Do you want the nitty gritty market details our Mortgage Loan Officers look at on a daily, weekly and monthly basis? Thank you to Barry Habib and the team at MBS Highway here is the current data on current Home Price Expectations, May 2022 Jobs Report, Jobless Claims, Employment Report and FHFA House Price Index. Contact our team if you want to see how these numbers impact you.
Zillow & Pulsenomics Q2 Survey
The Q2 Zillow and Pulsenomics Home Price Expectations Survey, which is something that we take part in and is a survey of the top 100 to 150 economists in the US, showed some interesting forecasts on housing: Of the 114 economists surveyed this time, participants expect on average 4.8% appreciation per year over the next 5 years. Cumulatively, they expect over 26% appreciate. While it’s not easy to buy a home, it still may prove to be a smart financial decision. Risk outlook: 14% risk to upside, 29% balanced, 56% risk to downside On housing currently being in a bubble: 65% no, 35% yes On soft landing: 71% said no, 29% said yes – most believe we will see a recession On peak inflation at 8.5%: 59% said no, 41% said yes.
May BLS Jobs Report
The Bureau of Labor Statistics (BLS) reported that were 390,000 jobs created in May, which was stronger than expectations of 320,000. There was a -22,000 revision to March and April, which tempers the optimism slightly. The Unemployment Rate remained at a very strong 3.6%, but did not decline to 3.5% as expected. The unemployment rate is derived from the household survey, which has its own job creation component. Within the household survey there were 321,000 job creations, while the labor force increased by 330,000, which is why the unemployment rate remained the same. The labor force participation increased slightly from 62.2% to 62.3%. The real unemployment rate is higher than 3.6%, but the U-3, which is what everyone looks at, removes individuals who are not actively searching for a job – There are almost 6 million people that are not being counted that “want a job” but have not looked in the last four weeks. The U-6 all-in unemployment rate, which adds back all these individuals, increased for the second month in a row, rising from 7% to 7.1%. This could be the “canary in the coal mine” on unemployment. Average hourly earnings were up 0.3% in May and are up 5.2% year over year, which is a decline from 5.5% in the previous report. Average weekly earnings were also up 0.3% and are up 4.3% year over year.
May 2022 Jobless Claims
Initial Jobless Claims, which measures individuals filing for unemployment benefits for the first time, decreased by 11,000 to 200,000. While this is still a very low level of initial claims, the four-week moving average is at its highest since mid-February. Continuing claims, which are those that continue to receive benefits after their initial claim, decreased 34,000 to 1.309M. This is the lowest number of continuing claims since December of 1969.
ADP Employment Report
The ADP Employment report showed that there were only 128,000 job creations in the month of May, which was much less than the 300,000 expected and the slowest gain of the recovery. Adding to the weakness was a 45,000 downward revision to April, brining that figure from 247,000 to 202,000. All the job gains were from midsized and large businesses, as small businesses (less than 50 workers) had another big loss of 91,000 jobs after losing 120,000 in April. This continues to show that small businesses are having a tough time competing with higher costs due to inflation and the wage increases demanded by workers. This should contribute to more layoffs and initial jobless claims in the future, but we are not seeing that just yet.
FHFA House Price Index
The FHFA (Federal Housing Finance Agency) released their House Price Index, which measures home price appreciation on single-family homes with conforming loan amounts. While you can have a million-dollar home with a conforming loan amount, it’s typically measuring your lower priced homes. Prices rose 1.5% in March and are up 18.7% year over year, which is a slight decline from 19.4% year over year, but still extremely hot.