ELLIOTT D. POLLACK
& Company
FOR IMMEDIATE RELEASE
May 29th, 2018
The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
Hope you all had a great Memorial Day weekend. Even though summer doesn’t officially start for a few more weeks, the summer season is now here. Yet, that happy, sunny time, economically speaking, started a long while ago and continues today. For example, consumer sentiment continues to be strongly positive, housing prices continue to climb and new and existing home sales remain at high levels.
Locally, the City of Phoenix was ranked the second fastest growing city in terms of population in the country for the 2017 mid-year estimates, housing prices in the state’s two major metro areas grew at rapid rates and lodging demand in the state continues to do well. So, in both meteorological and economic terms, the sun continued to shine on this holiday day weekend.
U.S. Snapshot:
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The University of Michigan consumer sentiment index stood at 98.0 in May. This is down only slightly from the 98.8 recorded in April and up slightly from the 97.1 of a year ago. As you can see from the chart at the bottom, the index remains at a high level.
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30-year fixed rate mortgage rates stood at 4.66% for the week ending May 24. This compares to 4.58% a month ago. A year ago, 30 fixed rate mortgages hovered around 4.0% (see chart below).
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Home prices as measured by the FHFA House Price Index (purchase only) as of the first quarter increased 6.9% from a year ago. The index is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. This level of home price growth has been fairly consistent over the last several quarters.
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Sales of new single family homes in April were at a seasonally adjusted annual rate of 662,000. This compares to a rate of 672,000 in March and 593,000 a year ago.
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After moving upward for two straight months, single family existing home sales retreated in April. Sales were down 3.0% from March and 1.6% from a year ago. The National Association of Realtors believes that the primary cause for the slowdown is what they describe as “the utter lack of available listings on the market to meet the strong demand for buying a home”. Despite the slowdown, existing single family home prices continue to climb. They were up 5.5% over the past year. According to Lawrence Yun, the association’s chief economist, “The current pace of price appreciation far above incomes is not sustainable in the long run.”
Arizona Snapshot:
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The City of Phoenix (as opposed to the Metro Phoenix area) was the second fastest growing city in the country for the year ending July 1, 2017 according to the U.S. Census Bureau. The net change was 24,036 people. The only faster growing city was San Antonio which grew by 24,208 people. The population of Greater Phoenix as of the July 1, 2017 estimates was 1,626,078.
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According to the FHFA home price index described above, home prices in Greater Phoenix increased 8.9% for the year as of the first quarter of 2018. Home prices in Greater Tucson increased 6.7% over the same period of time.
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As of April, statewide hotel/motel occupancy was 73.7% or 2.4% over the year. This compares to 72.0% occupancy rate a year ago. Demand for the year was up 3.9% while supply increased 1.5% for the same time period.
About EDPCo
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.
For more information, contact –
Elliott D. Pollack & company
7505 East Sixth Avenue, Suite 100
Scottsdale, Arizona 85251
480-423-9200
