February 10, 2023
- The ¸é±ð²¹±ô³Ù´Ç°ù.³¦´Ç³¾Â® economics team update gives you the relevant economic and real estate information you need to know to navigate the housing market as a homebuyer, home seller, or industry professional.
- This week, Manager of Economic Research George Ratiu talks about the mixed signals in incoming data. He discusses the tension between financial markets’ expectations of a recession and economic figures which underscore a resilient landscape. He also talks about the low level of unemployment insurance claims.
- George mentions that remarks by Federal Reserve governors this week highlighted that the central bank remains committed to additional rate hikes and a prolonged period of tightening, in order to combat inflation. He spotlights that these efforts are showing up in the consumer credit data.
- On the housing front, George talks about the rebound in mortgage rates, which reversed several weeks of declines. He also covers the Fannie Mae Home Purchase Sentiment Index, along with Realtor.com’s latest weekly data, published by Chief Economist Danielle Hale.
- Find details and ¸é±ð²¹±ô³Ù´Ç°ù.³¦´Ç³¾Â® housing data for download at Big gaming/research. And follow us on : , for real time updates.
VIDEO TRANSCRIPT:
- I’m George Ratiu, Manager of Economic Research with Realtor.com.
- With half the country still in the middle of winter and the other half seeing warmer weather, we are traversing the middle part of February with an eye toward Valentine’s Day heart-warming experiences.
- On the economic front, we continue seeing mixed signals. Some companies have been reporting record earnings while others are announcing significant layoffs. Worries of a recession are growing, even as the labor market contends with shortages of workers.
- The tension between expectations and economic data will continue to permeate for several more months. On the one hand, investors have been expecting the economy to fall into a recession following the Fed’s rate hikes, assuming higher borrowing costs will make it challenging for consumers to continue spending. On the other hand, the combination of a strong job market and pandemic savings mean that Americans have maintained a steady consumption pace.
- This week, several Federal Reserve governors, as well as Chairman Jerome Powell spoke about the central bank’s view on inflation and the economy. With the strong jobs report and concerns that elevated wage gains may fuel inflation for a longer period, the Fed will continue pushing the funds rate higher and keep it there for an extended timeframe.
- Higher borrowing costs are beginning to show in the data. Consumer credit in December continued rising, as households coped with higher prices. But the pace of growth was the slowest in 2 years, as Americans moderated credit card, car and student loan usage.
- On the jobs front, this week’s unemployment insurance claims remained at low levels. While announcements of layoffs continue to grow, the combination of severance packages and a still-large number of open jobs are keeping benefit filings in check.
- In real estate markets, this week highlighted continued softness. Mortgage rates rebounded after several weeks of declines. We can expect rates to continue moving up and down in a narrow range for the next few weeks. For first-time homebuyers, rates remain a significant barrier to affordability. At the same time, there are several undercurrents which continue to reshape market dynamics.
- Fannie Mae’s Home Purchase Sentiment Index remained low in January, as buyers are feeling the affordability crunch. However, the index value notched a slight improvement for the third month in a row, with sellers expecting prices to pick up later this year.
- Meanwhile, Realtor.com’s weekly data show that the number of homes for sale continues to grow, even with sellers taking a break during the winter months. Median list prices have declined from their summer peak, and are moving sideways.
- Stay well this week! We will keep you up-to-date at our website and Twitter feed until next week’s video.
- You’ll find all the details along with our housing data for download at Big gaming/research. You can also follow us on for real time updates.
Subscribe to our mailing list to receive monthly updates and notifications on the latest data and research.