Market Recap: Case-Shiller HPI Increases and Consumer Confidence Soars
Markets were closed on Monday in observation of the Christmas Holiday. This week, the S&P CoreLogic Case-Shiller home price index hit a new high, pending home sales dropped, and consumer confidence is up again. Mortgage rates dropped slightly this week, after hitting a year-long high following the rate hike.
The S&P CoreLogic Case-Shiller home price index released its October reading this week, hitting a post-financial crisis high. The composite index measures the home value of twenty major cities across the country and increased by 5.1% on a year-over-year basis. David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices stated, “Home prices and the economy are both enjoying robust numbers.” The price appreciation is the result of tightening inventory and increasing demand.
Pending home sales dropped to a 10 month-low in November, down 2.5% to 107.3. This index measures signed contracts across the four regions of the US. Only the Northeast posted gains, up 0.6%, the South dropped 1.2%, the Midwest dropped 2.5%, and the West dropped 6.7%. The National Association of Realtors said in a statement that the “brisk upswing in mortgage rates and not enough inventory dispirited some would-be buyers.”
The consumer confidence survey continued to post optimistic results. Following the election, consumer confidence has surged and these gains carried on this month. The index is up 12.9 points since November to a level of 113.7, the highest reading since August 2001.
Since mortgage rates have increased, some prospective buyers may wait for home prices to fall before making a purchase. Over the past two weeks, rates have not fluctuated drastically, rising and falling a few hundredths of a percent from day to day. Next week will be another short week, with markets closed on Monday in observation of New Year’s Day.
Sources: Mortgage News Daily, MarketWatch, Reuters, CNBC