Unemployment Insurance Claims, FHFA Price 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 discusses unemployment insurance claims and the FHFA price index.

• In today’s economic data, the number of people filing for unemployment checks for the first time fell a bit in the past week. The latest tally of 348,000 is pretty much close to normal, at least in regarding filings, because there are always layoffs and firings even during normal times due to the dynamic nature of the U.S. economy.
• Notable changes in the past week were seen in Florida and Pennsylvania, where those states noted fewer unemployment checks because of fewer layoffs in the construction industry.
• It helps to keep in mind that the number of people classified as long-term unemployed still remains very high. Because of falling first-time filers, fewer people will move into this category, but many in the long-term unemployed status are not coming out of this position.
• If the figure for first-time filers remains at around 350,000 each week for a prolonged period, it would generally be associated with near 3 million net jobs created for the year.
• More jobs naturally mean more home sales and greater demand for occupancy spaces for commercial real estate.
• In other news, home prices were stable according to the government. Federal Housing Finance Agency (FHFA) computes home price data using the same repeat-price calculation like Case-Shiller but only from Fannie- and Freddie-backed loans, and this index showed that home values were unchanged in January from one month prior. Prices were still down from one year ago, but by less than one percent. The West North Central region posted a huge gain of 4.7 percent in a single month – probably due to the oil boom in North Dakota. However, this FHFA data is like looking in a rearview mirror. Looking ahead, February and March are showing improved price conditions because of higher sales and lower inventory. The price data in the upcoming months will surely turn even better.