Market Forecast: Case-Shiller Home Price Index, New Home Sales, Pending Home Sales Index
It will be a short week for economic news, with markets closed on Thursday in observance of the Thanksgiving holiday and none scheduled on Friday. In housing news, the S&P CoreLogic Case-Shiller home price index and the new home sales report are both scheduled for Tuesday. The pending home sales index comes out on Wednesday.
The Case-Shiller home price index tracks changes in the value of homes involved in two or more sales transactions across twenty major metropolitan areas throughout the country. Home price appreciation has mostly slowed down this year, after several years of accelerated gains. In August, the 20-city index actually depreciated 0.2% month-over-month. Annually, the index was up 2.0%. The rate of appreciation overall has stabilized. President of the Greater Las Vegas Association of Realtors, Janet Carpenter, commented to CNBC, “When you look at how gradually home prices have been going up lately, the rate of appreciation is more like what we considered to be normal for many years.”
The new home sales report tracks changes in the sales of newly constructed homes and accounts for approximately 10% of all real estate transactions. New home sales declined in September, down 0.7% month-over-month to a seasonally adjusted annual rate of 701,000 units. However, sales were up 15.5% year-over-year. The biggest challenge new home buyers are facing is lack of inventory.
The pending home sales index tracks home sales that are under contract but not yet closed. Typically, it takes four to six weeks for a contract to close. In September, pending home sales increased 1.5% month-over-month and 3.9% year-over-year. September’s gainful numbers suggest strong housing activity moving into the end of the year.
Lower mortgage rates are motivating home buyers, but many busy markets are still dealing with lack of available homes for sale. If you are looking to buy a home, make sure you get preapproved for mortgage financing before you start shopping. Mortgage preapproval means you’ve already started the mortgage financing process and can close your loan faster, making your offer more attractive to the seller. If you have any questions about getting preapproved for a new purchase or refinance, please let me know.
Sources: CNBC, CNBC, Econoday, MarketWatch, Mortgage News Daily, Reuters