As we head into the long, Thanksgiving Day holiday week and weekend, yes technically the markets are open, but there is not much trading or market moving that gets done this week.
Fortunately, rates have fallen over the last week and continue to trend lower thanks to a lower 10-year Treasury yield, so that’s likely where we’ll stay for the remainder of November. (Of course, any unexpected news could change rates suddenly.)
According to chief economist Sam Khater of Freddie Mac, “the housing market continues to steadily gain momentum with rising home buyer demand and increased construction due to the strong job market, ebullient market sentiment and low mortgage rates.”
Last week we received a heaping plateful of very positive housing market news. To sum it up:
The housing market index – which measures home builder sentiment – fell back 1 point to 70 in November which, outside of October’s 71, is the best showing so far this year.
Upward acceleration for residential investment is the trend according to the latest numbers from housing starts and permits.
Favorable mortgage rates together with high levels of employment are giving housing, a sector that had been flat, a strong lift going into year end. Existing home sales rose 1.9 percent in October.
This week, there are only a couple important economic reports expected for release and they’re all crammed into Tuesday and Wednesday.
We start out tomorrow with a look at the New Home Sales numbers as well as two important home appreciation reports. New home sales pivoted higher beginning in June and extended their run to September, lifting the 3-month average to a 12-year high. The consensus for October’s annual sales rate of new homes is 707,000 versus 701,000 in September.
As for home appreciation, the Case-Shiller Home Price Index is expected to rise a tangible 0.3 percent in September. Yet year-on-year growth, at 2.0 percent in July and a 7-year low, is seen holding unchanged at that level in September.
The second look at third quarter gross domestic product (GDP) comes out on Wednesday and is expected to be unchanged from the first estimate.
After no change in August, the core PCE Index – the Fed’s favorite inflation indicator – is expected to rise 0.1 percent with the year-on-year core holding unchanged at 1.7 percent, which is well within the Fed’s comfort zone of 1-2 percent.
Before I sign off, I want to wish you and yours a Happy, Healthy Thanksgiving! We have so much to be thankful for and this year I’m thankful for you, for your business, your trust, and your friendship. Thanks for a wonderful 2019!