Tucson Mortgages Home Loan News 4-13-2020

By Todd Abelson NMLS #180858 on .

Week of April 6th, 2020 in Review

The COVID-19 pandemic continues to wreak havoc on the labor sector. The latest Initial Jobless Claims filing was another whopping number, coming in just shy of the record filings set in the previous week.

Inflation news also made headlines, as the wholesale-measuring Producer Price Index and the more important Consumer Price Index for March were released. As expected, inflation fell in March due to the lack of pricing pressure.

The National Federation of Independent Businesses released their small business optimism index for March, and it’s no surprise that it fell to 96.4 from 104.5. This is the lowest level since October 2016, with the decline from February the largest on record. The NFIB explained the obvious: “The outbreak has left few, if any, owners unscathed. The economic impact is immense, and now, the questions are how long will it last and how quickly can the small business sector recover once on the other side.”

CoreLogic released its home appreciation index for February and while this lagging report pre-dated the pandemic, there is a key – and positive – point to take away from it, as noted below.


Initial Jobless Claims Second Highest Ever

The latest Initial Jobless Claims report showed that 6.6 million people filed claims during the week ending April 4. This is just below the 6.8 million recorded for the week ending March 28, which was actually revised higher by just over 200,000 claims. It is possible claims for the week ending April 4 could also be revised higher, perhaps even marking a new record high.

For the last three weeks, Initial Jobless Claims have equaled 6.6 million, 6.8 million and 3.3 million respectively, for a staggering nearly 16.8 million total job losses. Unfortunately, this number is expected to climb as much of the economy remains shutdown.


Inflation Falls in March

As expected, inflation decreased in March due to the lack of pricing pressure. On the wholesale level, the Producer Price Index declined by 0.2% while Core PPI, which excludes volatile food and energy prices, also fell 0.2%.

At the consumer level, the Consumer Price Index (CPI) dropped by 0.4%, which was more than the expected 0.3% decrease and the biggest decline in five years. On an annual basis, the rate of inflation decreased by 0.8% to 1.5% when compared to March of last year.

Core CPI, which again strips out volatile food and energy prices, decreased by 0.1%. This was the first decline in 10 years. Core inflation also decreased by 0.3% to 2.1% year over year.

Again, we should expect inflation numbers to go down while the lack of pricing pressure remains. We also need to keep a lookout for signs of deflation, which is a decrease in the general price level of goods and services.


A Takeaway on Home Appreciation

CoreLogic released their home price index, which is an important appreciation report. The data showed that home prices rose 0.6% in February and 4.1% annually, which was an increase from 4% in the prior report. The cities with the highest annual basis increases were Washington DC (4.8%), Boston (4.5%) and Los Angeles (4.3%). While this report pre-dated the pandemic, the key takeaway is that it highlights just how strong the housing sector was beforehand.

Interestingly, CoreLogic did not report their usual forecast for appreciation over the next 12 months, due to the uncertainty caused by the coronavirus. However, before this last report, they were forecasting over 5% appreciation in the next 12 months. Housing is typically a long-term investment, and while we may see a bit of a dip in appreciation over the next year, we expect housing to lead the recovery.


Family Hack of the Week

With many schools now officially closed for the remainder of the spring and stay at home orders in effect throughout much of the country, it is understandable if kids are feeling a bit antsy. If you’re looking for some fun, online activities to do with your kids, here are two free resources for cooking together.

Every weekday at 1 pm ET, Delish’s editorial director Joanna Saltz and her kids will be cooking together on Instagram live. And no need to worry if you can’t join them live, as the videos will be saved on their Instagram feed for 24 hours. Visit @delish on Instagram to learn more, and this article to find out what they’ll be cooking each week.


Jamie Oliver’s young son, Buddy, also has a series of cooking videos on Jamie’s YouTube channel with some great options for cooking with kids. Check out the playlist here

https://www.youtube.com/playlist?list=PLcpoB2VESJme7lSxXEcXyVtFPsMI78lcL. And for more “Get Kids Cooking” options, visit https://www.jamieoliver.com/features/category/get-kids-cooking/.


What to Look for This Week

Once again, weekly Initial Jobless Claims will be the key report to monitor, as record numbers of people filing unemployment claims continues across the country.

There will also be housing data, with the National Association of Home Builder’s Housing Market Index coming out Wednesday, followed by March’s Housing Starts and Building Permits on Thursday.

Over in the manufacturing sector, April’s Empire State Index and Philadelphia Fed Index will be reported Wednesday and Thursday, respectively.

We’ll also get a look at the virus’ impact on Retail Sales when March’s report releases Wednesday.