Market Recap: Case-Shiller Home Price Index Slows, New Home Sales and Pending Home Sales Decline
Mortgage rates did not move significantly this week. Recent comments from Federal Reserve Chair Jerome Powell suggest that the Fed may be slowing down rate hikes, as interest rates reach a neutral range. Both new home sales and pending home sales declined in October, heading into the slower buying and selling season. The S&P CoreLogic Case-Shiller home price index has also started to slow, giving buyers a break from home price appreciation.
The Case-Shiller home price index appreciated 0.3% month-over-month and 5.1% year-over-year in September. Home price appreciation has started to slow around the country. Only Las Vegas posted double-digit annual gains. Only half of the metros appreciated month-over-month, two were unchanged, and eight declined, led by Seattle, down 1.3% month-over-month.
New home sales, or the sales of newly constructed homes, declined in October, down 8.9% month-over-month to a seasonally adjusted annual rate of 8.9%. Annually, sales are down 12%. Each region declined, led by the Midwest, down 22.1% and the Northeast, down 18.5%. The South was down 7.7% and the West is down 3.2%. As new home sales activity slows, prices are starting to fall. The median price for a new home is down 3.1% since October of last year.
The pending home sales index also slipped, down 2.6% month-over-month in October to a level of 104.8. Typically, it takes four to six weeks for a contract to close. Regionally, only the Northeast improved, up 0.7%. The Midwest declined 1.8%, the South declined 1.1%, and the West fell 8.9%.
Housing activity tends to slow down in the fall and winter months, with less shoppers. Data shows that inventory has actually increased in recent months, suggesting the market has grown less competitive. Buying a home in the winter could even be a chance to get a bargain, with sellers willing to negotiate or offer seller concessions, especially if they are on a timeline to sell.
Sources: CNBC, Econoday, MarketWatch, MarketWatch, Mortgage News Daily