Posted On October 24, 2016
Mortgage rates show little change since Friday, following the trend of steady rates. After some discussion of improving the Gross Domestic Product in last week’s presidential debate, we are looking ahead to find out where it stands this Friday. This economic scorecard will shed light not only on interest rates but the state of the economy in its entirety. We are also anticipating the release of the Case-Shiller home price index and the pending home sales index.
The Case-Shiller home price index tracks the value of real estate in 20 metropolitan regions across the country. We saw sustained growth last month, but less than expected. The 20-city composite index rose 5% on a year-over-year basis, with Portland, Seattle, and Denver seeing the largest gains.
Pending home sales dropped 2.4% from August to September, continuing three months of declines. The National Association of Realtors’ chief economist, Lawrence Yun, attributed the declining metrics to the observation that “prospective home buyers appear to be either wavering at the steeper home prices pushed up by inventory shortages or disheartened by the competition for the miniscule number of affordable listings.”
The Gross Domestic Product (GDP) is the most inclusive measure of economic activity. In Wednesday’s debate, both candidates posited plans to grow the GDP. In Q2 of 2016, the GDP posted gains up 1.4%. Healthy GDP earnings bode well for financial markets. Due to last month’s gains, economists have positive projections for this quarter.
After a month of rising mortgage rates, it seems as though rates are settling down. We will have a better idea of what direction we are headed in pending this week’s reports.