MetroIntelligence Economic Update by P. DUFFY
February home prices rise for first time in seven months
Adjusted for seasonality, prices were up 0.16% in February – the strongest single-month gain since May 2022 – while at the same time, at 1.94%, annual home price growth fell below 2% for the first time since 2012. Home prices are now -2.6% off their 2022 seasonally adjusted peak nationally, a marginal strengthening from -2.7% in January. Sales were up in the month on interest rate dips according to Collateral Analytics data from Black Knight, but remained 18% below 2019 pre-pandemic averages as affordability pressures continue to weigh on demand.
Inflation tracker PCE Price Index up 0.3 percent in February and 4.6 percent year-on-year
The Fed-preferred PCE Price Index rose by a less-than-expected 0.3% in February, down from 0.6% in January but up from 0.2% in December and November. The ‘core’ index minus food and energy costs rose 0.3% in February. Year-over-year, the PCE Price Index rose 5.0% vs. 5.3% in both December and November. Year-over-year, the ‘core’ PCE Price Index rose 4.6% versus 4.7% in December and 4.6% in November.
Consumer sentiment falls 7.5 percent in March, up 4.4 percent year-on-year
Consumer sentiment fell for the first time in four months, dropping about 8% below February but remaining 4% above a year ago. Overall, our data revealed multiple signs that consumers increasingly expect a recession ahead. While sentiment fell across all demographic groups, the declines were sharpest for lower-income, less-educated, and younger consumers, as well as consumers with the top tercile of stock holdings. All five index components declined this month, led by a notably sharp weakening in one-year business conditions.