Economists' Outlook

Housing stats and analysis from NAR's research experts.

Daily Economic Update: Jobless Claims, FHFA Index

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights jobless claims and the FHFA House Price Index.

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    The initial jobless claims fell last week by 13,000 to 403,000.   This is still not enough to keep the four-week average (currently at 399,000) below last month’s level.  Jobless claims below the 400,000 level usually indicate steady employment growth. Despite significant cyclicality in new claims over the past month, the four-week average has now been below 400,000 for an eighth straight week.
  • The largest increases in initial claims for the week ending April 9 were in California, North Carolina, Kentucky, Texas, and Florida, while the largest decreases were in Minnesota, Iowa, Maine, and Wyoming. There had been 1.3 million net new job additions in the past 12 months to March.
  • Assuming that jobless claims continue to trend down, NAR expects about 1.5 to 2 million net new jobs in the next 12 months.
  • The Federal Housing Finance Agency House Price Index ( FHFA HPI) released today shows continued easing on housing prices, which declined  1.6 percent  from January to February on a seasonally adjusted basis. The year-over-year change in February shows 5.7 percent decline.
  • The FHFA Index is 18.6 percent lower than its peak in April 2007 and currently stands at the February 2004 index level. It appears that the flood of distressed sales and investor purchases continue putting downward pressure on prices. This January to February HPI change is similar with the trend shown in NAR’s median sales price data for the same period. The following month, February to March, NAR shows increase in home prices.
  • The FHFA index, however, only captures the purchase prices of houses bought with mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. This figure excludes mortgages backed by the FHA, which accounted for roughly 15% of home sales in December. The FHFA’s index also does not include cash transactions, which were roughly 33% of sales in February according to NAR’s REALTORS® Confidence Index. The all-cash transactions also continue to grow due to tougher credit restrictions.
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