The housing market just cannot seem to gain the growth traction that so many people have been hoping for.
- Existing home sales are likely to remain flat in the coming months when you look at the pending home sales report for the month of August.
- The latest data shows pending home sales fell 1.4 percent.
- The report was disappointing to say the least and unexpected as many analysts were anticipating a gain for the month.
- The Northeast posted the biggest decline at 5.6 percent.
- The South, which is the largest housing region declined 2.2 percent.
- The West was the only bright spot in the report posting an increase of 1.8 percent.
The on-going lack of inventory seems to be the main cause of the declines in existing home sales.
- It seems that demand for housing has softened slightly and has been impacting home prices as well.
- The bright side is that new home sales and construction remain strong.
The latest Case-Shiller report shows surprising weakness in home prices for the month of July.
- The latest release shows a decline of 0.2 percent for the 20-city adjusted index.
- The July numbers follow a downward revision for June.
- This now becomes the third consecutive month in which prices have declined 0.2 percent.
The positive side to the latest report is that year-on-year readings continue to be higher.
- San Francisco leads the country in home price appreciation with a 14.0 percent from the same time last year.
- Overall home prices for the country average out to be 5.0 percent higher than last year at this time.
As indicated earlier, construction spending is a strong point for the housing market kicking up by 0.7 percent in August.
- The year-on-year increase of 13.7 percent bodes well for the sector and seems to be picking up steam.
- Single-family homes increased a strong 0.7 percent and with the current level of new permits being issued the numbers are likely to remain strong in the coming months.
Finally, consumer confidence, which was expected to be declining due to the major losses suffered by investors in the stock market, jumped 3 points in September. There does not seem to be a real factor that you can put your finger on to explain the jump.
This week’s market moving reports are:
- Monday October 5th – ISM Non-Mfg Index
- Wednesday October 7th – MBA Mortgage Applications
- Thursday October 8th – First Time Jobless Claims & FOMC Minutes