Initial claims for unemployment insurance began falling once again, a positive sign for the employment outlook. Claims for the second week in February represent a 2.6% decline from a week ago and an 8.1% decline from last year.
- Leading indicators declined 0.2% in January following a 0.3% decrease in December and a 0.5% increase in November. The drop was led by declines in stock prices as well as unemployment insurance claims that were on the rise last month. Consecutive month declines do NOT signal a significant increase for the risk of recession. Rather, the 6-month growth rate suggests continued moderate growth in the near term.
- The consumer price index (CPI-U) was unchanged in January on a seasonally adjusted basis and now stands 1.3% higher than a year ago. The base rate of inflation (all items less food and energy), was up 2.2% over the last 12 months.
- The Producer Price Index for final demand goods decreased 0.7% in January, the second consecutive decrease. The decrease was caused by falling energy prices, while food prices actually increased 1%.
- Industrial production increased in January by 0.9% compared to the month prior after a decline of 0.7% in December. Utilities jumped as demand for heating increased and manufacturing increased 0.5% over the month (1.2% above last year), while mining remained unchanged. Production now stands 0.7% below a year ago.
- Capacity utilization increased in January to 77.1% and now stands 2.0% below a year ago and 2.9% below its long-run (1972-2015) average. The current level is below the level that historically been associated with significant increases in business plant and equipment spending (see chart below).
- Privately owned housing units authorized by building permits, while down 0.2% from December, were up 13.5% over a year ago. For the month, single family permits were down 1.6%.
- Builder confidence fell 3 points in February to 58 according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is mainly due to the high cost and low availability of labor and land (finished lots). Builders still remain optimistic in terms of sales trends.
- Modest home prices and declines in the mortgage interest rate allowed 63.3% of new and existing homes sold between the beginning of October and end of December to be affordable to families earning the U.S. median income of $65,800. This up from the 62.2% of homes sold that were affordable to median-income earners in the third quarter.
- The national median home price fell from $231,000 in the third quarter to $226,000 in the fourth quarter. Meanwhile, average mortgage rates edged lower from 4.18 percent to 4.09 percent in the same period.
Arizona’s unemployment claims are still lower than last year (-6.7%).
- Single family sales in Greater Phoenix are down in January from the month prior, though they are 9.2% higher than one year ago. Median prices are still on the rise and are now 9.1% above a year ago. The median single family home price in January was $227,900. Months’ supply of homes is now 5.0 (see below chart).
- According to R. L. Brown, new home permits in January numbered 1,257. This is a 57.3% gain from the same month in 2015. Pinal County’s permit figures more than doubled from last January. New home closings are also 18.9% higher than a year ago.
- In Southern Arizona, new home permits are 12.6% higher than a year ago at 143 permits. New home closings are up slightly from a year ago, while resale activity is up 26.3% from last year. Median resale prices are up by 4.4% while new home prices show a decline of 8.3% in January.
If you want to learn about some financing options, or if you’re looking to get pre-qualified, contact Parker Turk at Sun American Mortgage Company: 602-616-3774.