• CMG MORTGAGE, INC. NMLS #1820
  • Kimberly Allen
  • News
  • Market Forecast: Housing Market Index, Housing Starts and Building Permits, Existing Home Sales

Market Forecast: Housing Market Index, Housing Starts and Building Permits, Existing Home Sales

  • December 17, 2018

CMG Image

It will be a full week of housing news, heading into the end of the year.  The Federal Open Market Committee (FOMC) will have its final semiannual monetary policy meeting of the year on Tuesday and Wednesday, with a press conference scheduled for Wednesday afternoon.  Although the stock market has experienced some volatility in recent weeks, the Fed is still expected to raise interest rates following this meeting.  The National Association of Home Builders’ (NAHB) housing market sentiment index is scheduled to come out on Monday, followed by housing starts and building permits on Tuesday, and existing home sales on Wednesday.

The NAHB housing market sentiment index surveys builders on their perceptions of the current outlook for the housing market, expectations for the next six months, and buyer foot traffic.  The index has lost some steam in recent months, dropping slightly to a level of 60.  Current sales conditions fell to 87, expectations for the next six months dropped to 65, and buyer foot traffic declined to 45.  Any reading over 50 is considered positive.  Jeffries Financial Group economists commented, “housing is performing at a moderately high level, but it also appears to be settling into a plateau.” 

Housing starts track ground broken on residential projects and building permits track permits issued.  Housing starts and building permits are used to predict future housing market activity.  In October, housing starts improved 1.5% month-over-month to a seasonally adjusted annual rate of 1.228 million units.  Building permits dipped 0.6% month-over-month to a seasonally adjusted annual rate of 1.263 million units.

Existing home sales or resales make up the majority of real estate transactions.  After declining for several months, existing home sales turned around in October, up 1.4% month-over-month to a seasonally adjusted annual rate of 5.22 million.  Almost all regions were gainful.  National Association of Realtors chief economist, Lawrence Yun, noted, ““Gains in the Northeast, South and West – a reversal from last month’s steep decline or plateau in all regions – helped overall sales activity rise for the first time since March 2018.”

The FOMC will meet on Tuesday and Wednesday of this week, for their last meeting of 2018.  Based on text from November’s meeting minutes, forecasters fully expect the Fed to raise interest rates at the December meeting.  Specifically, Federal Reserve Chair Jerome Powell’s comment that interest rates were just below the neutral rate.  The pivotal meeting will also give economists a preview of what to expect from the Fed in 2019.   

 

Sources: CNBC, Econoday, HousingWire, MarketWatch, MarketWatch, MarketWatch, Mortgage News Daily

Kimberly Allen
Branch Manager
NMLS # 431903
Branch NMLS # 1666986


Kimberly Allen

PHONE: (415) 324-1000
kimallen@cmgfi.com

APPLY NOW
CMG Image
© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (www.nmlsconsumeraccess.org).