Current Climate

Current Climate – March/April 2021

Employment – Total non-farm payroll employment
exceeded expectations in March, rising 916,000.
The unemployment rate dropped to 6.0% from 6.2% in January.

Nearly two-thirds of the employment increase was in
the leisure and hospitality/food and beverage sector.

Construction added 110,000 jobs in March following a
loss of 56,000 in February. Construction employment
is 182,000 below the February 2020 level.

Interestingly, the percentage of employed persons teleworking
in March dropped for the third consecutive month to 21% from
22.7% in February and 23.2% in January suggesting a
post-pandemic trend. 

Economy – The economy has partially rebounded from
the deep contraction of the first half of 2020.

The Conference Board projects U.S. Real GDP growth
of 3.0% (annualized) for Q121 and 5.5% over the year.

The recovery is expected to continue into next year,
yielding an annual growth rate of 3.5% year-over-year.

Existing Home Sales – Existing home sales declined
in February, following two months of gains.

While just one region saw a month-over-month
increase, all four regions recorded year-over-year gains.

Sales were down 6.6% month-over-month
and up 9.1% year-over-year for total sales of 6.22 million.
On a year-over-year basis, regional growth averaged 9.4%,
ranging from 2.3% in the Midwest to 13.2% in the Northeast.

Single-family home sales were at an annual rate of 5.52 million
in February, reflecting an 8.0% year-over-year increase.

Existing condominium and co-op sales recorded a pace of
700,000 reflecting an 18.6% year-over-year increase.   

The median existing home sales price for all housing types
was $313,000 in February, up 15.8% year-over-year.

Prices rose in double digits in every region.
February marked 108 consecutive months of year-over-year gains.

 The median single-family home sales price was $317,100,
up 16.2% year-over-year.
The condo/co-op median sales price was $280,500,
up 12.3% year-over-year.

Housing inventory stood at 1.03 million units in February,
down 29.5% from one year ago.
At the current sales pace, unsold inventory
represents a 2.0-month supply.

Properties typically remained on the market for
20 days in February, down from 36 days a year prior.

74% of homes sold in February were on the market less than a month.

Individual investors/second home buyers purchased 17% of homes.
First-time buyers were responsible for 31% of sales in February.

Investor/second homebuyer activity was up 15% month-over-month;
the first-time homebuyer share was down two percentage points. 

New Home Sales – Sales of new single-family homes
were at an annual rate of 775,000 in February,
reflecting an 18.2% month-over-month loss
but an 8.2% year-over-year gain.

The median sales price of new houses sold in February
was $349,400 reflecting a 1.0% year-over-year increase
and suggesting continued price stabilization.

The estimate of new homes for sale at the end of February
was 312,000, representing a 4.8-month supply
at the current sales pace.

Pending Home Sales – The National Association of Realtors®
Pending Home Sales Index (PHSI) decreased for a second
straight month in February to a reading of 110.3.

The national month-over-month rate of decline was
10.6%. Regional declines ranged from
from 7.4% in the West to 13.0% in the South.

On a year-over-year basis, the Northeast and the Midwest
saw declines of 3.9% and 9.5%, respectively.
The South and the West saw year-over-year increases
of 2.9% and 7.4%, respectively. 

The Zonda (Meyers Research) New Home Pending Sales Index
(NHPSI) came in at 168.3 in February, representing
a 35.0% increase over the year.

Pending new home sales trended at higher year-over-year
levels in 22 of Zonda’s top 25 markets.

According to Zonda data, the best new home markets
in February were Jacksonville, Cincinnati and San Antonio.
Jacksonville led at +80.5%, followed by Cincinnati, +72.8%
and San Antonio up 61.8%.

Mortgage Activity – According to the March 31st report
from the Mortgage Bankers Association (MBA),
purchase mortgage applications decreased
for the fourth straight week, down 1.0%
on a seasonally unadjusted week-over-week basis
but 39% higher than one year ago.

On a seasonally adjusted basis, the measure was down
2.0% month-over-month and up 6%, year-over-year.

At the same time, the 30-year fixed mortgage rate
had dropped three (3) basis points to 3.33%
after seven weeks of increases and was
nearly a half percentage point higher than
at the beginning of 2021.

As of April 7th, the rate had risen again to 3.36%

Mortgage rates jumped above the 3% mark at the end of
February for the first time since July 2020.

In Closing . . . According to an Urban Institute study, single women
are statistically less likely to default on their mortgage
than single men. Nevertheless, single women
pay higher mortgage interest rates.

An analysis of Home Mortgage Disclosure Act (HMDA)
data conducted by Massachusetts-based lending startup
OwnUp revealed that women paid higher mortgage rates
than men –- typically 8 to 10 basis points —
in 49 of 50 states.
The singular exception was Alaska.

Ciao for now.
Stay safe, be well, wear a mask, get shot.