Market Forecast: Housing Market Index, Housing Starts and Building Permits, and Existing Home Sales
Last week, the Federal Open Market Committee (FOMC) voted to leave interest rates unchanged, and mortgage rates reacted by not moving significantly. There is a full week of housing news ahead with the National Association of Home Builders (NAHB) housing market index, housing starts and building permits, and existing home sales all scheduled for release.
The NAHB housing market index is based on a survey of home builders’ perceptions on current sales conditions, sales expectations for the next six months, and buyer foot traffic. Any reading above 50 is considered positive. In November, the index read 60. Current sales conditions dropped slightly to 76 while sales expectations for the next six months increased to 77. Buyer foot traffic slipped slightly to 53. NAHB chief economist, Robert Dietz, commented on the positive numbers, “we have seen substantial year-over-year improvement following the housing affordability crunch of late 2018.”
Housing starts track ground broken on residential projects and building permits track permits issued. In October, housing starts increased 3.8% month-over-month and 8.5% year-over-year to a level of 1.314 million units. Building permits are also up 5% month-over-month and 14.1% year-over-year to a level of 1.461 million. Investment in single-family home building specifically has picked up.
Existing home sales or resales track month-to-month changes in the sales in previously constructed homes. In October, existing home sales increased 1.9% month-over-month to a seasonally adjusted annual rate of 5.46 million. Sales picked up specifically in the higher end of the market.
Low mortgage rates are continuing to trigger mortgage activity both for home buyers and homeowners looking to refinance. If you’re interested in taking advantage of today’s low mortgage rates, let me know.
Sources: CNBC, CNBC, Econoday, MarketWatch, Mortgage News Daily, The Wall Street Journal