Market Forecast: Case-Shiller Home Price Index, FHFA House Price Index, Pending Home Sales Index
Last week, the Federal Open Market Committee (FOMC) voted to cut the Federal benchmark interest rate, and mortgage rates responded by trending lower. This week, the S&P CoreLogic Case-Shiller home price index and the Federal Housing Finance Agency (FHFA) house price index are both scheduled for release on Tuesday. The pending home sales index will come out on Thursday.
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 been slowing down around the country in recent months. In June, the Case-Shiller home price index appreciated just 2.1% year-over-year, down substantially from June 2018’s 6.3% annual increase. Miami, New York, and Seattle even saw month-over-month decreases.
The FHFA house price index tracks changes in the value of homes financed through conventional mortgages securitized by GSEs. This data set is smaller than that of the Case-Shiller home price index, but still used to gauge home price trends. In June, the FHFA house price index appreciated 0.2% month-over-month and 4.8% year-over-year.
The pending home sales index track the number of homes that are under contract but not yet closed. In July, pending home sales declined 2.5% month-over-month. Lower mortgage rates have spurred refinance activity, but some home buyers are still facing fewer homes for sale in many markets.
The greatest challenge home buyers have faced in recent years has been lack of available homes for sale. Last week the National Association of Home Builders’ (NAHB) housing market index improved and housing starts and building permits each jumped, suggesting home building activity is picking up. Mortgage rates will likely stay low through the end of the year.
Sources: CNBC, CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily