1/12/21: P. Duffy Econ Update
Initial unemployment claims slip 2.3 percent to 793,000, but still at elevated levels
What does this mean? Initial unemployment claims remain quite high by historical standards, and extensions of unemployment aid boosted overall aid claims related to the pandemic.
In the week ending February 6, initial unemployment claims were 793,000, a decrease of 19,000, or 2.3 percent, from the previous week’s revised level. Continued unemployment claims during the week ending January 30 were 4,545,000, a decrease of 145,000 from the previous week’s revised level. The total number of continued weeks claimed for benefits in all programs for the week ending January 23 was 20,435,018, an increase of 2,596,539, or 11.3 percent, from the previous week.
https://www.dol.gov/ui/data.pdf
Study shows new low-income housing has no consistent impact on nearby housing values
What does this mean? More recently built housing projects are designed to fit in much better with surrounding neighborhoods than in the past.
Construction of low-income housing developments has had no consistent impact on the sale prices of nearby homes, according to an analysis of over 220,000 home sales in neighborhoods with low-income housing developments in 26 metro areas across the U.S. from 2007 through 2019. In 18 of the 26 metro areas studied, no significant difference was detected in the prices of nearby homes sold before and after the construction of a low-income housing development, in four metro areas nearby home prices rose, and in four metro areas nearby home prices fell.
https://www.redfin.com/news/low-income-developments-home-values/
Multi-family construction market forecast to dip in 2021, but stabilize in 2022
What does this mean? A combination of issues will challenge the multi-family market this year, but next year production could rise 5 percent as vacancy rates and rents stabilize.
Regulatory and supply-side challenges coupled with slowing rent growth and rising vacancy rates will weaken the multifamily construction market in 2021. However, the development market should stabilize by 2022. Multifamily starts are expected to fall 11 percent this year to 349,000 units from a projected total of 392,000 in 2020. The downturn will be short-lived, as multifamily production is expected to post modest gains in 2022, up 5 percent to 365,000 units.