Last week’s economic reporting included readings on construction spending and labor sector readings on employment and the national unemployment rate for March. Weekly readings on mortgage rates and jobless claims were also released.
Commerce Department: February Construction Spending Falls
The U.S. Commerce Department reported less construction spending in February than in January as construction spending fell by 0.10 percent to a year-over-year reading of $1.844 trillion for all types of construction. Year-over-year construction spending increased by 5.20 percent. While total construction spending fell in February, residential construction spending increased.
Spending on single-family home construction slowed due to builders’ concerns over materials costs, supply chains, and a possible economic recession. Seasonal weather conditions can also contribute to less construction spending during winter. Homebuilders continue to focus on high-end homes, which leaves limited options for first-time and moderate-income homebuyers. High demand for homes and increasing numbers of cash buyers are competing with owner-occupant home buyers who require mortgages to finance their homes.
High home prices and strict mortgage lending standards caused some would-be buyers to rent homes. Multi-family residential construction increased as demand for rental housing expends.
Mortgage Rates Mixed as Jobless Claims Fall
Freddie Mac reported a lower average rate for 30-year fixed-rate mortgages last week. Rates fell by four basis points to 6.28 percent. The average rate for 15-year fixed-rate mortgages rose by eight basis points to 5.64 percent. Initial jobless claims fell to 228,000 new claims filed as compared to the expected reading of 200,000 new claims filed and the previous week’s reading of 246,000 initial jobless claims filed. Continuing jobless claims were unchanged at 228,000 claims filed.
During March the U.S. unemployment rate was 3.50 percent as compared to the expected rate of 3.60 percent and February’s jobless rate of 3.60 percent.
What’s Ahead
This week’s scheduled economic reporting includes readings on inflation, minutes of the Federal Reserve’s recent Federal Open Market Committee meeting, and weekly readings on mortgage rates and jobless claims.
U.S. home prices continued to fall in November according to S&P Case-Shiller’s month-to-month national and 20-city home price indices, but home price growth rates remained in positive territory year-over-year. The national home price index posted a 7.70 percent year-over-year home price growth rate as of November 2022.