Elgin Area Chamber Of Commerce: Ukraine Invasion Roils Stock Market, Jobless Claims Fall, Multifamily Builder Confidence Improves

Press release from the Elgin Area Chamber of Commerce:

February 25, 2022

Ukraine Invasion Roils Stock Market

Russia invading Ukraine roiled Wall Street on Thursday but the markets surged back to finish higher, including U.S. real estate stocks.

The major indices plummeted early in the day and then started to climb as traders shook off the Russian invasion. The technology-heavy Nasdaq Composite finished the day 3.3% higher while the S&P 500 rose 1.5% and the Dow Jones Industrial Average rebounded from an 859-point drop to finish 92 points higher.

Each of the major indices still have ground to recover after falling over the past week because of worries over economic and geopolitical uncertainties.

The Dow Jones U.S. Real Estate Index, which tracks real estate investment trusts and other companies investing directly or indirectly in real estate, rose 1.83% to 394.09 after starting out lower.

Those stocks, though, have been on a downward slope since December after hitting a peak of 453.47 for the 22-year-old index.

Oil prices rose on the day with the global benchmark Brent crude breaking $100 per barrel for the first time in eight years. West Texas Crude rose a bit to $93 per barrel but is off this year’s peak of $95.46 on Feb. 14 and still the highest since 2014.

Jobless Claims Fall

New claims for unemployment benefits fell last week as those collecting unemployment fell to the lowest level in more than five decades.

The Labor Department reported there were 232,000 new claims last week, 17,000 lower than the previous week’s figure that had been revised upward by 1,000. Unadjusted seasonally figures, or the raw data, fell 24,824 to 214,873.

Meanwhile, the number of people using unemployment benefits, known as continuing claims, fell 112,000 to 1.476 million, the lowest level since 1970.

Also on Thursday, the Commerce Department reported that gross domestic product grew at an annual rate of 7% during the fourth quarter of 2021 instead of 6.9% the agency announced in January.

Higher private inventory investment by retail and wholesale businesses drove the increase. Increases in exports of goods and services also helped.

Multifamily Builder Confidence Improves

Confidence among apartment and condominium builders improved in the fourth quarter, marking three consecutive months to reach the highest level since mid-2019.

The National Association of Home Builders’ index rose to 54, a point higher than the previous quarter, according to findings from the organization’s quarterly market survey.

In a statement, Robert Dietz, NAHB’s chief economist, said the index's strength is consistent with Census data showing "750,000 apartments under construction and new apartments being started at a rate in excess of 500,000 per year."

But a separate occupancy index based on the survey showed a decline of six points to 69, still strong territory. That measures perception of occupancies in existing apartments.

“Multifamily developers remain largely optimistic about this segment of the market,” said Sean Kelly, executive vice president of apartment owner and manager LNWA and chairman of NAHB’s Multifamily Council, in the same statement. “Demand in many parts of the country has been strong enough to compensate for the rising costs of land, labor and materials.”

Source: www.CoStar.com

This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author’s own.