News in end use

Producer Price Index for Final Demand Increases 0.2% in December

The Bureau of Labor Statistics (BLS) reported today (1-13-22) that the Producer Price Index (PPI) for final demand, seasonally adjusted, increased 0.2% in December. The December rise follows a 1% increase in November and 0.6% increases in October, September, and August. On an unadjusted basis, the final demand index rose 9.7% percent in 2021 — the largest calendar-year increase since data were first calculated in 2010.

Mortgage Rates Climb Higher in Week Ending January 13, 2022

Freddie Mac has released its Primary Mortgage Market Survey (PMMS) for the week ending January 13, 2022. The PMMS reports that the 30-year fixed-rate mortgage averaged 3.45% with an average 0.7 point, up from last week when it averaged 3.22%. A year ago, at this time, the 30-year FRM averaged 2.79%.

Weekly Jobless Claims Increase in the Week Ending January 8, 2022

The U.S. Department of Labor is reporting that an additional 230,000 Americans made their initial filing for unemployment benefits during the week ending on Saturday, January 8, 2022. This is an increase of 23,000 from the previous week’s unrevised level. The 4-week moving average was 210,750 — an increase of 6,250 from the previous week’s unrevised average.

Consumer Price Index Increases 0.5% in December and 7.0% Year-Over-Year

The U.S. Bureau of Labor Statistics (BLS) reported on Wednesday (1-12-22) that the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5% in December on a seasonally adjusted annual basis. This follows a 0.8% increase in November and a 0.9% increase in October. Over the past 12-months, the all-item index has increased 7.0% before seasonal adjustment — the largest 12-month increase since the period ending June 1982.

Mortgage Applications Increase in Week Ending January 7, 2022

According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Application Survey (WMAS), for the week ending January 7, 2022, the Market Composite Index (a measure of mortgage loan application volume) increased 1.4% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 46% compared with the previous week. The Refinance Index decreased -0.1% from the previous week.

Mortgage Delinquency Rates Reach Pre-Pandemic Levels in October

According to CoreLogic Loan Performance Report for October, mortgage delinquency rates reached their pre-pandemic levels in October. The drop in the delinquency rate is being credited to an improving labor market and home equity increases. According to the report, in October, 3.8% of mortgages were delinquent by at least 30 days, including foreclosure. CoreLogic’s expectations are that rates will continue to decline during 2022.

FEA’s Paul Jannke Provides Expert Analysis and Insight into North America’s Housing and Lumber Markets in 2022

With the U.S. economy and employment growing robustly in 2021 and 2022, interest rates remaining low by historical standards, many of the supply-side constraints that held back housing over the past half-decade resolved, and high pent-up demand, Jannke says that he expects housing starts will continue to grow from an average of 1.584 million units in 2021 to 1.618 million in 2022. Ultimately, he expects lumber prices will continue to be volatile in 2022.

Mortgage Credit Availability Increased in December

According to the latest Mortgage Bankers Association’s Mortgage Credit Availability Index (MCAI), which analyzes data from Ellie Mae’s AllRegs® Market Clarity® business information tool, mortgage credit availability increased in December. The MCAI rose 0.8% in December to a reading of 125.9. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.

NFIB’s Small Business Optimism Index Increases Slightly in December

The National Federation of Independent Business (NFIB), one of the largest small business associations in the U.S., reported today (1-11-22) that their NFIB Small Business Optimism Index increased slightly in December to a reading of 98.9, up 0.5 points from the November reading of 98.4. Seven of the 10 Index components improved and three declined. Twenty-two percent of owners reported that inflation was their single most important problem.

U.S. Sawmill Output Continues to Trail New Home Construction

The National Association of Home Builders (NAHB) has provided a deeper look into the relationship between U.S. domestic sawmills’ inability to increase output to meet growing demand since mid-2020 and the resulting lack of new home availability. The NAHB cites the lack of increased domestic sawmill activity as one of the primary factors that has contributed to record high lumber and panel prices and continuing price volatility in both the lumber and housing markets.