March Existing Home Sales Down 2.4% From February, Down 22% Over Last Year… Existing home sales fell more than expected, as mortgage rates inched higher and supply remained low.
What it means— It’s not what you’d expect. Even though prices eased 1% over last year, sellers don’t seem to care. Supply fell 17% over last year, which kept the months of supply at just 2.6 months at the current sales pace, and the multiple offers per home situation is back. The forces of pent-up demand, unwillingness of sellers to budge, and higher mortgage rates are clashing and giving mixed signals. If we go sideways or even a bit lower and then stabilize, it might give buyers the confidence they need to wade back into the market.
March Housing Starts Ease From 1.44 Million to 1.42 Million, Down 17.2% Over Last Year… Apartment building slowed after expanding at a rapid pace in recent months, while single-family starts picked up.
What it means— Take this information at face value. We were building a lot of apartments, about 970,000, and many of them now are coming online. Apartment rents are falling, so developers want to give the market time to absorb the new inventory before building even more units. On the single-family side, things are looking up. The National Association of Home Builders reported that new construction comprised about one third of sales, up from the normal share of one tenth. This shows that home buyers can’t find enough existing home inventory, which helps builders move their units. This is just another piece in the puzzle of how the growing number of Millennial homebuyers are trying to break into the home ownership game.
Leading Economic Indicators Down 1.2% in March, Twelfth Monthly Decline in a row… The Leading Economic Indicators Index (LEI) signals a recession this year.
What it means— It was the biggest drop in LEI since the pandemic. The index, made up of 10 indicators, is meant to show whether the economy is improving or getting weaker. With banks tightening lending standards, the Federal Reserve raising rates, and employment (while still strong) starting to show weakness, the LEI estimate indicates we’ll be in a recession by the third quarter.
Initial Jobless Claims up From 240,000 to 245,000 Last Week, as Continuing Claims Rose From 1.81 Million to 1.87 Million… Initial jobless claims reached the highest level since late 2021.
What it means— In an economy with more than 160 million workers, having 245,000 apply for initial jobless claims is a non-event, but the trend is the thing. We’ve had many months of initial jobless claims near 200,000, so the steady creep toward 250,000 likely signals a cooler jobs market. That’s good in that it gives the Fed a reason to stop hiking rates, but it puts workers in a tough spot. Average earnings aren’t keeping up with inflation, so workers are going backward in their standard of living. If the employment picture darkens, employers won’t have an incentive to raise pay even as inflation hangs around.
On the continued jobless claims side, the number rose from 1.81 million to 1.87 million. Again, this number is rising from a very low level, but it shows the same thing as initial jobless claims. It looks like the jobs market is softening.
Man Sues Netflix After Streaming Company Uses his Personal Picture in Documentary About Murderous Hitchhiker… After the Netflix documentary “The Hatchet Wielding Hitchhiker” started airing, Taylor Hazlewood began receiving odd calls from friends. They said, “Is that you?” Some wanted to know if the respiratory therapist was connected to the case somehow. He wasn’t. He has no idea why Netflix took the photo off of his personal Instagram, but the photograph clearly shows Hazlewood at different points in the show. While Hazlewood’s friends were confused by Netflix lifting the pic, Hazlewood is convinced that others who don’t know him that well will think the worst. He’s suing Netflix for $1 million. If Hazlewood is correct, then he’s short-changing himself. Even if Netflix comes across with the cash, people will think the worst for years to come.
Data supplied by HS Dent Research
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