by Valorie H. Rice
Senior Specialist, Business Information
Real gross domestic product increased at an annual rate of 1.0% in the fourth quarter 2015, a bit higher than the advance estimate of 0.7%. The third quarter had a real GDP increase of 2.0%.
Fourth quarter house prices were up 8.7% over the year in Arizona, ranking it seventh among states for annual price appreciation, according to the Federal Housing Finance Agency (FHFA) House Price Index. Prices were up 5.8% nationally over the year and all states had positive appreciation, with Nevada having the highest increase at 12.7% using the purchase-only index. Metropolitan area house price appreciation data are available with the all-transactions index, which includes both purchase and refinance mortgages. House prices for Arizona metros increased annually in the fourth quarter by 7.7% in Phoenix, 6.8% in Lake Havasu City-Kingman, 6.6% in Prescott, 6.5% in Flagstaff, 5.6% in both Yuma and Sierra Vista, and 4.0% in Tucson.
There were 3,579 initial unemployment claims in Arizona the week ending February 13, down 689 from the week prior. The four-week average was 4,102 compared with 4,375 the week before. Continued claims for Arizona were 27,383, which were about 7% less than the same time last year. Nationally, initial applications for unemployment benefits rose 10,000 to a seasonally adjusted 272,000 for the week ending February 20. The four-week average, which smooths out volatility, was down slightly at 272,000.
Phoenix house prices rose 6.3% over the year in December, according to the February 23 S&P/Case-Shiller Home Price Indices release. This was nearly a full percent higher than the U.S., which had a 5.4% 12-month change. Of the 20-city composite, Portland had the highest increase in home value over the same time period at 11.4%, while the lowest was Washington, D.C. at 1.7%.
Consumer prices were unchanged in January, according to the February 19 Bureau of Labor Statistics release. Once again, the decrease in energy costs, specifically fuel, played a part in evening out the increase in prices nearly everywhere else. There were broad-based increases for all items less food and energy (food was unchanged for the month). The 12-month inflation rate was 1.4% before seasonal adjustment.
Home affordability was better for two Arizona metros (Yuma and Tucson) and slightly up nationwide in the fourth quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index, released February 18. Affordability is measured by the percent of new and existing homes sold during the quarter that are affordable to those earning the median family income for that area. For the U.S., this was 63.3% in the fourth quarter, up from 62.2% in the third quarter. All of the Arizona metro areas measured had higher affordability than the nation. Flagstaff, which is typically less affordable than the U.S., has not been included in the report for the last two quarters. Here are the shares for Arizona metros: Yuma, 77.9%; Tucson, 77.0%; Lake Havasu City-Kingman, 73.2%; Phoenix, 68.2%; and Prescott, 63.7%. Affordability was up in Tucson and Yuma compared to the third quarter, but lower elsewhere in the state.
Producer prices were up just 0.1% in January. Final demand goods were down 0.7% while final demand services were up 0.5% for the month. The change in producer prices over the year was -0.2% on an unadjusted basis.