April 14-18 Economic News

( My comments are in italics)

The following information is national and although important to our local economy, it must be viewed as affecting and influencing but not necessarily representative of our local real estate market.

In line with analysts' expectations, consumer prices pushed 0.3% higher in March after being unchanged in February, the Commerce Department reported April 16. Core consumer inflation, which excludes food and energy costs, rose 0.2% in March. Over the past 12 months, consumer inflation is up 4%, reflecting relentless gains in energy costs, which are up 17% over that period, and food prices, which are up 4.4%.

At the wholesale level, producer prices rose 1.1% in March, almost triple the 0.4% rise economists had expected. Core wholesale inflation, which strips out energy and food costs, rose just 0.2%, down from a 0.5% increase in February. For the past 12 months, producer prices are up by 6.9% and core producer inflation is up 2.7%, the biggest year-over-year increase in two years.

Inflation can cause an increase in mortgage interest rates. Keep an eye on changes that the Federal Reserve makes to lending rates. If you are considering a refinance or purchase, rates are currently low and long term predictions do not indicate any sizable decreases to mortgage rates. The Fed will continue to attempt balancing stimulation with inflation.

Housing starts fell by 11.9% in March to an annual rate of 947,000 units, the Commerce Department said April 16, a much bigger decline than economists were predicting. Meanwhile, building permits fell 5.8% to an annual rate of 927,000, the slowest pace since a 916,000 rate in April 1991.

This is good news for balancing supply in a buyers market as decreases in inventory and continued sales will create a balance in supply with demand. The problem is that those associated with the construction industry will continue to have trouble.

First-time claims for jobless benefits rose by 17,000, to 372,000 for the week ended April 12, the Labor Department reported. The four-week moving average of new claims held steady at 376,000.

According to RealtyTrac Inc, foreclosure filings were 5% higher in March than February and 57% higher than a year ago. March marked the 27th consecutive month of year-over-year increases in national foreclosure filings. Approximately one in every 538 households received a foreclosure filing in March.

The foreclosures locally are not at a volume that has a large impact on the market but if a national lender is willing to dump a property it will affect the values of neighboring homes.

Economic data compiled from government reports and news services Bloomberg.com, msnbc.com, cnbc.com, cnn.money.com and Yahoo Economic Calendar.