 2017 ($236,600).

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Thursday, April 19, 2018

Initial unemployment claims dip 1,000 in weekly report

In the week ending April 14, initial unemployment claims were 232,000, a decrease of 1,000 from the previous week's unrevised level of 233,000. The 4-week moving average was 231,250, an increase of
1,250 from the previous week's unrevised average of 230,000.

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Mortgage applications rise 4.9 percent, rates flat

The Market Composite Index increased 4.9 percent on a seasonally adjusted basis from one week earlier, with purchase loans up 6.0 percent and refinances up 4.0 percent. The average contract interest rate for 30-year fixed-rate mortgages remained unchanged at 4.66 percent.

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April Philadelphia Fed's Business Outlook Survey positive, but prices rising

Results from the April Manufacturing Business Outlook Survey suggest continued growth for the region's manufacturing sector. The firms also reported higher prices for both inputs and their own manufactured goods this month. The survey's future indexes, measuring expectations for the next six months, reflected continued optimism.

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March Leading Economic Index up 0.3 percent, but labor market bears watching

The U.S. LEI increased 0.3 percent in March, and while the monthly gain is slower than in previous months, its six-month growth rate increased further and points to continued solid growth in the U.S. economy for the rest of the year.  However, labor market components made negative contributions in March and bear watching in the near future.

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First Quarter Economic Update: Green Shoots Everywhere, but Tariff Impacts Unknown

By almost all measures, the U.S. economy continues to strengthen, for the 3rd-longest recovery of 33 different business cycles since 1854.

As of mid-April, GDP growth is estimated to have risen by 2.0 percent during the first quarter of 2018, but was recently downgraded with concerns about potential trade wars.  This growth rate compares to 2.3 percent in 2017 and 1.5 percent in 2016.

So far this year, inflation is being tamed by regular, planned rate hikes by the Federal Reserve, although the March Producer Price Index showed an annual growth rate of 3.0 percent, which suggests that businesses are facing higher costs before passing them into consumers.

While job growth did dip to 103,000 positions in March, the first quarter’s average of 202,000 is still up by nearly 14 percent from the same period of 2017.

The tax cut taking effect as of January 1st, besides giving an extra boost to corporate spending, has also led to an increase in the personal savings rate of consumers, rising one full percentage point directly before and after the law took effect. 

Not surprisingly, this extra kick in paychecks has sent  consumer sentiment soaring to highs not seen since just after the turn of the 21st century.

This has been, in essence, a Goldilocks economy: Running just hot enough to warrant gradual interest rate hikes to keep it from overheating while still providing consumers both the spending power and the confidence for optional purchases including homes, autos, travel and entertainment.

If there is a concern on the immediate horizon for the building industry, it’s the impact of tariffs on the economy in general, and homebuilding in particular.  Prior to the tariffs of three to 24 percent assessed on Canadian software lumber, new home prices were based more on factors such as location, quality and competition than construction costs alone.

Since then, however, prices have risen sharply, with the pricing premium for new versus existing homes rising to 35 percent, when 10 to 20 percent has been closer to the historical norm.

The cost increase has also had an impact on home prices, as more existing homeowners looking to upgrade stay put until more new home options become available.  More recently, ‘panic buying’ of foreign steel and aluminum to beat additional tariffs was mentioned by an Institute of Supply Management Report, driving up short-term prices and causing inventory shortages for spot buyers.

For their part, home builders are doing everything they can to ramp up production, with March building permits and housing starts up 7.5 and 10.9 percent, respectively, compared to a year ago.

Yet most of these gains were for multi-family homes, pointing to continuing challenges including not just the Canadian tariffs, but also finding suitable land and construction labor. 

In addition, with a recent report noting that average pay in construction is now nearly ten percent higher than for all private employees, these extra costs must either be absorbed by the builder or passed along in the form of higher prices.

Even with higher prices, however, one area in which builders have the upper hand over most existing homes is with green building.  

According to a study by the global consultancy Booz Allen Hamilton, green building was projected to grow at over 15 percent year-over-year from 2015 through 2018, not only outpacing overall construction spending, but also showing a significant impact on GDP, employment and earnings over the previous three-year study period.

More specifically, this growth would support an additional 3.9 million jobs and generate over $303 billion to GDP.

Green building is also a great investment in the future.  According to a report to the California Sustainable Building Task Force, upfront spending of two percent of overall construction costs can, over a structure’s lifetime, yield savings of more than ten times the initial outlay.

For new homes, estimates during the first quarter of 2018 would indicate year-over-year sales activity up by about 0.5 percent, with prices rising by 4.6 percent.

In the larger, existing home sales market, with February’s pending home sales activity falling by just over four percent year-over-year, NAR is adjusting their estimates for 2018 accordingly.  The group is now calling for annual sales to be flat versus 2017, and for home prices to rise by 4.2 percent following a 5.8-percent increase in 2017.

Still, the 4.2 percent growth rate would imply that Americans continue to view owning a home as an important investment, even if tax reform removed some of the benefits.  The homeownership dream lives on.

Wednesday, April 18, 2018

February business inventories up 0.6 percent from January and 4.0 percent year-on-year

February manufacturers' and trade inventories were up 0.6 percent from January 2018 and 4.0 percent year-on-year.  February sales were up 0.4 percent from January 2018 and 5.8 percent year-on-year.

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March industrial production up 0.5 percent from February and 4.3 percent year-on-year

Industrial production rose 0.5 percent in March and is up 4.3 percent year-on-year. Capacity utilization for the industrial sector moved up 0.3 percentage point in March to 78.0 percent, a rate that is 1.8 percentage points below its long-run (1972-2017) average.

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March housing starts rebound 1.9 percent from February and 10.9 percent year-on-year

Privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,319,000. This is 1.9 percent above the revised February estimate of 1,295,000 and is 10.9 percent above the March 2017 rate of 1,189,000.

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March building permits rebound 2.5 percent from February and 7.5 percent year-on-year

Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,354,000. This is 2.5 percent above the revised February rate of 1,321,000 and is 7.5 percent above the March 2017 rate of 1,260,000.

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Monday, April 16, 2018

February job openings fell 2.8 percent from January, hires and separations fell by a lesser amount

The number of job openings fell by 2.8 percent between the last days of January and February.  Over the month, hires and separations fell by 1.2 and 2.4 percent, respectively.

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Consumer sentiment slips in early April survey due to trade policy concerns

Consumer sentiment slipped in early April, largely reversing the gains recorded in the prior two months, mainly due to concerns about the potential impact of Trump's trade policies on the domestic economy. The small decline was widely shared by all age and income subgroups and across all regions of the country. The expectation of rising interest rates also slowed the anticipated pace of growth in the economy.

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March retail sales rebound 0.6 percent following three straight declines

U.S. retail sales rebounded in March by 0.6 percent after three straight monthly declines as households boosted purchases of motor vehicles and other big-ticket items.

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Builder confidence dips one point to 69 in April, still remains on firm ground

Builder confidence in the market for newly-built single-family homes edged down one point to a level of 69 in April.  The HMI index gauging buyer traffic held steady at 51, the chart measuring sales expectations in the next six months fell a single point to 77, and the component gauging current sales conditions dropped two points to 75.

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Friday, April 13, 2018

Initial unemployment claims decrease 9,000 in weekly report

In the week ending April 7, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 9,000 from the previous week's unrevised level of 242,000. The 4-week moving average was 230,000, an increase of 1,750 from the previous week's unrevised average of 228,250.

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Mortgage applications decline 1.9 percent in weekly report

The Market Composite Index decreased 1.9 percent on a seasonally adjusted basis from one week earlier, with both purchase and refinances down 2.0 percent. The average contract interest rate for 30-year fixed-rate mortgages with decreased to 4.66 percent from 4.69 percent.

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Bloomberg: Weekly Consumer Comfort Index rebounds to fresh 17-year high

Increased optimism about personal finances and the buying climate propelled the U.S. Consumer Comfort Index last week to a fresh 17-year high of 58.0 as a strong job market and more take-home pay boosted the outlook.

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Federal Reserve March meeting minutes show upward revisions to GDP estimates

Participants generally saw the news on spending and the labor market over the past few quarters as being consistent with continued above-trend growth and a further strengthening in labor. The FOMC unanimously voted to approve a quarter-point rate hike, bringing the target range to 1.5 percent to 1.75 percent. Along with the rate hike came upward revisions to the committee's expectations for GDP, which it now sees at 2.7 percent in 2018 and 2.4 percent in 2019.

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March new home purchase applications down 14 percent from February and 2.6 percent year-on-year

The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for March 2018 shows mortgage applications for new home purchases decreased 2.6 percent compared to March 2017. Compared to February 2018, applications increased by 14 percent. This change does not include any adjustment for typical seasonal patterns.

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Wednesday, April 11, 2018

Spring selling season is here! Tips for saving money and your sanity during a move.

Moving is stressful!

There’s no way around that fact. Adults, kids, and even pets feel the strain of packing up everything and hauling it to a new location.

For many people, just the thought of having to pack and then unpack their entire home is enough to trigger stress. Not to mention the added angst of paying for the move.

A move may be inevitable, but the anxiety doesn’t have to be. After conferring with the experts at Allied Van Lines it was clear there are a few things people can do to make a move less stressful.

Start Early

Life doesn’t stop because you’re moving. The #1 way to ease the stress of a move is to start early. The more time you give yourself the less rushed you’ll feel. You’ll have time to research everything and can take your time getting things packed up in an organized manner.

Planning a move well in advance also comes with another advantage - you’ll save money. When you have weeks or months before a move you can begin looking for deals on packing supplies and comparing service provider costs. There’s no pressure to simply use the first option you find.

Ideally, you should give yourself at least a month to move. Some to-dos, like updating your address, must be done a few weeks in advance. However, if you’re moving during the busy summer months give yourself even more time. Top-rated movers tend to get booked early so you’ll need to make a reservation a month or more before the move date.

Choose the Right Movers

If you’ve ever read moving company reviews, then you already know there’s a lot of variation in services and quality. Most moving companies can handle a standard, local move, but there’s no guarantee beyond that.

If you’re moving long-distance or have odd items to move it’s best to hire a moving company that specializes in those services.

Making a long move and packing up items like a pool table requires a certain level of expertise. Hiring movers who are ill-equipped for the job will only add to the stress and expense.

One thing you’ll want to verify is that the moving company is licensed, bonded and insured. This will give you peace of mind that you’re working with a legitimate company that can cover the costs if anything is damaged in transit.  

Create a Personal Moving Plan

Projects seem to move more smoothly when a plan is in place. It’s tempting to hit the ground running after deciding to make a move, but you’ll save time and money by creating a personal moving plan.

Start by determining your timeline. It should begin with the present day and end on the moving day. 

Next, determine what outside services will be needed and when you’ll need them. Then come up with a schedule for packing up the house. It’s usually best to start as early as possible with items that aren’t used often, like seasonal sporting equipment and clothes.

Finally, add in all the other related to-dos such as updating financial account info and cleaning the house.

Hopefully, your moving company is willing to help with the process. It’s a standard part of the service provided by Allied Van Lines, but that doesn’t mean every mover will be on board during the planning phase.

Clear Out What You Don’t Plan to Keep

There’s one clear way you can make the most of a move. It’s the perfect time to clear out the clutter that’s just taking up space.

We all have items around the house that haven’t seen the light of day since the last move. Why waste time and money packing up things you’ll never actually use?

Before you begin packing, go through each room, closet, etc. and separate items into four piles: keep, give away/sell, donate and trash. If you have trouble getting rid of things ask a friend or family member to help during the purging process.

Take Breaks Throughout the Moving Process

It’s easy to get burned out during a move, especially if you’re working full-time or have small children to look after. Adding hours of work a day to your already busy schedule will quickly lead to burnout. And if you really run yourself ragged you increase your risk of getting sick.

You can ward off the effects of stress and fatigue by taking breaks. If you have the time, give yourself a full day to step away from the moving agenda. Focus on relaxing “me time” and taking care of yourself. It’s the perfect time to treat yourself to a massage or hit the gym for endorphin-releasing exercise.

With a little luck and a lot of preparation, you’ll get through the move without too much stress.

HomeSphere March report: Nearly 40 percent of builders reporting negative impact from higher interest rates

Highlights from HomeSphere/BTIG building industry report – March 2018

  • 39% of builders reported some negative impact to sales related to higher interest rates
  • 69% of builders raised some or all base prices month/month (with zero of 81 reporting decreases)
  • 29% reported that sales were better than internal expectations


CoreLogic: January delinquency rates dipped to 4.9 percent, foreclosed mortgages down to 0.6 percent

CoreLogic:  In January, 4.9 percent of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure), down 0.2 percentage points year-on-year.   The foreclosure inventory rate - which measures the share of mortgages in some stage of the foreclosure process - was 0.6 percent, down 0.2 percentage points year-on-year.

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April business inflation expectations edge up to 2.3 percent, highest measure since October 2011

Firms' inflation expectations increased to 2.3 percent over the year ahead, the highest measure since the survey began in October 2011.

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CPI up 0.1 percent in March, 2.4 percent year-on-year

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1 percent in March and was up 2.4 percent year-on-year, and notably higher than the 1.6-percent average annual rate over the past 10 years. The index for all items less food and energy increased 0.2 percent in March and 2.1 percent year-on-year, for its largest 12-month increase since the period ending February 2017.

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Tuesday, April 10, 2018

March small business optimism dips slightly from record highs

The small business optimism index reached its 16th consecutive month in the top five percent of 45 years of survey readings. The 104.7 March reading, down from 107.6 in February, remains among the highest in survey history and for the first time since 1982, taxes received the fewest number of votes as the number one problem.



Producer Price Index up 0.3 percent in March, 3.0 percent year-on-year

The Producer Price Index for final demand advanced 0.3 percent in March, as prices for both final demand services and final demand goods rose 0.3 percent. The final demand index increased 3.0 percent for the 12 months ended in March.

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Monday, April 9, 2018

February trade deficit widens to highest level since October 2008

The goods and services deficit was $57.6 billion in February, up $0.9 billion from $56.7 billion in January. This is the highest U.S. trade deficit since October 2008.

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February consumer credit use grew by sluggish rate, especially for credit cards

Consumer borrowing increased at a sluggish pace in February, increasing $10.6 billion in February vs. $15.1 expected, and posting an annual growth rate of 3.3%.

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Friday, April 6, 2018

March job growth dips to 103,000, unemployment rate unchanged at 4.1 percent

Total nonfarm payroll employment edged up by 103,000 in March, and the unemployment rate was unchanged at 4.1 percent.   This was the lowest rate of job growth since September 2017. Employment increased in manufacturing, health care, and mining.


The labor force participation rate, at 62.9 percent, changed little in March, and the employment-population ratio held at 60.4 percent.


Thursday, April 5, 2018

Initial unemployment claims rise 24,000 in weekly report

In the week ending March 31, initial unemployment claims were 242,000, an increase of 24,000 from the previous week's revised level. The 4-week moving average was 228,250, an increase of 3,000 from the previous week's revised average.

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Mortgage applications dip 3.3 percent, rates remain unchanged

The Market Composite Index decreased 3.3 percent on a seasonally adjusted basis from one week earlier, with purchase loans down by 2.0 percent and refinance activity falling 5.0 percent. The average contract interest rate for 30-year fixed-rate mortgages remained unchanged at 4.69 percent.

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Bloomberg: Consumer Comfort Index rebounds to 17-year high of 57.2

U.S. consumer comfort advanced last week to a fresh 17-year high of 57.2 as greater optimism about household finances and the buying climate more than offset a deterioration in views about the economy.

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March planned job cuts up 71 percent from February and 39 percent year-on-year

Job cuts announced by U.S.-based employers surged in March to 60,357, a 71 percent increase from February and 39 percent higher year-on-year. Last month's total is the highest monthly total since April 2016.

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Wednesday, April 4, 2018

March online advertised vacancies up 2.2 percent from February and 3.7 percent year-on-year

Online advertised vacancies were 4,819,700 in March, up 2.2 percent from February and 3.7 percent year-on-year. The February Supply/Demand rate stands at 1.42 unemployed for each advertised vacancy, with a total of 2.0 million more unemployed workers than the number of advertised vacancies.

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Service sector index dipped 0.7 points in March to 58.8, business conditions remain positive

The NMI® registered 58.8 percent, which is 0.7 percentage point lower than the February reading of 59.5 percent. The cooling off of the New Orders Index possibly prevented an even stronger reading for the overall index. The majority of respondents remain positive about business conditions.

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Factory goods orders rebounded 1.2 percent, nearly erasing January's decline

New orders for U.S.-made goods rebounded 1.2 percent in February, boosted by strong demand for transportation equipment and a range of other products.  This increase nearly matches January's revised decline of 1.3 percent.

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ADP: Private sector employment up 241,000 in March vs. 122,000 year-on-year

Private-sector employment increased by 241,000 from February to March, on a seasonally adjusted basis. This compares to 246,000 in February and 122,000 during the same month of 2017.

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Tuesday, April 3, 2018

March multi-family rents up 2.5 percent year-on-year while occupancy rates dip to 95.2 percent

The average multifamily rent in the U.S. rose $4 to $1,371 in March, a 2.5 percent year-over-year increase, according to a survey of 121 markets by Yardi Matrix. This uptick was the first increase since summer 2017, as rents had not moved more than $1 in either direction since July.


The next few months will be telling, however, as rent growth in the first quarter was weak compared to the first quarter of recent years.

National average occupancy rates remained mostly stable at about 95.2 percent.


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CoreLogic: February homes prices up 1.0 percent from January and 6.7 percent year-on-year

CoreLogic:  February home prices increased nationally year over year by 6.7 and on a month-over-month basis, home prices increased by 1 percent in February 2018.


Looking ahead, the CoreLogic HPI Forecast indicates that the national home-price index is projected to continue to increase by 4.7 percent on a year-over-year basis from February 2018 to February 2019, with California leading the climb at a forecasted 10.3 percent year-over-year change.


Thursday, March 29, 2018

Initial unemployment claims fall to 215,000, lowest level since January 1973

In the week ending March 24, initial unemployment claims were 215,000, a decrease of 12,000 from the previous week's revised level. This is the lowest level for initial claims since January 27, 1973. The 4-week moving average was 224,500, a decrease of 500 from the previous week.

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Mortgage applications rise 4.8 percent, rates rise slightly to 4.69 percent

The Market Composite Index increased 4.8 percent on a seasonally adjusted basis from one week earlier, with purchase loans up 3.0 percent and refinance activity rising 7.0 percent. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.69 percent.

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Bloomberg: Consumer comfort holding near 17-year high despite stock market volatility

U.S. consumer sentiment held near a 17-year high at 56.8 last week as households grew more upbeat about their finances despite a sell-off in equities tied to concerns about a trade war.

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February PCE price index up 0.2 percent from January and 1.8 percent year-on-year

The PCE price index, used as a favored marker of inflation by the Federal Reserve, rose 0.2 percent from January and 1.8 percent year-on-year. Excluding food and energy, the PCE price index increased 0.2 percent from January and 1.6 percent year-on-year.

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February personal income up 0.4 percent while spending rose by 0.2 percent, increasing savings rate

In February, both personal income and disposable personal income increased 0.4, personal consumption expenditures 0.2 percent rose, leading to the personal savings rate rising from 3.2 to 3.4 percent.

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March consumer sentiment rises to highest level since 2004

Consumer sentiment at month's end was marginally below the mid-month reading due to uncertainty about the impact of the proposed trade tariffs. The Sentiment Index, however, still reached the highest level since 2004, and the Current Conditions Index set a new all-time peak.

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Wednesday, March 28, 2018

4Q GDP growth rises to 2.9 percent in third and final estimate

In the third and final estimate, real gross domestic product (GDP) increased at an annual rate of 2.9 percent in the fourth quarter of 2017, up from 2.5 percent in the second estimate. In the third quarter, real GDP increased 3.2 percent.

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February Pending Home Sales Index rebounds 3.1 percent, but still down 4.1 percent year-on-year

The Pending Home Sales Index grew 3.1 percent to 107.5 in February from a downwardly revised 104.3 in January. Even with last month's increase in activity, however, the index is 4.1 percent below a year ago due largely to lack of inventory and affordability issues, especially for first-time buyers.

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Tuesday, March 27, 2018

State Street: Investor Confidence index up 4.8 points in March

The Global Investor Confidence Index increased to 111.9, up 4.8 points from February’s revised reading of 107.1. The index differs from survey-based measures in that it is based on the actual trades, as opposed to opinions, of institutional investors.


After a volatile February, institutions seemed to have re-embraced risk in March, with the ICI rising across all regions. However, increasing rhetoric over protectionist policies and fears over a potential trade war are still festering and have the potential to impact confidence.


Consumer confidence retreats moderately in March due to business conditions

Consumer confidence declined moderately in March after reaching an 18-year high in February. Consumers’ assessment of current conditions declined slightly, with business conditions the primary reason for the moderation. Consumers’ short-term expectations also declined, including their outlook for the stock market, but overall expectations remain quite favorable.



Case-Shiller National Index up 0.5 percent in January and 6.2 percent year-on-year

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 6.2% annual gain in January, down from 6.3% in the previous month. After seasonal adjustment, the National Index recorded a 0.5% month-over-month increase in January.



Monday, March 26, 2018

February durable goods orders jumped 3.1 percent, largest gain in eight months

Durable-goods orders jumped 3.1 percent in February, largely reversing a big drop at the start of the year and posting the largest gain in eight month. Even after stripping out planes and cars, orders climbed climbed a solid 1.2 percent.

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February Chicago Fed National Activity Index rose sharply from January

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.88 in February from +0.02 in January. The index's three-month moving average, CFNAI-MA3, increased to +0.37 in February from +0.16 in January.

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Friday, March 23, 2018

February new home sales dip for third month

Sales of new single-family houses in February 2018 were at a seasonally adjusted annual rate of 618,000 in a preliminary estimate. This is 0.6 percent below the revised January rate of 622,000, but is still 0.5 percent above the February 2017 estimate of 615,000.

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Thursday, March 22, 2018

Initial unemployment claims up 3,000 in weekly report

In the week ending March 17, initial unemployment claims were 229,000, an increase of 3,000 from the previous week's unrevised level of 226,000. The 4-week moving average was 223,750, an increase of 2,250 from the previous week's unrevised average of 221,500.

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Mortgage applications dip 1.1 percent in latest survey, but purchase loans alone up 1.0 percent

The Market Composite Index decreased 1.1 percent on a seasonally adjusted basis from one week earlier, with purchase loans up 1.0 percent and refinances falling by 5.0 percent. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.68 percent.

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Bloomberg: March Consumer Comfort Index climbs for third month to highest level since 2002

Americans' outlook for the economy climbed in March for a third straight month to 56.0, or matching the highest level since 2002.  The weekly index rose from 56.2 to 56.8.

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January FHFA House Price Index up 0.8 percent from December and 7.3 percent year-on-year

The FHFA House Price Index (HPI) reported a 0.8 percent increase in U.S. house prices in January from the previous month.  From January 2017 to January 2018, house prices were up 7.3 percent. 

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Federal Reserve opts to hike interest rates another quarter point

In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1-1/2 to 1-3/4 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

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February Leading Economic Index rose for fifth straight month

The U.S. LEI rose again, despite a sharp downturn in stock markets and weakness in housing construction in February. The LEI points to robust economic growth throughout 2018. Its six-month growth rate has not been this high since the first quarter of 2011.

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Wednesday, March 21, 2018

February existing home sales rebound 3.0 percent from January, up 1.1 percent year-on-year

Despite consistently low inventory levels and faster price growth, existing-home sales bounced back in February after two straight months of declines, rising 3.0 percent from January.  Sales were also up 1.1 percent year-on-year.

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Friday, March 16, 2018

JOLTS: January job openings spike up 11.4 percent while hires rose by just 1.1 percent

The number of job openings rose 11.4 percent to 6.3 million on the last business day of January. Over the month, however, hires rose by just 1.1 percent to 5.6 million, while separations rose by 1.8 percent to 5.4 million.



February industrial production rebounded 1.1 percent from January

Industrial production rose 1.1 percent in February following a decline of 0.3 percent in January. Manufacturing production increased 1.2 percent in February, its largest gain since October. Capacity utilization for the industrial sector climbed 0.7 percentage point in February to 78.1 percent, its highest reading since January 2015 but still 1.7 percentage points below its long-run (1972–2017) average.

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Consumer sentiment rises to highest level since 2004 in early read, but upper-income households more wary

Consumer sentiment rose in early March to its highest level since 2004 due to a new all-time record favorable assessment of current economic conditions. All of the gain in the Sentiment Index was among households with incomes in the bottom third (+15.7), while the economic assessments of those with incomes in the top third posted a significant monthly decline (-7.3).

The decline among upper income consumers was focused on the outlook for the economy and their personal finances. In early March, favorable mentions of the tax reform legislation were offset by unfavorable references to the tariffs on steel and aluminum-each was spontaneously cited by one-in-five consumers. Importantly, near term inflation expectations jumped to their highest level in several years, and interest rates were expected to increase by the largest proportion since 2004.

Among the top-third income households, income expectations fell more and inflation expectations rose more; as these households account for more than half of all consumption expenditures, the data suggest that the relative lull in consumption in the 1st quarter may persist for another quarter.

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February housing starts down 7.0 percent from January and 4.0 percent year-on-year

Privately-owned housing starts in February were at a seasonally adjusted annual rate of 1,236,000. This is 7.0 percent below the revised January estimate of 1,329,000 and is 4.0 percent below the February 2017 rate of 1,288,000.



February building permits tumbled 5.7 percent from January but still up 6.5 percent year-on-year

Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,298,000. This is 5.7 percent below the revised January rate of 1,377,000, but is 6.5 percent above the February 2017 rate of 1,219,000.



Thursday, March 15, 2018

4Q 2017 home loans down 20 percent from 3Q and 19 percent year-on-year

According to ATTOM Data Solutions, the number of residential property loans made in 4Q 2017 was down 20 percent from the previous quarter as well as down 19 percent from a year ago.  However, construction loans were up 12 percent from the third quarter and up 33 percent year-on-year, indicating more robust remodeling activity as well as rebuilding efforts after last year’s hurricanes.



Gallup: More Americans see AI as a greater threat than immigration and offshoring

More than half of Americans (58%) say technology poses a greater threat to jobs in the U.S. over the next decade, while 42% see immigration and offshoring as the greater threat. Republicans, who see immigration and offshoring as roughly an equal threat as technology, are the only subgroup of Americans not to see technology as a greater threat.



Philadelphia Fed's Business Outlook Survey dips to 22.3 in March but still in positive territory

Findings from the Philadelphia Federal Rerserve Manufacturing Business Outlook Survey suggest continued growth for the region's manufacturing sector. Although the survey's index for general activity moderated, the indexes for new orders and shipments improved. The survey's future indexes, measuring expectations for the next six months, reflected continued optimism.

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March Empire State Manufacturing Survey rises nine points to 22.5

Business activity grew robustly in New York State, according to firms responding to the March 2018 Empire State Manufacturing Survey. The headline general business conditions index climbed nine points to 22.5.

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Initial unemployment claims fall by 4,000 in weekly report

In the week ending March 10, initial unemployment claims were 226,000, a decrease of 4,000 from the previous week's revised level. The 4-week moving average was 221,500, a decrease of 750 from the previous week's revised average.

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Mortgage applications rise 0.9 percent in weekly report, average rates rise to 4.69 percent

The Market Composite Index increased 0.9 percent on a seasonally adjusted basis from one week earlier, with purchase loans up 3 percent and refinance activity falling 2 percent. The average contract interest rate for 30-year fixed-rate mortgages increased to its highest level since January 2014, 4.69 percent.

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Bloomberg: Consumer Comfort Index slips to 56.2 but still near highest level since 2001

U.S. consumer sentiment eased slightly last week to 56.2 while hovering near its highest level since 2001, as job gains drive Americans' confidence in their financial situation.

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February new home mortgage applications up 3.0 percent from January and 4.6 percent year-on-year

The Mortgage Bankers Association (MBA) Builder Applications Survey (BAS) data for February 2018 shows mortgage applications for new home purchases increased 4.6 percent compared to February 2017. Compared to January 2018, applications increased by 3 percent. This change does not include any adjustment for typical seasonal patterns.

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March builder confidence edges down one point to 70

Builder confidence in the market for newly-built single-family homes edged down one point to a level of 70 in March. The HMI component gauging current sales conditions held steady at 77, the chart measuring sales expectations in the next six months dropped two points to 78, and the index gauging buyer traffic fell three points to 51.

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Data, Data Every Where/Nor any Drop to Drink: Making Sense of the Economic Data Deluge

In his lengthy 1798 poem “The Rime of the Ancient Mariner,” Samuel Taylor Coleridge tells the story of a group of sailors stranded at sea, surrounded by salt water they cannot drink and writing, “Water, water everywhere, nor any drop to drink.”

This famous line also seemed like an apt metaphor for the deluge of economic data which is now routinely released on a regular basis by a variety of government and private sources. In other words, how can you trust what you ingest?

It’s a fair question.  Over the last decade, as the number of traditional newsroom jobs has been cut by nearly half, Americans increasingly get their news from social media, television, Web sites and talk radio.  Since most of these sources are now oriented towards maximizing clicks, eyeballs and ears, even traditional economic updates are sometimes subject to spin versus true objectivity. Another issue is the sheer volume of economic data sliced and diced for different stakeholders, demographics and geographies.

For a simple way to ensure you don’t miss out on important economic news, the current edition of the free BuilderBytes e-newsletter by Peninsula Publishing regularly tracks 60 or more economic indicators each month. These are almost all national in scope, provide a link to the original source, and are generally relevant in some way to the housing industry.  The newsletter also features scores of other stories with links on finance, green building, design, affordable housing and more.

If you require a more detailed analysis, there’s certainly no shortage of relatively affordable, ‘data buffet’ services offering a smorgasbord of economic data at the national level.  But, much like a food smorgasbord, you still need to invest the time to locate, sample and collect the data that you want.  These data buffets also generally lack data at smaller geographic levels including MSAs, counties and cities.

Once you’re focused on the MSA, county or city level, the data search becomes more difficult or even proprietary in nature, which is why subscriptions can be pricey and custom reports produced by consultants or economists can easily run into thousands of dollars.  But in today’s connected world, the alternatives to these options have never been more numerous.

For example, if you want to review housing trends for a market you’re thinking of entering, Web sites for Zillow, Trulia, Redfin and various Associations of Realtors® offer everything from sales and inventory to market health and new home absorption rates.  If you want to review the local job market, government sources can usually tell you everything from job growth and unemployment applications to labor participation rates and median wages by industry.

If you’re looking for an overview of regional economic conditions, many of the 12 Federal Reserve Banks release their own monthly summaries and surveys covering their assigned areas, often including individual states and MSAs.  Some of these surveys, such as those done by the banks in New York and Philadelphia, are economic bellwethers closely monitored by Wall Street.

If you want to target hot new submarkets for future growth, government sources can tell you where population growth is outpacing building permits or where retail sales are suddenly surging.  For commercial real estate markets, many large brokerages maintain their own research departments, tracking everything at the submarket level from monthly rents to vacancy rates.

In other words, while you may have to pay an expert sleuth for finding, curating and analyzing data, you don’t necessarily have to pay for the data itself.

Still, many private sources do act as a check on official government indicators. For example, payroll processor ADP releases its own estimate of private sector job growth in advance of official government statistics, and both Gallup and The Conference Board regularly track monthly employment trends, employee engagement and the number of job vacancies advertised online.

For the housing market, the NAHB, NAR and MBA maintain regular updates on not just mortgage applications, home sales and prices, but also builder, seller and buyer sentiment. 

We are very lucky in the United States to have governments at the national and state levels which are very serious about collecting sophisticated data at various geographic levels.  This is certainly not the case in most of the world.

But much of this data, especially collected by the Census Bureau and elsewhere at the Department of Commerce, is under threat due to budget cuts, so it’s important for stakeholders to let their representatives know how crucial this data is for the business of building homes.

Because if ingestible information is power, then so is success.

Tuesday, March 13, 2018

CoreLogic: December mortgage delinquencies at 5.3 percent, unchanged year-on-year

Nationally, 5.3 percent of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in December 2017. This represents no change in the overall delinquency rate compared with December 2016 when it was also 5.3 percent.


As of December 2017, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.6 percent, down 0.2 percentage points from 0.8 percent in December 2016. Since August 2017, the foreclosure inventory rate has been steady at 0.6 percent, the lowest level since June 2007, when it was also 0.6 percent.

This past December’s foreclosure inventory rate was the lowest for the month of December in 11 years; it was also 0.6 percent in December 2006.


February small business optimism survey rose to near-record high of 107.6

Small business owners are showing unprecedented confidence in the economy as the optimism index continues at near-record high numbers, rising to 107.6 in February, according to the NFIB Small Business Economic Trends Survey. The historically high numbers include a jump in small business owners increasing capital outlays and raising compensation.

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February Consumer Price Index up 0.2 percent from January and 2.2 percent year-on-year

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in February after rising 0.5 percent in January. Over the last 12 months, the all items index rose 2.2 percent.

The index for all items less food and energy increased 0.2 percent in February following a 0.3-percent increase in January and rose 1.8 percent year-on-year.


Monday, March 12, 2018

Federal budget deficit spiked to $215 billion in February, largest in six years

The U.S. government had a $215 billion budget shortfall in February as revenues into the government’s coffers fell and outlays increased.  That compared with a budget deficit of $192 billion in the same month last year and a budget surplus of $49 billion the previous month.


The deficit for the fiscal year, which began in October, was $391 billion, compared to a deficit of $351 billion in the same period of fiscal 2017.

A combination of tax cuts passed by the Trump administration late last year and an increase in government spending agreed in early February are set to add to the nation’s budget gap with $1 trillion annual deficits on the horizon.

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Friday, March 9, 2018

Gallup: 70 percent of U.S. adults have positive views on foreign trade, up from 58 percent prior to 2017

Americans' increasingly positive views of foreign trade have stabilized after spiking last year. A strong majority of U.S. adults (70%) see foreign trade as an opportunity for U.S. economic growth through increased exports rather than a threat to the economy from foreign imports (25%). Before last year, no more than 58% had held the positive view of trade.

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Wholesale sales fell 1.1 percent in post-holiday January as inventories rose 0.8 percent

January 2018 sales of merchant wholesalers were down 1.1 from the revised December level, but up 6.7 percent year-on-year.


Total inventories of merchant wholesalers were up 0.8 percent from December and 4.8 percent year-on-year.

The January inventories/sales ratio for merchant wholesalers, down from 1.28 a year ago.


CoreLogic: Most U.S. housing markets have returned to peak levels not seen since before Great Recession

The team at CoreLogic recently came out with a report covering the housing market from the Great Recession:

"Residential home prices began to peak in some parts of the country as early as 2005. Home prices collapsed in 2007, when Wall Street began to back out of residential mortgage-backed securities. 


After falling 33 percent during the recession, prices in most markets have returned to peak levels, growing 51 percent nationally since bottoming out in March 2011.

The average home price is now 1 percent higher than it was at the peak in 2006, and the average year-over-year home equity gain was $14,888 in the third quarter of 2017. This indicates the housing market has widely recovered."

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February job growth soared to 313,000, highest rate since July 2016

Total nonfarm payroll employment increased by 313,000 in February (versus 200,000 expected), and the unemployment rate was unchanged at 4.1 percent. Employment rose in construction, retail trade, professional and business services, manufacturing, financial activities, and mining.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.4 million in February and accounted for 20.7 percent of the unemployed. Over the year, the number of long-term unemployed was down by 369,000.

The civilian labor force rose by 806,000 in February. The labor force participation rate increased by 0.3 percentage point over the month to 63.0 percent but changed little over the year.

In February, total employment, as measured by the household survey, rose by 785,000. The employment-population ratio increased by 0.3 percentage point to 60.4 percent in February, following 4 months of little change.

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Thursday, March 8, 2018

Initial unemployment claims rise 21,000 in weekly report

In the week ending March 3, initial unemployment claims were 231,000, an increase of 21,000 from the previous week's unrevised level of 210,000. The 4-week moving average was 222,500, an increase of 2,000 from the previous week's unrevised average of 220,500.

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Bloomberg: Weekly consumer comfort index rebounds to second-highest level since 2001

The consumer comfort index rose last week to 56.8, the second-highest level since 2001, as the benefits of increased take-home pay from tax cuts outweighed concerns about stock-market volatility.

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4Q 2017 service sector economy up 2.2 percent from 3Q and 5.0 percent year-on-year

U.S. selected services total revenue for the fourth quarter of 2017 rose 2.2 percent from the third quarter of 2017 and 5.0 percent year-on-year.

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2018 YTD job cuts at lowest level since 1995

The nation's employers announced plans to cut 35,369 jobs in February, down 20 percent from the 44,653 cuts announced the previous month and 4.3 percent lower year-on-year. So far this year, employers have announced 80,022 cuts, 3.5 percent lower than through February last year. This is the lowest number of announced job cuts between January and February since 1995.

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Wednesday, March 7, 2018

January consumer credit use grew at slowest pace in four months

January consumer credit use grew at the slowest rate in four months.  The combination of this, along with sluggish household spending figures reported for January, indicates consumers may have been reluctant to increase credit-card balances following much stronger outlays in the fourth quarter. Gains in overall consumer credit cooled for a second month.

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MBA: 4Q 2017 delinquency rates for commercial property remain low

Based on the unpaid principal balance (UPB) of commercial loans, delinquency rates for each group at the end of the fourth quarter were as follows:

  • Banks and thrifts (90 or more days delinquent or in non-accrual): 0.51 percent, a decrease of 0.02 percentage points from the third quarter of 2017;
  • Life company portfolios (60 or more days delinquent): 0.03 percent, an increase of 0.01 percentage points from the third quarter of 2017;
  • Fannie Mae (60 or more days delinquent): 0.11 percent, an increase of 0.08 percentage points from the third quarter of 2017;
  • Freddie Mac (60 or more days delinquent): 0.02 percent, unchanged from the third quarter of 2017; and
  • CMBS (30 or more days delinquent or in REO): 4.08 percent, a decrease of 0.52 percentage points from the third quarter of 2017.



Mortgage applications rise 0.3 percent due to refinances, rates edge up to 4.65 percent

The Market Composite Index increased 0.3 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 1.0 percent and refinances rising 2.0 percent. The average contract interest rate for 30-year fixed-rate mortgages increased to its highest level since January 2014, 4.65 percent.

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Beige Book: Economic expansion continuing so far in 2018, but new home production constrained by supply issues

Economic activity expanded at a modest to moderate pace across the 12 Federal Reserve Districts in January and February. On balance, Districts reported modest growth in home sales and construction, with the latter constrained by shortages of labor and materials.

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January factory goods orders fell 1.4 percent after five months of increases

January factory goods orders fell 1.4 percent amid a broad decrease in demand.  That was the largest drop since July 2017 and followed five straight monthly increases.

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Labor productivity revised to 0.0 percent in 4Q 2017, up 1.1 percent year-on-year

Nonfarm business sector labor productivity growth was revised to 0.0 percent in the fourth quarter of 2017, as output increased 3.2 percent and hours worked increased 3.3 percent. From the fourth quarter of 2016 to the fourth quarter of 2017, productivity increased 1.1 percent, reflecting a 3.2-percent increase in output and a 2.1-percent increase in hours worked. Annual average productivity increased 1.2 percent from 2016 to 2017.

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Online Helped Wanted Ads declined 3.8 percent in February

Online advertised vacancies decreased 185,700, or 3.8 percent, to 4,717,600 in February, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series released today. The January Supply/Demand rate stands at 1.36 unemployed for each advertised vacancy, with a total of 1.8 million more unemployed workers than the number of advertised vacancies.

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ADP: Private sector jobs rose by 235,000 in February

According to ADP, private sector employment increased by 235,000 jobs from January to February. This compares to 244,000 the previous month and 280,000 in February 2017.

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Tuesday, March 6, 2018

CoreLogic: January home prices up 0.5 percent from December and 6.6 percent year-on-year

According to the CoreLogic HPI,  January home prices nationally increased 0.5 percent from December and 6.6 percent year-on-year. Looking ahead, the CoreLogic HPI Forecast indicates that the national home-price index is projected to increase by 4.8 percent on a year-over-year basis from January 2018 to January 2019, with a 12-month increase of more than 7 percent projected for California, Florida, Nevada and Oregon.

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Monday, March 5, 2018

Gallup: Americans not quite ready yet for self-driving cars and trucks

According to Gallup, by some estimates, 10 million self-driving vehicles will be on the road worldwide by 2020.


However, Americans are currently skeptical of using the technology.
  • More than half of the U.S. public (54%) says it is not likely to use the vehicles.
  • 59% would be uncomfortable riding in self-driving cars
  • 62% would be uncomfortable sharing the road with self-driving trucks
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Gallup: Public split on Universal Basic Income (UBI) to address future automation

According to a recent Gallup poll, Americans are split in their support for a hypothetical universal basic income (UBI) program that would guarantee a minimum income for workers who lose their jobs because of advances in artificial intelligence (AI).


Forty-eight percent support and 52% oppose a UBI program for workers who are displaced by technology.


February service sector index dipped 0.4 points to 59.9, but still represents strong growth

The February NMI® registered 59.5 percent, which is 0.4 percentage point lower than the January reading of 59.9 percent but still reflected the second consecutive month of strong growth. The majority of respondents' continue to be positive about business conditions and the economy.

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February manufacturing index rose 1.7 points to 60.8 as expansion continues

The February PMI® registered 60.8 percent, an increase of 1.7 percentage points from the January reading of 59.1 percent. Comments from the panel reflect expanding business conditions, with new orders and production maintaining high levels of expansion.

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Friday, March 2, 2018

February consumer sentiment remains at second-highest level since 2004

Consumer sentiment remained quite favorable in February, at its second highest level since 2004.

Consumers based their optimism on favorable assessments of jobs, wages, and higher after-tax pay.

Economic news heard by consumers continued to be dominated by the tax reform legislation and net job gains, which was untarnished by the consensus view that interest rates would increase and stock prices would remain volatile.

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Thursday, March 1, 2018

IHS PMI shows start of 2018 strongest for manufacturing since late 2014


The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index™
(PMI™) registered 55.3 in February, down slightly from 55.5 in January. Although below January’s 34-month high, the overall improvement in operating conditions across the manufacturing sector was one of the strongest recorded since late-2014.


Initial unemployment claims dip to lowest levels since December 1969

In the week ending February 24, initial unemployment claims were 210,000, a decrease of 10,000 from the previous week's revised level. This is the lowest level for initial claims since December 6, 1969 when it was 202,000. The 4-week moving average was 220,500, a decrease of 5,000 from the previous week's revised average. This is the lowest level for this average since December 27, 1969 when it was 219,750.

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Mortgage applications rise 2.7 percent as rates remain flat at 4.64 percent

The Market Composite Index increased 2.7 percent on a seasonally adjusted basis from one week earlier, with purchase loans up 6.0 percent but refinances falling 1.0 percent. The average contract interest rate for 30-year fixed-rate mortgages remained unchanged from last week at 4.64 percent.

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Bloomberg: Weekly Consumer Comfort Index rebounds close to a 17-year high

The Consumer Comfort Index remained close to a 17-year high, rising from 56.2 to 56.6, on rosier views of personal finances and the buying climate, as workers enjoy more take-home pay after the recent tax-cut legislation.

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Inflation update: January PCE price index up 1.7 percent year-on-year

The PCE price index, favored by the Fed as a read on inflation, increased 0.4 percent in January and 1.7 year-on-year, still below its target of 2.0 percent. Excluding food and energy, the PCE price index increased 0.3 percent in January and 1.5 year-on-year.

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Tax cuts and bonuses helped boost both January personal income and personal savings rate

Tax cut update: In January, personal income rose 0.4 percent, disposable personal income (DPI) rose 0.9 percent (the biggest jump since 2015) and personal consumption expenditures (PCE) increased 0.2 percent, leading to an increase in the personal savings rate from 2.5 to 3.2 percent of income.

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January construction spending flat from December but up 3.2 percent year-on-year

Construction spending was unexpectedly flat in January as a surge in investment in public construction projects was offset by a decline in private outlays. However, spending was up 3.2 percent year-on-year.

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Wednesday, February 28, 2018

Redfin: New homes accounted for 16.4 percent of all single-family homes for sale in 4Q 2017

New construction homes in the fourth quarter of 2017 accounted for 16.4 percent of all single-family homes for sale, the highest level since Redfin began tracking this data in 2012, up from from 14.2 a year earlier. This is a needed sign of progress in a housing market plagued by short supply.


The median price of new single-family homes that sold last quarter was $377,800, up 1.6 percent year over year. Compared with existing homes, new construction sold at an average premium of $86,400 in the fourth quarter.  At the same time, existing home prices increased 7.3 percent year over year.


4Q 2017 GDP growth dips to 2.5 percent in second of three estimates

According to the "second" estimate by the Bureau of Economic Analysis, real gross domestic product (GDP) increased at an annual rate of 2.5 percent in the fourth quarter of 2017, down slightly from the initial estimate of 2.6 percent. In the third quarter, real GDP increased 3.2 percent.

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January pending home sales fell to lowest level since October 2014

The Pending Home Sales Index fell 4.7 percent to 104.6 in January from a downwardly revised 109.8 in December 2017. After last month's retreat, the index is now 3.8 percent below a year ago and at its lowest level since October 2014 (104.1).The decline was attributed to low supply levels and rising interest rates.

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Tuesday, February 27, 2018

Non-Employment Index edges down to 7.9 percent in February

The Hornstein-Kudlyak-Lange Non-Employment Index (NEI) was 7.9 percent in January 2018, edging down from December 2017. It has declined by 0.4 percentage points since January 2017. The NEI including workers who are part time for economic reasons (PTER) was 8.9 percent in January 2018, unchanged compared to the previous month. That index has declined by 0.6 percentage points since January 2017.

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Durable goods orders fell 3.7 percent in January, mostly due to volatile aircraft sector

Durable-goods order fell by a sharp 3.7% in January — the largest decline since last summer — mostly due to a sharp drop in contracts for passenger planes. Without including planes and cars, orders fell a much smaller 0.3%. However, a key measure of business investment fell for a second straight month, which has not happened since early 2016.

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FHFA HPI: Home prices up 1.6 percent in 4Q 2017 and 6.7 percent year-on-year

FHFA House Price Index U.S. house prices rose 0.3 percent in December, 1.6 percent in the fourth quarter of 2017, and 6.7 percent between the fourth quarters of 2016 and 2017.

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Case-Shiller: December home prices up 0.7 percent from November and 6.3 percent year-on-year

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 6.3% annual gain in December, up from 6.1% in the previous month. After seasonal adjustment, the National Index recorded a 0.7% month-over-month increase in December.

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February consumer confidence rises to highest level since late 2000

Consumer confidence improved to its highest level since November 2000 after a modest increase in January. Consumers’ assessment of current conditions was more favorable this month, with the labor force the main driver. Despite the recent stock market volatility, consumers expressed greater optimism about short-term prospects for business and labor market conditions, as well as their financial prospects. Overall, consumers remain quite confident that the economy will continue expanding at a strong pace in the months ahead.

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Southern California home prices in January rose at their fastest pace in 44 months

From the L.A. Times:

Home prices in Southern California jumped 11.4% in January — the largest year-over-year gain in 44 months as the region's already sizzling housing market got even hotter.


The double-digit rise in the median price put it at $507,000, which was lower than December's peak of $509,500 when the six-county region surpassed bubble-era highs of $505,000 in 2007, according to a report out Tuesday by research firm CoreLogic.

Affordability drives everything in the Inland Empire," said analyst Patrick Duffy, principal of MetroIntelligence Real Estate Advisors...And while mortgage rates remain historically low at about 4.5% for a 30-year fixed loan, they are ticking up and the increases may be impelling some buyers to sign on the dotted line, Duffy said..."I'll bet some people on the fence are saying 'I am going to pull that trigger,'" he said. "Here's your chance to jump before prices go higher."

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Monday, February 26, 2018

January Chicago Fed National Activity Index slips two points to +0.12

The Chicago Fed National Activity Index (CFNAI) ticked down to +0.12 in January from +0.14 in December. The index's three-month moving average, CFNAI-MA3, decreased to +0.17 in January from +0.43 in December.

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January new home sales down 7.8 percent from December and 1.0 percent year-on-year

Sales of new single-family houses in January 2018 were at a seasonally adjusted annual rate of 593,000. This is down 7.8 percent from December and 1.0 percent year-on-year.  It is also the lowest rate since last August, with the decline potentially due to a combination of steeper prices, higher interest rates and less generous write-offs from tax reform enacted at the beginning of 2018.  New home inventory rose to a four-year high.

However, a caveat is important here:  Due to the relatively large margin of error given by the Census Bureau for these numbers (19.0 percent from December and 16.4 percent year-on-year), it's also important to review other sources for updates on the housing market.  The Bureau will also often update its estimates as more (and better) information comes in.

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Thursday, February 22, 2018

Federal Reserve meeting minutes indicate more rate hikes ahead in 2018

A majority of participants noted that a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate. Almost all participants saw inflation moving up to the Fed's 2 percent inflation goal over the medium term as growth remained above trend and the labor market stayed strong.

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Initial unemployment claims fall 7,000 in latest report

In the week ending February 17, initial unemployment claims were 222,000, a decrease of 7,000 from the previous week's revised level. The 4-week moving average was 226,000, a decrease of 2,250 from the previous week's revised average.

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Mortgage applications decline 6.6 percent as rates continue to rise

The Market Composite Index decreased 6.6 percent on a seasonally adjusted basis from one week earlier, with purchase loans down 6.0 percent and refinances falling 7.0 percent. The average contract interest rate for 30-year fixed-rate mortgages increased to its highest level since January 2014, 4.64 percent.

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February Bloomberg Consumer Comfort Index rises to second-highest level since March 2002

Americans' outlook for the U.S. economy improved in February to 54.5, the second-highest level since March 2002, indicating lower taxes are resonating.  The weekly comfort index was little changed at 56.6, falling from 57.0 the previous week.

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January Leading Economic Index rose for fourth straight month to 108.1

The U.S. LEI accelerated further in January and continues to point to robust economic growth in the first half of 2018. While the recent stock market volatility will not be reflected in the U.S. LEI until next month, consumers' and business' outlook on the economy had been improving for several months and should not be greatly impacted.

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Wednesday, February 21, 2018

January existing home sales down 3.2 percent from December and 4.8 percent year-on-year

Due largely to a shortage of affordable inventory, total existing-home sales sank 3.2 percent in January to a seasonally adjusted annual rate of 5.38 million from December 2017. After last month's decline, sales are 4.8 percent below a year ago (largest annual decline since August 2014 at 5.5 percent) and at their slowest pace since last September.

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IHS: February U.S. PMI Output Index rises to 55.9, highest reading in almost 2.5 years

U.S. private sector companies experienced a marked improvement in business activity growth during February. This was highlighted by a rise in the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index to 55.9, up from 53.8 in January and the highest reading for almost two-and-a-half years.

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Friday, February 16, 2018

4Q 2017 services revenue grew 2.4 percent from previous quarter and 5.2 percent year-on-year

Advance U.S. selected services total revenue for the fourth quarter of 2017 rose 2.4 from the third quarter of 2017 and was up 5.2 percent from the fourth quarter of 2016.

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4Q 2017 e-commerce sales grew 3.2 percent from previous quarter and 16.9 percent year-on-year

U.S. retail e-commerce sales for the fourth quarter of 2017 were $119.0 billion, up 3.2 percent from the third quarter of 2017, and up 16.9 percent year-on-year. Total e-commerce sales for 2017 were estimated at $453.5 billion, up 16.0 percent from 2016.

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January building permits rose to 10.5-year high, up 7.4 percent year-on-year

Privately-owned housing units authorized by building permits in January rose to a 10.5-year high of 1,396,000. This is 7.4 percent above both the revised December 2017 rate and the January 2017 rate.

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January housing starts rebounded 9.7 percent from December to second-highest rate since Great Recession

Privately-owned housing starts in January rebounded sharply from weather-related dips in December to  1,326,000. This is 9.7 percent above the revised December estimate, 7.3 percent above the January 2017 level, and is the second-highest annual rate since the Great Recession.

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Thursday, February 15, 2018

Gallup: 2017 Economic Confidence Index varied greatly by state, but average rating rose by 20 points

Residents in three states -- Wyoming, North Dakota and Utah -- essentially tie as the most confident in the U.S. economy, based on their scores on Gallup's Economic Confidence Index throughout 2017. In contrast, Vermont residents were least confident.


Several bottom-ranking states this past year -- including California, Hawaii, Maryland and Rhode Island -- ranked among the top states in 2016 but were surpassed by most other states because their confidence scores did not improve in 2017.

Massachusetts was the only other state that did not show gains in economic confidence last year, and it finished just outside the bottom 10 after ranking first overall in 2016 with an identical score of +2. 

On average, economic confidence improved by 20 points in each state.


Gallup: Half of U.S. states saw well-being scores decline in 2017

Nearly half of U.S. states saw their well-being scores decline by a statistically significant margin in 2017, according to the Gallup-Sharecare Well-Being Index. And, for the first time in nine years of tracking changes in state well-being, no state saw statistically significant improvement from the year before.

The Gallup-Sharecare Well-Being Index score for the nation and for each state is based on metrics that make up five essential elements of well-being:

1.  Purpose: liking what you do each day and being motivated to achieve your goals
2.  Social: having supportive relationships and love in your life
3.  Financial: managing your economic life to reduce stress and increase security
4.  Community: liking where you live, feeling safe and having pride in your community
5.  Physical: having good health and enough energy to get things done daily

For the nation as a whole, the Well-Being Index score for the U.S. in 2017 was 61.5, a decline from 62.1 in 2016 and the largest year-over-year decline since the index began in 2008.

Gallup: U.S. leadership ratings fall during first year of Trump's presidency to record-low 30 percent

Ratings of U.S. leadership fell in nearly every part of the world in the first year of Donald Trump's presidency, dragging median approval to a record-low 30%.

Approval of U.S. leadership dropped across all demographic groups during Trump's first year, but groups that typically give U.S. leadership higher approval ratings -- those with more education, those earning higher incomes and those who live in urban areas -- registered the largest declines.

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Initial unemployment claims rose 7,000 in weekly report

In the week ending February 10, the advance figure for seasonally adjusted initial claims was 230,000, an increase of 7,000 from the previous week's revised level. The 4-week moving average was 228,500, an increase of 3,500 from the previous week's revised average.

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Mortgage applications dip 4.1 percent as rates right to highest level since January 2014

The Market Composite Index decreased 4.1 percent on a seasonally adjusted basis from one week earlier, with purchase loans down 6.0 percent and refinances falling 2.0 percent.  The average contract interest rate for 30-year fixed-rate mortgages increased to its highest rate since January 2014, 4.57 percent, from 4.50 percent.

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Bloomberg: Consumer comfort index shakes off stock market turmoil to highest level since February 2001

U.S. consumer sentiment jumped 2.6 points last week to 57, or the highest level since February 2001, indicating Americans were shaking off turbulence in the stock market.  This weekly gain was the highest since 2009.

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December business inventories up 0.4 percent, sales rose 0.6 percent

Business inventories in the U.S. rose 0.4% in December after a similar gain in the prior month. Sales rose 0.6% in December. The ratio of inventories to sales held steady at 1.33.

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Builder confidence remains at 72 in February

Builder confidence in the market for newly-built single-family homes remained unchanged at a healthy 72 level in February. The HMI component charting sales expectations in the next six months rose two points to 80, the index measuring buyer traffic held steady at 54, and the component gauging current sales conditions dropped one point to 78.

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January Producer Price Index rose 0.4 percent and 2.7 percent year-on-year

The Producer Price Index for final demand increased 0.4 percent in January. Final demand prices were unchanged in December and moved up 0.4 percent in November.  The final demand index rose 2.7 percent for the 12 months ended in January.

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Wednesday, February 14, 2018

February Business Inflation Expectations steady at 2.0 percent in the year ahead

According to the Atlanta Federal Reserve monthly survey, firms' inflation expectations were unchanged at 2.0 percent over the year ahead.

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January retail sales fell 0.3 percent, largest decline in 11 months

Americans cut back on purchases of cars, furniture and a variety of other products in January, pushing retail sales down by 0.3%, the biggest decline in 11 months. The January decline, following no change in December, was the largest setback since a 0.5% fall in February of last year.

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CPI up 0.5 percent in January and 2.1 percent year-on-year

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in January, and was up 2.1 percent year-on-year. The index for all items less food and energy (i.e., core inflation) increased 0.3 percent in January, and was up 1.8 percent year-on-year.

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MBA: January new home mortgage applications up 34.0 percent from December and 18.4 percent year-on-year


Mortgage applications for new home purchases increased 18.4 percent compared to January 2017. Compared to December 2017, applications increased by 34 percent. This change does not include any adjustment for typical seasonal patterns.