US Unemployment Claims Drop, Existing Home Sales Surge, but Concerns Loom Over Data Accuracy and Market Stability

US Unemployment Claims Drop, Existing Home Sales Surge, but Concerns Loom Over Data Accuracy and Market Stability 

The number of Americans applying for unemployment benefits for the first time last week fell to 210,000, compared to the expected 213,000 and the previous week's 212,000. The non-seasonally adjusted number dropped to 190,000, the lowest since October. Continuing claims also saw a downward revision for the 20th consecutive week, standing at around 1.8 million Americans, making things appear "normal" and "stable." However, WARN numbers are increasing rapidly.

Despite the positive trends noted before the meeting, the Federal Reserve officials expressed skepticism about some recent improvements, attributing them to specific and unusual factors. Even they doubt the accuracy of the Biden administration's data, implying that readers should too.

Existing home sales experienced a remarkable 9.5% month-over-month increase in February, surpassing the anticipated 1.3% decline and building on January's 3.1% rise. Nonetheless, despite this substantial monthly increase, existing home sales are still down by 3.3% year-over-year. Total existing home sales surged to 4.38 million at a seasonally adjusted annual rate, marking a 12-month high.

NAR Chief Economist Lawrence Yun noted that homeowners might be acknowledging that mortgage rates are stabilizing, prompting them to proceed with their moves. Yun highlighted that increased housing supply is helping meet market demand, which has been steadily rising due to population and job growth. However, prevailing mortgage rates and wider inventory choices will ultimately dictate the timing of purchases. Although existing home sales may have risen due to a two-month lag, the recent increase in mortgage rates suggests that this trend may soon reverse.

The number of previously owned homes for sale increased to approximately 1.07 million last month, and Yun anticipates this trend to continue. At the current sales pace, it would take 2.9 months to sell all the properties on the market, the lowest in about a year. Realtors consider anything below five months of supply as indicative of a tight market. Despite the greater inventory, strong demand continues to push prices upwards, with the median selling price rising by 5.7% to $384,500 compared to a year ago, marking the highest February figure since 1999. Sales increased in three of the four regions, with the West experiencing the most significant surge at 16.4%.

First-time buyers accounted for 26% of purchases in February, matching the lowest recorded percentage.