• Lourdes Best
  • News
  • Market Forecast: FOMC Meeting, Pending Home Sales, and Case-Shiller Home Price Index

Market Forecast: FOMC Meeting, Pending Home Sales, and Case-Shiller Home Price Index

  • July 30, 2018

The Federal Open Market Committee (FOMC) will meet Tuesday and Wednesday of this week and release an announcement following the meeting on Wednesday afternoon.  The Fed is not likely to raise interest rates following this meeting, the market expects the next rate hike to take place later this year.  The National Association of Realtors (NAR) will release its pending home sales index on Monday.  The S&P CoreLogic Case-Shiller home price index comes out on Tuesday. 

The pending home sales index tracks changes in the number of homes that are under contract but not yet closed.  Typically, it takes four to six weeks for a contract to close.  Pending home sales are used to predict future housing market activity.  In May, pending home sales declined 0.5% month-over-month and 2.2% year-over-year marking the fifth straight month of annual declines.  The NAR attributed the decline to a low supply of for-sale inventory.  At the current sales pace, it would take approximately 4.1 months to exhaust available inventory.  A balanced market typically has about a six month supply. 

The Case-Shiller home price index is based on the changes in the value of homes involved in two or more sales transactions across twenty major metropolitan areas throughout the country.  Home prices have been on a steady trend of appreciation as limited for sale inventory pushes prices higher.  In April, the index appreciated 0.3% month-over-month and 6.4% year-over-year.  Gains were driven by Seattle, San Francisco, and Las Vegas each posting double-digit annual increases.  Only New York City saw a month-over-month decline of 0.6%, possibly an impact of new tax laws. 

When an FOMC meeting is not followed by a press conference or release of new economic and policy projections, like the “blue dots,” it is unlikely to be a market-moving announcement.  Some issues the Fed is expected to address at this meeting include the relatively flat yield curve, international trade policy, lack of wage growth with the increase in actual labor market participation, and global growth outside of the US.

More construction activity is needed to replenish housing inventory, and home builders’ outlook is relatively positive.  July’s National Association of Home Builders’ housing market sentiment index read 68, and any reading above 50 is considered positive.  Home buyers actively looking for a new home can improve their chances of getting an offer accepted by partnering with the right mortgage lender.  Transaction time is critical in today’s busy housing market. 


Sources: Bloomberg, CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily

Lourdes Best
Loan Officer
NMLS # 341095
Branch NMLS # 1647193

Lourdes Best

PHONE: (910) 684-4924

CMG Image
© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (www.nmlsconsumeraccess.org).