Last week’s economic reporting included readings on Case-Shiller Home Price Indices, new home sales, and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also released. No readings were released on Thursday or Friday due to the Thanksgiving holiday.
Case-Shiller Reports Highest Pace Of Home Price Growth Since 2014
Case-Shiller reported higher home price growth in September with national home price growth of 7.00 percent on a seasonally adjusted annual basis. August’s national home price growth pace was 5.80 percent. Housing markets in many areas are seeing increased activity due to higher demand for homes.
While higher home prices appear counter-intuitive during the pandemic and related economic challenges, the coronavirus pandemic has created more demand for homes as buyers move from congested urban metro areas to less populated areas. Buyers continued seeking larger homes as working from home and remote learning increased.
Phoenix, Arizona, Seattle, Washington and, San Diego, California maintained the top three ratings for home price growth in the 20-City Home Price Index. New York, New York, and Dallas, Texas reported the lowest rates of home price growth due to large numbers of Covid-19 cases reported earlier this year.
In related news, the Commerce Department reported 999,000 sales of new homes on an annual basis in October. The year-over-year gain was 41.50 percent higher than one year ago.
Mortgage Rates, Jobless Claims Mixed
Freddie Mac reported no change in average rates for fixed-rate mortgages, which averaged 2.72 percent for 30-year fixed-rate mortgages and 2.28 percent for 15-year fixed-rate mortgages. and an increase of 0.31 basis points for 5/1 adjustable rate mortgages, which averaged 3.16 percent. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.30 percent.
Initial jobless claims rose last week with 778,000 first-time claims filed. Analysts expected 720,000 claims based on the prior week’s reading of 748,000 initial jobless claims filed. Ongoing claims fell to 6.07 million claims filed as compared to the prior week’s reading of 6.37 million continuing jobless claims filed.
The University of Michigan reported a lower reading for consumer sentiment in November with an index reading of 76.9. Analysts expected a reading of 76.8 and the prior month’s reading was 77.0. Rising numbers of Covid-19 cases will likely cause further declines in consumer sentiment.
What’s Ahead
This week’s scheduled economic reporting includes readings on pending home sales, construction spending, and labor-sector reports on public and private sector jobs and the national unemployment rate.
Last week’s economic reporting included readings on housing market conditions, sales of previously owned homes, and housing starts and building permits issued. Weekly reports on mortgage rates and jobless claims were also released.
NAHB: Homebuilder Confidence Hits Record High in November
The National Association of Home Builders reported a fourth consecutive record high for builder confidence as November’s index reading of 90 exceeded October’s reading of 80. Any reading over 50 indicates that most home builders are confident about housing markets.
Component readings for the Housing Market Index also rose. Builder confidence in current market conditions rose six points to 96. Builder confidence in housing market conditions within the next six months rose one point to 89 and builder confidence in buyer traffic in new housing developments increased by three points to an index reading of 77. Readings of 50 or more for buyer traffic were rare until recent months. Factors driving builder confidence include high demand for homes and record low mortgage rates. High demand for single-family homes is rising due to relocation to suburbs and increased demand for larger homes.
Housing Starts Increase as Building Permits Issued Hold Steady
Commerce Department readings for October show that housing starts rose to 1.530 million starts on a seasonally-adjusted annual basis. Analysts expected a pace of 1.490 million housing starts based on 1.459 million starts reported in September. 1.545 million building permits were issued in October, which matched September’s reading.
Mortgage Rates Hit Another Record Low; Jobless Claims Data Mixed
Freddie Mac reported new record low mortgage rates for the fourth consecutive week. Rates for 30-year fixed-rate mortgages averaged 12 basis points lower at 2.72 percent; rates for 15-year fixed-rate mortgages averaged 2.28 percent and were six basis points lower. Rates for 5/1 adjustable rate mortgages dropped by 26 basis points to 2.85 percent on average. Discount points averaged 0.70 percent for 30-year fixed-rate mortgages and 0.60 percent for 15-year fixed-rate mortgages. Points for 5/1 adjustable rate mortgages averaged 0.30 percent.
First-time jobless claims rose to 742,000 claims filed; analysts expected 710,000 claims filed based on the prior week’s reading of 711,000 initial jobless claims filed. Ongoing jobless claims fell to 6.37 million claims filed as compared to 680,000 continuing jobless claims filed in the prior week.
October sales of previously-owned homes rose to 6.85 million sales on a seasonally-adjusted annual basis as compared to September’s reading of 6.80 million sales of previously-owned homes.
What’s Ahead
This week’s scheduled economic reporting includes readings from Case-Shiller Indices on home prices; new home sales will also be released along with the University of Michigan’s report on consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be released.