Market Recap: Home Prices, Pending Home Sales, and Consumer Spending Gain
Mortgage rates did not move much this week, trending slightly upward from last week. The S&P CoreLogic Case-Shiller home price index surged at a record pace, pending home sales increased, and consumer spending improved also.
The S&P CoreLogic Case-Shiller home price index measures change in home value in twenty cities across the country. The index is based on single-family homes with two or more sales transactions. In January, the index appreciated 0.9% month-over-month and 5.7% year-over-year. Home prices have hit a 31-month high, amidst rising demand and constrained inventory. The increase was driven by western metros like Denver and San Francisco and especially the Pacific Northwest Seattle and Portland.
Pending home sales improved 5.5% from January to February, pushing the sales index up to 112.3, the second-fastest pace in over a decade. Unseasonably warm weather and the potential for additional rate hikes may be driving some prospective homebuyers off the fence and into the market. Regional data showed particular strength in the Midwest, up 11.4%, while other regions saw lower gains.
Consumer spending was light in February, after strong fourth quarter gains, for a month-over-month increase of 0.1%. Personal income increases were stronger, up 0.4%. Core inflation reached 1.8%, still below the Federal Reserve’s targeted 2.0% range.
San Francisco Fed President John Williams made positive remarks about economic recovery, but stated that “housing still isn’t quite back.” Slowed construction and demand outpacing supply may be contributing factors.
Sources: Fox Business, Econoday, CNBC, MarketWatch, Bloomberg, Mortgage News Daily