Market Forecast: Steady Rates, Case-Shiller Home Price Index, and Pending Home Sales
Last week, mortgage rates did not change much, dropping a few hundredths of a percent according to Mortgage News Daily. This week’s announcements include the S&P Corelogic Case-Shiller home price index and the consumer confidence survey today and pending home sales tomorrow.
The Case-Shiller HPI measures the monthly changes in home value in 20 major metropolitan regions across the country. Last month, the index improved by a modest 0.1% on a month-over-month basis and a more substantial 5.1% increase on a year-over-year basis. Home values rise based on how much equity households hold. Ability to spend and secure loans will also lead to rising home values.
The pending home sales index is used to forecast upcoming real estate activity. Last month the index improved slightly at 0.1%. This year-end report is especially important in determining where the housing market is heading into 2017.
The economy depends on consumers’ contributions so the consumer confidence level is especially important in predicting any changes on the horizon. The survey measures the six month outlook on metrics like business conditions, employment, and income.
As the end of the year encroaches, economists are forecasting the state of the housing market for 2017. Aside from rising rates, most real estate professionals expect to see an increase in new home purchases and a decline in refinances as more homebuyers enter the market and those who were looking to refinance completed the process locking low rates in 2016.
Sources: Mortgage News Daily, MarketWatch