MetroIntelligence Economic Update by P. DUFFY
March Leading Economic Index edges up another 0.3 percent
The US LEI rose again in March despite headwinds from the war in Ukraine. This broad-based improvement signals economic growth is likely to continue through 2022 despite volatile stock prices and weakening business and consumer expectations. However, downside risks to the growth outlook remain, associated with intensification of supply chain disruptions and inflation linked to lingering pandemic shutdowns and the war, as well as with tightening monetary policy and persistent labor shortages.
Purchase loan apps fall 2 percent from previous week and 14 percent year-on-year
The Market Composite Index for mortgage applications decreased 5.0 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 2 percent (and down 14 percent year-on-year) and refinance activity falling 8 percent (and down 68 percent year-on-year). The average contract interest rate for 30-year fixed-rate mortgages increased to 5.20 percent from 5.13 percent.
Buyers’ perceptions of housing availability retreat to 2018 levels
Buyers’ expectations of housing availability continue to worsen. At its peak in the 4th quarter of 2020, 36% expected the home search to get easier in the months ahead. After five straight drops, the share is now 17% – a level not seen since 2018. In contrast, 74% expect the search for a home to get harder/stay the same. Buyers’ worsening perceptions of housing availability reflect the record-low levels of housing inventory available in the market.