Market Forecast: Pending Home Sales, Case-Shiller Home Price Index, Construction Spending
It will be another short week ahead with markets closed on Wednesday in observance of the New Year’s Day holiday. There are several important housing reports scheduled for release including the pending home sales index, the S&P CoreLogic Case-Shiller home price index, and US construction spending.
The pending home sales index tracks homes that are under contract but not yet closed. Typically, it takes four to six weeks for a contract to close. The pending home sales index is used to predict future housing market activity like existing home sales. Pending home sales declined 1.7% month-over-month and increased 4.4% year-over-year. The monthly drop was likely due to a shortage of available homes for sale.
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 slowed down somewhat in recent months, with some markets even seeing month-over-month declines. In September, the index appreciated 0.4% month-over-month and 2.1% year-over-year. The annual appreciation rate increased slightly to a level of 3.2%.
The US construction spending report tracks total spending on private and public construction projects. Overall construction spending declined 0.8% month-over-month and 1.7% year-over-year in October to a total of $1.087 trillion. Residential construction specifically declined 0.9% month-over-month and 0.5% year-over-year. Still, home builder sentiment remains positive.
Lower mortgage rates continue to motivate home buyers looking to buy and homeowners looking to refinance. The biggest challenge today’s buyers face is limited for sale inventory. Strong buyer demand will likely spur more new home construction and help replenish inventory.
Sources: CNBC, CNBC, Econoday, HousingWire, MarketWatch, MarketWatch, Mortgage News Daily