Housing Cools Further: April 17 – 21

Housing activity softened further in March. Here are the five things we learned from U.S. economic data released during the week ending April 21.


Existing sales slowed in March. The National Association of Realtors reports that sales of previously owned homes dropped 2.4 percent to a seasonally adjusted annualized rate (SAAR) of 4.44 million. Sales were 22.0 percent below year-ago levels. Sales fell in three of four Census regions during the month (they held steady in the Northeast), while all four regions suffered double-digit percentage drops compared to a year earlier. There remained a lack of homes on the market, with 980,000 units for sale at the end of March. While up 1.0 percent from February and 5.4 percent from a year earlier, inventories represented a paltry 2.6 month supply. The median sales price of $375,7000 was down 0.9 percent from a year earlier. 

Housing starts dropped in March. Starts of privately-owned homes decreased 0.8 percent to a seasonally adjusted annualized rate (SAAR) of 1.42 million units. The Census Bureau data series was off 17.2 percent from a year earlier. While starts of single-family homes grew 2.7 percent in March, they slumped 6.7 percent for multi-family units. Looking towards the future, the annualized count of issued building permits plummeted 8.8 percent to 1.413 million. Single-family home permitting grew 4.1 percent, while that for multi-family units slumped 24.3 percent. Housing completions dropped 0.6 percent for the month to an annualized 1.542 million. Completions were 12.9 percent ahead of their year-ago pace.

Homebuilders remained unimpressed with market conditions. The National Association of Home Builders’ Housing Market Index (HMI) added a point in April to a seasonally adjusted 45. Since last August, the HMI has been below 50, meaning more homebuilders see the housing market as “poor” instead of “good.” The HMI improved in the West and Midwest. The index measuring current single-family home sales added two points to 51, while the expected sales measure added three points to 50. The index tracking traffic of prospective buyers remained at 31. The press release noted that a lack of homes for sale was responsible for the recent rise in builders’ sentiment.

Forward-looking economic measures continued deteriorating in March. The Conference Board’s Leading Economic Index (LEI) fell 1.2 percent (108.4, 2016=100) after losing a half point in February. The LEI has declined 4.5 percent over the past six months and was at its lowest level since November 2020. Only two CEI components made positive contributions: stock prices and new orders for consumer goods. The coincident index (CEI) inched up 0.2 percent during the month, matching its February gain, to 110.2 (+0.8 percent versus September 2022). The lagging index (LAG) slipped 0.2 percent to 118.3 (+1.1 percent versus September 2022). The group expects a recession to start in mid-2023. 

Payrolls held steady in most states in March. The Bureau of Labor Statistics reports that only two states—Massachusetts and Kentucky—enjoyed significant nonfarm payroll gains from the prior month. In comparison, employment essentially held steady in the other 48 states and the District of Columbia. On a year-to-year basis, payrolls swelled in 42 states and held steady in the other eight states and the District of Columbia. The unemployment rate declined in 18 states, rose in the District of Columbia, and was stable in 32 states relative to February. Compared to March 2022, the unemployment rate fell in 11 states and the District of Columbia, held firm in 29 states, and grew in 29 states. 

Other U.S. economic data released over the past week:

  • Jobless Claims (Week ending April 15, 2023, First-Time Claims, seasonally adjusted): 245,000, +5,000 vs. the previous week, +28,000 vs. the same week a year earlier). 4-week moving average: 239,750 (+10.6% vs. the same week a year earlier). 
  • Treasury International Capital (February 2023, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): +$63.6 billion (vs. January 2023: +31.7 billion; vs. February 2022: +$94.6 billion. 
  • Beige Book

The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.

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