Market Forecast: Case-Shiller Home Price Index, Pending Home Sales Index, US Construction Spending
Mortgage rates did not move much last week, and continue to hover year-long lows. This week, the S&P CoreLogic Case-Shiller home price index comes out on Tuesday. The pending home sales index comes out Thursday and US construction spending will be released Friday.
The Case-Shiller home price index tracks home price appreciation across 20 major metropolitan areas throughout the United States. In May, the index appreciated just 0.1% month-over-month but 5.7% year-over-year. Limited housing inventory is driving home prices up as buyers act quickly to make offers on available homes.
The National Association of Realtors’ (NAR) pending home sales index tracks the number of contracts signed that have not yet closed. Typically, it takes four-to-six weeks for a contracted sale to close. The pending home sales index is used to predict future housing market activity like new home sales. In June, the pending home sales index improved 1.5% month-over-month to a level of 110.2.
Construction spending counts the total amount spent on residential, non-residential, and public projects. All construction activity triggers economic momentum, but the housing market specifically watches residential construction. In June, total US construction spending dropped 1.3% month-over-month and improved 1.6% year-over-year.
Home prices have steadily increased as construction activity has failed to meet surging demand for housing. Homes are selling at record paces as buyers look to lock low rates before further rate hikes.
Sources: Bloomberg, MarketWatch, Mortgage News Daily