Tricky Labor Market, Confident Home Builders, GDP Slowing

The labor market is in a tricky place right now – millions of job openings and – millions of people unemployed not taking jobs. The number of open jobs is 50% higher than it was before the pandemic. Companies are also more favorable to remote work which opens opportunities. On the flip side, business are having a difficult time finding and retaining workers which causes shortages and halts expansion.

Rates increased slightly this week as Mortgaged Backed Securities continued their downward trend. Rates are up about 0.25% from this time last year.

Home Sales – are up 7% from the previous report but are down 2.3% year over year. Single family homes are down 7.7% year over year. Inventory is down 13% year over year and the median home price is up 13.3% year over year to $352,800. First Time Home Buyers made up 28% of sales, cash buyers 23% and investors purchased 13% of homes.

GDP – the Federal Reserve Bank of Atlanta, a real-time weekly index, measured a 0.5% GDP growth (seasonally adjusted annual rate) in the third quarter of 2021. This is down 1.2% from the previous reading. Looks like the stimulus high is wearing off a bit. Remember that two quarters of negative GDP is the textbook definition of recession.

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Jobs – the number of people filing for unemployment benefits for the first time dropped under 300K this week (pre-covid this was sub 200K). There are now approximately 3.28M people receiving some sort of benefits, which is significantly lower, (12M at its peak) but the workforce isn’t increasing rapidly.

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New Construction – builder confidence rose 4 points in October, the largest increase since November of last year. Current and expected sales remain at very strong levels and a reading above 50 signals expansion.

Applications – to purchase homes are down 5% from last week. Year over year purchases are down 12% (low supply and more cash buyers). Refinance application are down 7% week over week and 22% year over year.

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