Good News on Inflation…Finally!

There are lots of interesting data points to cover this week so let’s dive in. First, we saw mortgage rates resume their trend higher with the average rate for a 30-year fixed rate in Freddie Mac’s weekly survey surpassing 7 percent.

The housing market continues to evolve and change and we’re seeing home sales fall. However, according to the chief economist at the National Association of Realtors, home prices are not expected to fall much either this year or in 2023. Chief Economist Lawrence Yun says in the article that home prices are holding steady in many places because of limited inventory. 

He also says that housing inventory is about a quarter of what it was in 2008, during the Great Recession. He expected home sales to continue their decline in 2023 but a strong rebound in 2024.

If you’d like to discuss how you can take advantage of the opportunities presented by this economic climate, higher rates than in the recent past, and pesky inflation, let’s talk. There are always opportunities if you know where to look! 

As for what else I’m watching…

We got some great news for wholesale inflation, it looks to be leveling off. Producer prices were expected to rise 0.5 percent on the month in October versus September’s 0.4 percent increase but came in at a much cooler 0.2 percent increase. As for the year-over-year rate, we were expecting 5.6, but actuals came in at 5.4 percent, an improvement.

The report on Retail Sales comes out this week, which is important as we head into the holiday shopping season. Sales have been flat, unchanged in September with October, however, expected to post a sharp 1.0 percent gain overall but reflecting narrow gains in vehicles and gasoline.

And in the housing market, the report on the sentiment of the nation’s home builders, month in and month out, has been spiraling below expectations including October’s 38 which was 8 points under September and 6 points below predictions. November’s consensus is a 2-point loss to 36.

New Housing Starts have been swinging back and forth along a lower path. After September’s much lower-than-expected 1.44 million annualized rate, Starts in October are expected to slip further to 1.41 million. Permits, at 1.56 million in September, are expected October to slow to 1.52 million.

On Friday we get a look at Existing Home Sales numbers. Having contracted the past eight months in a row, existing home sales in October are expected to contract further, by 1.5 percent to a 4.36 million annualized rate versus September’s 4.71 million.

I’ll be keeping an eye on all of it and will report back next week!