The National Association of Realtors reported that sales of existing homes jumped 14.5% in February to a seasonally-adjusted annual rate of 4.48M, down (-22.4%) as compared to February 2022. This is the largest monthly percentage increase since July 2020 and follows twelve consecutive months of declines. "Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines," said NAR Chief Economist Lawrence Yun. Sales of single-family homes rose 15.3% to a 4.14M annual rate (-21.4% Y/Y) and existing condo sales increased to a 440K annual rate (-32.3% Y/Y). Total housing inventory was unchanged at 980K (+15.3% Y/Y). Properties typically remained on the market for 34 days, up slightly from 33 days in January. Unsold inventory reported in at a 2.6-month run rate, down 10% from January but up from 1.7 months from February 2022. Fifty-seven percent of the homes sold in February were on the market for less than a month. The median sales price increased to $363,000 (-0.2% Y/Y). The median existing single-family home price was $367,500 in February (-0.7% Y/Y) while the median existing condo price was $321,000 (+2.5% Y/Y). Regionally the West (+19.4%) led the way followed by the South (+15.9%), Midwest (+13.5%), and Northeast (+4.0%).
The Federal Open Market Committee (FOMC) announced the raising of its benchmark federal funds rate by 25 basis points, putting it in the range of between 4.75% and 5.00% — the highest level since October 2007. Fed policymakers voted unanimously to raise their benchmark interest rate. The move marked the ninth increase since March 2022 and follows a 25-basis point increase in February, a 50-basis point increase in December, and four consecutive FOMC meetings ending with a 75-basis point climb. The FOMC statement stated that “The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time“. The wording is a softened stance from the previous statements indicating “ongoing increases” would be appropriate to bring down inflation. The FOMC’s latest projections reduce growth over the near term while increasing inflation. The forecast reduced the annual GDP growth to 0.4% in 2023, 1.2% in 2024, and 1.9% in 2025. Inflation for headline/core is projected to be up slightly to 3.3% / 3.6% in 2023, 2.5% / 2.6% in 2024, and 2.1% / 2.1% in 2025. The median unemployment rate is predicted to be 4.5% in 2023, and 4.6% in 2024 and 2025. The median fed funds rate is expected to be 5.1% in 2023, 4.3% in 2024, and 3.1% in 2025.
New orders for manufactured durable goods decreased (-1.0%) in February to $268.4B, this is the weakest reading since April 2020 and follows a downwardly revised (-5.0%) in January and a (+5.1%) increase in December. Total durable goods orders are up (+2.0%) year over year. Much of the decrease in the headline number is attributable to a (-2.8%) drop in orders for transportation equipment which has reported down three of the last four months - decreasing $2.6B to $89.4B. Orders for nondefense aircraft and parts fell (-6.6%), while orders for new cars fell (-0.9%). Orders for electrical equipment, appliances, and components rose (+1.0%). Excluding the steep decline in orders for transportation equipment, “core” durable goods orders were flat and follow a downwardly revised (+0.3%) in January, and (-0.4%) in December. New orders for capital goods decreased (-2.2%) as nondefense capital goods orders dropped (-1.2%). Defense capital goods orders dropped (-7.4%). Shipments of manufactured durable down two consecutive months, decreased (-0.6%) to $274.8B. Transportation equipment drove the decrease, down (-1.4%) to $90.1B.
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