Last week’s economic reporting included readings on sales of previously-owned homes, the minutes of the Federal Reserve’s most recent Federal Open Market Committee meeting, and weekly readings on average mortgage rates and jobless claims.
Federal Reserve leaders raise key interest rate range
The Federal Open Market Committee of the Federal Reserve raised the Fed’s key interest rate range by 25 basis points to 4.50 to 4.75 percent. Fed officials cautioned that failure to ease inflationary pressure by raising interest rates could lead to inflation remaining higher than the Fed’s target inflation pace of two percent per year.
In other matters, the minutes of the Fed’s most recent Committee meeting indicated “a number” of Fed officers said that “a drawn-out period of negotiations to raise the federal debt limit could pose significant risks to the financial system and the broader economy.” Failure to increase the federal debt limit could cause the government to default on its loan obligations and lead to political implications as the 2024 election year approaches.
Sales of previously-owned homes fall in January
Previously-owned homes sold at their lowest level since 2010 and declined for the twelfth consecutive month in January. This was the longest consecutive streak of monthly price declines since sales of previously-owned homes were first tracked in 1999. Previously-owned homes sold at a year-over-year pace of 4 million sales; analysts expected an annual pace of 4.02 million sales based on December’s reading of 4.03 million sales.
New homes sold at a pace of 670,000 sales in January, but year-over-year sales were down by 19.4 percent. This was the fourth consecutive month when new home sales rose on a month-to-month basis.
Mortgage rates rise, jobless claims fall
Freddie Mac reported higher average mortgage rates as rates for 30-year fixed-rate mortgages averaged 18 basis points higher at 6.50 percent. Rates for 15-year fixed-rate mortgages averaged 5.76 percent and 25 basis points higher than for the previous week.
New jobless claims fell last week with 192,000 initial claims filed as compared to the expected reading of 197,000 first-time claims filed and the previous week’s reading of 195,000 first-time claims filed.
Consumer sentiment rose to an index reading of 67 in February as compared to the expected reading of 66.4, which matched January’s reading. The University of Michigan’s consumer sentiment index is based on a benchmark reading of 50; readings above 50 indicate that a majority of consumers surveyed held positive views of current economic conditions.
This week’s scheduled economic news includes readings from S&P Case-Shiller home price indices and data on pending home sales. Weekly readings on mortgage rates and jobless claims will also be published.