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Personal finance weekly news roundup March 4, 2023

Weekly Personal Finance News Recap - MARCH 4, 2023

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Credit Sesame’s personal finance weekly news roundup for March 4, 2023. Stories, news, politics and events impacting the personal finance sector during the last week.

  1. Key inflation measure heated up in January
  2. Pending home sales tick up in January
  3. Money lost to scams up 30% last year
  4. Chinese manufacturing rebounds from COVID shutdowns
  5. Purchase mortgage applications dip to 28-year low
  6. Consumer confidence has been fading so far in 2023
  7. CFPB spotlights how fees erode the value of public assistance
  8. Mortgage rates climb for a fourth straight week
  9. Home prices continue to slide

1. Key inflation measure heated up in January

The Personal Consumption Expenditures (PCE) Price Index rose by 0.6% in January. This was the biggest monthly increase in the PCE Price Index since June of last year. Projected over the course of a full year, this would come to a 7.4% annual increase. That would be a step up in inflation after the PCE Price Index rose by 5.7% last year. The PCE Price Index is especially significant because it is the Federal Reserve’s preferred measure of inflation. Stocks plunged on the news, as a resurgence of inflation could mean more interest rate hikes. See full release at BEA.gov

2. Pending home sales tick up in January

Sales of existing homes had a better month than expected in January, but are still way down from a year ago. The index of existing home sales from the National Association of Realtors rose by 8.1% in January. That was the second consecutive monthly increase, but existing home sales are still down by nearly 24% from a year earlier. After a sharp increase in mortgage rates through most of last year, home sales were helped by a mild decline in rates from November through January. However, that improvement may be short-lived as rates turned back upward in February. See article at Yahoo.com

3. Money lost to scams up 30% last year

New data from the Federal Trade Commission shows that nearly $8.8 billion dollars were lost to financial fraud last year. That’s a 30% increase over 2021’s losses. Imposter scams were the most commonly-occurring forms of personal finance fraud, while investment scams incurred the highest losses. Older Americans suffered the highest median losses in cases of financial fraud. See article at AARP.org

4. Chinese manufacturing rebounds from COVID shutdowns

Official Chinese statistics reported the country’s fastest rate of manufacturing growth in more than 10 years. The rapid growth was spurred by the country reopening normal activity after imposing strict anti-COVID measures until recently. The pick-up in capacity may be good for global economic growth, though it may add to inflation pressures, especially for raw materials. See article at Reuters.com

5. Purchase mortgage applications dip to 28-year low

Mortgage applications for home purchases fell by a seasonally-adjusted 6% last week, and are now 44% lower than they were a year ago. This marks the lowest purchase mortgage applications have been in 28 years. Refinancing activity has been hit even harder by the higher mortgage rate environment. Refinance applications are now 74% lower than they were a year earlier. See article at MBA.org

6. Consumer confidence has been fading so far in 2023

The Conference Board’s Consumer Confidence Index fell for the second straight month in February. While consumers’ view of current conditions actually improved slightly during the month, their outlook for the months ahead fell sharply. The Expectations Index is now at 69.7, and when that index is below 80 it often signals a recession within the next year. The Expectations Index has now been in that danger zone for 11 of the past 12 months. See release at Conference-Board.org

7. CFPB spotlights how fees erode the value of public assistance

Certain government financial benefits to needy individuals are increasingly being issued via prepaid cards. The Consumer Financial Protection Bureau (CFPB) has expressed concern that the companies that administer those cards are charging excessive fees. These fees reduce the value of the benefits individuals actually receive. For example, in 2020 prepaid card administrators charged a total of $1.3 billion in transaction fees on public benefits. In some cases, people can avoid these fees by having their benefits directly deposited in a bank account rather than issued via a prepaid card. The CFPB has announced its intention to look into abusive fee practices by prepaid card issuers. See news release at ConsumerFinance.gov

8. Mortgage rates climb for a fourth straight week

After beginning the year in  a mild downtrend amid optimism about inflation easing, over the past month mortgage rates have reflected a growing consensus that inflation will prove to be stubborn. Both 30-year and 15-year mortgage rates have now risen for four straight weeks. 30-year rates are now up to 6.65% after bottoming out at 6.09% at the beginning of February. See update at FreddieMac.com.

9. Home prices continue to slide

The S&P CoreLogic Case-Shiller National Home Price Index declined for the sixth consecutive month in December. Higher mortgage rates were cited as a key factor holding back the housing market. Home prices declined by 0.8%, and are now 4.4% lower than the peak they reached in June. Even so, despite the recent slump, housing prices are now far from cheap. They remain 5.8% higher than they were a year earlier. Also, it’s important to note that housing conditions vary greatly from market to market. Home price changes for 2022 ranged from a high of 15.9% in Miami to a low of -4.2% in San Francisco. See full release at SPGlobal.com.

Weekly News Headlines from Credit Sesame

Richard Barrington
Financial analyst for Credit Sesame, Richard Barrington earned his Chartered Financial Analyst designation and worked for over thirty years in the financial industry. He graduated from St. John Fisher College and joined Manning & Napier Advisors. He worked his way up to become head of marketing and client service, an owner of the firm and a member of its governing executive committee. He left the investment business in 2006 to become a financial analyst and commentator with a focus on the impact of the economy on personal finances. In that role he has appeared on Fox Business News and NPR, and has been quoted by the Wall Street Journal, the New York Times, USA Today, CNBC and many other publications.

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