MetroIntelligence Economic Update by P. DUFFY
New home sales rebound sharply in January but still down 19.4 percent year-on-year
Sales of new single‐family houses in January 2023 were at a seasonally adjusted annual rate of 670,000, up 7.2 percent from December, but down 19.4 percent from January 2022. The median sales price of new houses sold in January 2023 was $427,500, down 0.7 percent year-on-year. The average sales price was $474,400, down 5.3 percent year-on-year. The estimate of new houses for sale at the end of January was 439,000. This represents a supply of 7.9 months at the current sales rate, up from 8.7 months in December and 5.7 months in January 2022.
Pending home sales rebound 8.1 percent in January, but down 24.1 percent year-on-year
Pending home sales increased for the second consecutive month, up 8.1% from December 2022. Month-over-month, contract signings raised in all four major U.S. regions. Pending home sales dropped in all regions compared to one year ago, with the national total falling 24.1%.
January personal spending rose at three times the rate of personal income
In January, personal income increased 0.6 percent (the same as the PCE Price Index), while disposable personal income (DPI) increased 2.0 percent and personal consumption expenditures (PCE) increased 1.8 percent, leading to an increase in the personal savings rate to 4.7 percent.
Fed-preferred inflation tracker spiked up 0.6 percent in January, up 5.4 percent year-on-year
The Fed-preferred inflation tracker PCE Price Index rose 0.6 percent in January versus 0.2 percent the prior month and was up 5.4 percent year-on-year. The ‘core’ index minus food and energy costs also rose 0.6 percent in January versus 0.4 percent the month before and was up 4.7 percent year-on-year. The surprising rebound will put added pressure on the Fed to continue keeping the Federal Funds rate elevated until inflation is under control.