Sales of new U.S. homes edged up in October, reflecting stabilizing demand even as builders face supply-chain disruptions and buyers grapple with rising prices.
Purchases of new single-family homes increased 0.4% to a 745,000 annualized pace following a downwardly revised 742,000 in September, government data showed Wednesday. The median estimate in a Bloomberg survey of economists called for a 800,000 rate.
The report, produced by the U.S. Census Bureau and the Department of Housing and Urban Development, showed the median sales price of a new home jumped 18% from a year earlier to a record $407,700.
“Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” said Lawrence Yun, NAR’s chief economist.
The S&P Case-Shiller 20-City Home Price Index rose 19.1% from September 2020 to September 2021, up 0.8% monthly from August to September. The National Index jumped 19.5% year over year and rose 1% monthly. Craig J. Lazzara, Managing Director at S&P DJI said, “Housing prices continued to show remarkable strength in September, though the pace of price increases declined slightly.”
The FHFA today announced the conforming loan limits (CLL) for mortgages to be acquired by Fannie Mae and Freddie Mac in 2022. In most of the U.S., the 2022 CLL for one-unit properties will be $647,200, an increase of $98,950 from $548,250 in 2021.
Volatility continues in the market after Federal Reserve Chairman Jerome Powell’s comments on inflation. Powell says the risk of higher inflation has increased, higher prices are generally related to supply-demand issues. He says it’s a good time to retire “transitory” for inflation.
Because of those comments, here’s what happened in the market: Past midday, stocks plunge on Powell’s hawkish rhetoric. Dow -500 points. Mortgage Bonds flat, well off worst levels. 10-yr yield 1.44%.
Consumer Confidence fell in November to 109.5 from the 111.6 seen in October which was an increase from September. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell to 142.5 from 145.5 last month. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, declined to 87.6 from 89.0. Lynn Franco, Senior Director of Economic Indicators at The Conference Board said, “The Conference Board expects this to be a good holiday season for retailers and confidence levels suggest the economic expansion will continue into early 2022. However, both confidence and spending will likely face headwinds from rising prices and a potential resurgence of COVID-19 in the coming months.”
We will see how all of this plays out the rest of the year.
For questions or concerns, reach out to us today: email@example.com.