Weekly Financial and Housing Market Replace

Mar 10, 2023

• The Realtor.com® economics team weekly video update gives you the relevant economic and real estate information you need to know to navigate the housing market as a homebuyer, home seller, or industry professional.
• This week, Chief Economist Danielle Hale discusses the latest labor market readings from jobless claims, the job openings and labor turnover report, and the employment situation summary. She gives her take on what these metrics mean for workers.
• Next, Danielle reviews how investor views on the size of the Fed’s next rate hike have fluctuated this week. Danielle identifies the two key questions to watch out for in the March meeting and the data to pay attention to between now and then.
• Danielle notes this week’s latest mortgage rates and what colleague Jiayi Xu found they mean for buyers and sellers in today’s market and how Fed policy is likely to impact them in the short- and longer-run. 
• With this background, Danielle discusses what Realtor.com weekly data trends suggest about buyer activity and seller expectations of this spring housing market.
• Finally, Danielle shares highlights from the latest housing shortage estimate updated by  Hannah Jones. In short, more building is needed, and closing the gap will take years.
• Find details and Realtor.com® housing data for download at realtor.com/research.  And follow us on twitter: @rdc_economics, for real time updates.

VIDEO TRANSCRIPT:

• I’m Danielle Hale, Chief Economist at Realtor.com® and here’s what you need to know this week!
• As we move further into March, the economy and outlook are shaped by two overarching themes: high hopes that the Fed will be able to navigate to a soft landing and low expectations that a Fed misstep will instead tip the economy into a recession.
• High hopes have been raised by recently stronger economic data, but this week’s numbers left room to bolster cases on either side.  Jobless claims, the most timely indicator, ticked up but remain at a historically low level. 
• Another report showed that although job quits and openings both slipped, they remain well above pre-pandemic rates.
• The unemployment rate edged up in February, but remains at a level that signals job seekers are in a good position. Companies added workers to payrolls, and earnings rose slightly faster than in January.
• Taken together these indicators suggest that the jobs market remains pretty favorable to workers, but that conditions are not improving – roughly where the market needs to be at this stage in the cycle.
• Investor expectations for the upcoming Fed meeting have been on a wild ride this week. On Monday, a minority expected to see a larger 50 basis point rate hike in March.  After testimony from Chair Powell, however, those odds flipped midweek. A second round of testimony and Friday’s jobs report, brought the odds back to roughly even by the close of the week. 
• The Fed is expected to hike rates in March. The key questions revolve around the size of the hike and how the latest data have evolved the Fed’s outlook for the economy and future path of rates. Next week’s inflation data will be an important indicator.
• Against this backdrop, mortgage rates climbed again this week. A potentially faster pace of hikes to a higher Fed rate will likely push mortgage rates up in the near term, but should mean a faster end to inflation, which will ultimately enable mortgage rates to fall. 
• In the meanwhile, Realtor.com housing data suggests that buyers are active in the housing market, even if they are not as numerous as they were one year ago. The time on market gap shrank and the surge in inventory lost some momentum as fewer homeowners decided to sell. Interestingly, price growth eased, perhaps because the smaller number of sellers are calibrating their price expectations to the higher mortgage rate environment.
• And finally, my colleague Hannah Jones updated our housing shortage estimate. The figure is sensitive to a range of assumptions, but even under a fairly optimistic framework, the housing shortage remains in the millions, and it will take several years of building at an elevated pace to close the gap.
• You’ll find all the details along with our housing data for download at realtor.com/research.  You can also follow us on twitter for real time updates.

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