The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
As we start a new and (hopefully) healthier year, we would like to announce that our weekly MMQ newsletter will now be authored not only by me, but also by all the principals of Elliott D. Pollack & Company: Rick Merritt, Jill Stevenson, and Danny Court. These economists, who represent a total of over 60 years’ experience, will add their thoughts to my own. It has been a great pleasure to write the MMQ and send it out to the thousands of weekly readers. Your feedback has made it fun as has my license to be candid. My partners will help me continue the tradition. I want to thank you from the bottom of my heart for supporting me, the Company and the MMQ all these years. Be well and stay safe. Elliott
Now for this week’s data:
Nationally, we saw unemployment claims drop slightly once again. And in terms of housing, the Case Shiller index continues to report high rates of home value growth, 30-year mortgage rates rose ever so slightly but still remain historically low, and the NAR pending home sales decreased for the second consecutive month. Classic supply and demand imbalance at play here. Low supply means there won’t be as many sales no matter what demand levels rise to and competition for those remaining homes increase the price.
Here locally, air traffic is still down substantially. Sky Harbor reported a 52.4% decline in traffic for November compared to the previous year. Also, Case Shiller has now ranked Greater Phoenix at the top of its metro areas in terms of home value growth for 17 straight months with the latest reading of 12.7% in October.
- Initial claims declined by 19,000 in the week ending December 26. Initial claims (787,000) dipped below 800,000 for the first time since the week ending November 28.
- 30-year mortgage rate rose from an all-time low of 2.66% in the prior week to 2.67%. The rate dropped from 3.72% at the start of the year. The rate is expected to remain near flat in 2021. Record low rates have allowed buyers to absorb the price increased seen in 2020.
- NAR’s Pending Home Sales Index decreased for the second consecutive month in November at 125.7 down from 129.1 in October. The decline is primarily due to the lack of inventory and the resulting upward pressure on prices. While the index declined compare to October, it remains 16.4% above the level last year.
- The Case-Shiller 20-City Composite index increased at its highest growth rate since 2014. The October level had an annual growth of 7.9% in October. This growth continued to reaffirm the strength of the housing market in 2020.
- Air traffic continued to be down considerably in November. Enplaned passengers were down 51% from a year ago and deplaned were down 50.9%. Year-to-date, total traffic was down 52.4% through November.
- According to the Case-Shiller Price Index, Greater Phoenix continues to outgrow other major cities. Greater Phoenix grew 12.7% in October while cities like Seattle and San Diego grew at 11.7% and 11.6% respectively. This is the 17th consecutive month the Valley has led the index in growth.
Elliott D. Pollack & Company (EDPCo) offers a broad range of economic and real estate consulting services backed by one of the most comprehensive databases found in the nation. This information makes it possible for the firm to conduct economic forecasting, develop economic impact studies and prepare demographic analyses and forecasts. Econometric modeling and economic development analysis and planning are also part of our capabilities. EDPCo staff includes professionals with backgrounds in economics, urban planning, financial analysis, real estate development and government. These professionals serve a broad client base of both public and private sector entities that range from school districts and utility companies to law firms and real estate developers.