January 8, 2021
- To keep up with the rapid changes COVID-19 is causing in the economy and housing market, the realtor.com® economics team provides a weekly blog and video update on the relevant real estate and economic information you need to know to navigate the housing market in these challenging times.
- This week, Senior Economist George Ratiu discusses the signs of an economy showing hopeful signs while looking for its footing. He talks about the Institute for Supply Management’s Manufacturing Index, as well as the Commerce Department’s factory orders data. He also mentions the drops in December’s payroll employment, and the latest unemployment insurance claims.
George covers the latest on the real estate front, discussing construction spending figures and the latest inventory data (published by Sabrina Speianu) from realtor.com®. He also touches on another record-low for mortgage rates, along with the slide in applications.
- Welcome to 2021! The year is already facing challenges, with a difficult week in Washington DC, and a resurgence in COVID cases across the country. However, there are signs of hope on the horizon.
- Economic data this week showed activity is still looking for its footing, as funds from the second fiscal stimulus package are flowing into bank accounts. According to the Institute for Supply Management, manufacturing activity advanced in December at the fastest pace since last spring, with new orders, production and employment showing gains.
- Meanwhile, the Commerce Department released numbers for factory orders, showing a seventh consecutive month of gains in November. Orders for manufactured goods rose as many factories adjusted to accommodate health safety measures.
- The monthly payroll employment report highlighted a stalling economy in December, with 140,000 job losses. The headline unemployment rate remained unchanged.
- Meanwhile, highlighting continuing economic headwinds, while the week’s unemployment insurance data showed a small slide in the number of initial claims, the numbers remained elevated. There are still over 19 million Americans receiving benefits across all programs. Encouragingly, the fiscal stimulus legislation extended unemployment benefits, providing much-needed assistance.
- On the real estate front, a Census Bureau report outlined that construction spending increased in November as builders pushed to build more new homes, emboldened by strong buyer demand and low interest rates. Spending on new homes climbed, while new construction dropped for hotels, offices, commercial buildings, and manufacturing plants.
- Realtor.com’s December data showed that home buyers and sellers were much more active during the holiday season compared to 2019. As the number of homes for sales dropped below 700,000, listing prices jumped 13.4 percent from a year ago. Markets are hungry for inventory and looking for a solution to rising affordability concerns.
- Mortgage rates reached another record low this week, offering some reprieve to buyers looking for their next home, and homeowners facing additional fees in the application process.
- Despite record-low rates, mortgage applications declined from two weeks ago, with both purchases and refinances dropping back.
- Stay safe and keep an eye on next week’s update, when we’ll take a look at new data on consumer prices, retail sales and the latest housing market trends.
- Find the trends in your market and download the data at realtor.com/research or follow us on twitter for real time updates.
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