Home resales, which account for the bulk of U.S. home sales, surged 23.7 percent on a year-on-year basis.
The housing market — the economy’s star performer during the recession caused by the coronavirus pandemic — is being supported by historically low mortgage rates and demand for spacious accommodations for home offices and schooling, mostly in the suburbs and other lower-density areas.
But demand has far outstripped supply, driving up home prices. About 23.2 percent of the labor force is working from home.
Last month, sales fell in the Northeast and West. They rose in the South and the Midwest.
There were a record-low 1.04 million previously owned homes on the market in January, down 25.7 percent from one year ago. The median existing house price shot up 14.1 percent from a year ago to $303,900 in January.
Fed warns of business bankruptcy risks
The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday.
“Business leverage now stands near historical highs,” the central bank said in its semiannual Monetary Policy Report to Congress. “Insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable.”
In part encouraged by government and Fed programs, businesses have taken on more debt over the past year as they’ve struggled to deal with the economic and financial fallout from covid-19, including in some cases forced shutdowns.
The report, which provides lawmakers with an update on economic and financial developments and monetary policy, was published on the central bank’s website ahead of Chair Jerome H. Powell’s testimony before the Senate Banking Committee on Tuesday and the House Financial Services panel a day later.
In the report, the Fed voiced hopes of an end to the pandemic later this year, though it cautioned that pitfalls
remained.
In particular, it said that commercial real estate prices “appear susceptible to sharp declines” from historically high levels. That could prove to be the case if the level of distressed sales picks up or if the pandemic leads to longer-term declines in demand, it said.
California legislation was introduced on Thursday to mandate that employers with 1,000 employees or more subsidize the cost of emergency child-care arrangements. The bill would be the first of its kind in the United States to mandate that companies offer backup child-care subsidies. The pandemic has exasperated the need for child care as more than 2 million women and low-income workers left the workforce to care for their families.
U.S. factory activity slowed in early February, probably because of a global semiconductor chip shortage that hurt production at automobile plants, while prices of inputs and manufactured goods soared, which could heighten fears of strong inflation growth this year. The report from data firm IHS Markit on Friday also showed businesses in the services industry were experiencing higher costs related to the procurement of personal protective equipment — a greater proportion of which they were passing on to clients.
Aerojet Rocketdyne said on Friday it had received a second request from the Federal Trade Commission for a regulatory review of its proposed takeover by Lockheed Martin. A second request by the FTC could indicate heightened antitrust scrutiny, as the vast majority of deals reviewed by the government and the Department of Justice are allowed to proceed after the first preliminary review. The $4.4 billion deal has raised eyebrows because it would give Lockheed — a large defense contractor — the ownership of a vital piece of the U.S. missile industry.
