Market Forecast: Case-Shiller Home Price Index, Pending Home Sales and GDP
Mortgage rates stayed low last week, trending slightly downward according to Mortgage News Daily. Housing market activity picked up with gains in both existing home sales and new home sales. This week, the S&P CoreLogic Case-Shiller home price index comes out Tuesday, the pending home sales index comes out Wednesday, and on Thursday we get the third estimate for first-quarter Gross Domestic Product (GDP).
The Case-Shiller home price index measures the rate of change in home value across 20 major metropolitan areas. Home prices have been on an appreciation trend, as lack of available housing inventory pushes prices up. In March, the 20-city index was up 0.9% month-over-month and 5.9% year-over-year.
The pending home sales index tracks contracts that are signed but not yet closed. A typical home sale will take four-to-six weeks to close. Pending home sales are used to forecast future economic activity. In April, pending home sales declined 1.3% month-over-month to a level of 109.8.
GDP is the most comprehensive national economic scorecard. For the first quarter’s third estimate, economists expect the number to be unchanged at a 1.2% rate of growth. First quarter growth has been weak. Consumer spending makes up two-thirds of GDP, and although consumer confidence surveys are surging, consumers have yet to act on this confidence.
Mortgage rates hovered historic lows last week, even after the rate hike earlier in the month. Federal interest rate hikes impact all types of interest rates, but the effect can be gradual.
Sources: Bloomberg, MarketWatch, Mortgage News Daily