Happy Friday! Brian Manning here with your weekly update. So much to talk about this week. So, let’s see. On Tuesday this week, we got a report from Case-Shiller. Case-Shiller is kind of the gold standard of reporting on the housing market. And Case-Shiller reports to the month of February, home appreciation was up 1.7% for the month. And on a year-over-year basis, housing appreciation was up 20%. So… still, ideally, we’d love to see this come down. It’s kind of a ridiculous number, and we’ll have to see how that goes into the rest of this year.
We also had FHFA. They give us a report on appreciation as well. And on a month-over-month basis… I’m sorry, for the month of February is up 2.1%. And on a year-over-year basis, it was up 19.4%. The difference is that Case-Shiller is measuring home appreciation on all homes across the country, whereas the FHFA is only looking at homes that have a conventional mortgage attached to them, so lower priced homes.
Also on Wednesday, we got new home sales. So new home sales for the month of March was down 8.6%. But what’s crazy is they had a revision back for the month of February and the revised February up 8%. So when you take that revision to account, new home sales were only down about 1%. You know, across the country right now, there’s about 407,000 new home available for sale, but only 35,000 are able to be occupied. The rest of them are in some stage of the construction process, can’t be completed, supply chain issues, whatever it’ll be. So, it’s only 35,000 homes available. So, not surprising to see new home sales down.
Also got a report from Redfin this week, and Redfin says that they have seen a little bit of a decline in homes that are getting bid up above the list price. But that number is still above 50%. So still, of all listings across the country, over 50% of them are still selling above list price, which is unbelievable.
Thursday, we’ve got GDP for the first quarter, so there’s typically three readings for the GDP. First reading show that GDP for the first quarter was down 1.4%. We’ve been talking about this for quite a while. We’ve been saying that a recession is coming. It does not mean that we’re in a recession right now, but definitely was not surprised to see that. There’s also a lot of talk this week about inflation, as we’ve been talking about for quite a while. A lot of people are wondering if we’re going to see peak inflation here in the summer. We don’t think so. We actually think we’re going to see peak inflation in the month of September. And if you get a peak inflation in the month of September, you don’t actually get that reading until the month of October. So, we still think that we have some time in front of us for the inflationary pressures to be digested into the marketplace. But again, we don’t think we’re going to see it until October.
Also… looking at peak inflation, you have inflation impacting mortgage rates. We’ve all seen mortgage rates rise. You’re going to have the Federal Reserve hiking rates. You know, typically, this will push us into a recession. We think the recession will come maybe end of this year, beginning of next year. But… historically, recessions are always very favorable for housing because interest rates come down. So, we’re not really overly worried right now as far as the recessionary outlook is concerned because we definitely think it’s going to really give us lower rates into the future.
Today, we got PCE. PCE is a personal consumption expenditure. This is the Federal Reserve’s favorite gauge of measuring inflation. On a month-over-month basis, inflation was up 9/10th of a percent, which is a really high number. Expectations were it to only be up to half a percent. So almost double. On a year-over-year basis is at a 40-year high of 6.4%. We’ve talked about this in the past. I don’t really think that this is the most accurate number for inflation because the PCE does not include out-of-pocket medical expenses or housing expenses. And when you see medical expenses going up and you see housing expenses going up, certainly there’s going to be some inflationary pressure there.
And then we also got the Employment Cost Index. So, the Employment Cost Index was Alan Greenspan’s favorite gauge of inflation, and Employment Cost Index was up about 1.1% in Q one of this year. So last week’s update, we talked about this Inflationary spiral where you have cost of goods increasing that employers have to increase the income that they’re paying their employees to keep up with inflation. Then you have inflation go higher and then you have wages go higher. So, you kind of get this upward spiral that you have to keep up with with the cost of Goods increasing. So, certainly, the Employment Cost Index is something to watch really carefully because that’s kind of playing into that spiral we talked about.
Also, we got Apartment List report. Apartment List said last month that we had rents go up 9/10th of a percent on a month-over-month basis, which is a really high number. And on a year-over-year basis, rents were up 16.3%. So, rental market across the United States is certainly very expensive. I’m available all weekend. If you have any questions, let me know. If you want to go through our strategic buyer consultation, learn how you can close in 18 days and compete with a cash offer, give me a call, call me on my cell phone, text me. I’d love to help you. Happy Friday. Have a great day.