Economy

Economic Data Roundup (12/28/2016)

12/28/16 12:00 PM

iStock_000009946822_Small.jpgDespite a recent uptick in mortgage rates, most incoming reports on the U.S. housing market have been encouraging. However, the forward-looking pending home sales index from the National Association of Realtors (NAR), released this morning, fell to the lowest level in nearly a year. Specifically, the contract signings index declined by 2.5 percent in November to 107.3, much worse than the 0.5 percent gain economists had expected and the weakest headline print since January. Moreover, the index is now down 0.4 percent on a year-over-year basis, the worst pace of annual growth since 2014. Regionally, sales edged higher in the Northeast (+0.6 percent) last month but fell in the South (-1.2 percent), the Midwest (-2.5 percent), and the West (-6.7 percent). Rapid gains in home prices related to supply constraints have weighed on sales for much of 2016, and the post-election spike in mortgage rates only adds another headwind for the market to deal with. NAR chief economist Lawrence Yun added that “Healthy local job markets amidst tight supply means many areas will remain competitive with prices on the rise. Those rushing to lock in a rate before they advance even higher will probably have few listings to choose from. Some buyers will have to expand the area of their home search or be forced to delay in order to save a little more money for their down payment.”

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Sources: Econoday, Bloomberg, ZH, NAR, FRBSL

Post author: Charles Couch