Welcome to November! Fortunately, with the holiday season upon us, we have other fun things to focus on because the markets and mortgage rates continue to spook us, like picking up those mushy pumpkins after Halloween is over. Ick!
And this week will be no exception; with an uncommon combination of high-impact events, we’re likely to see a good dose of volatility in markets.
As for last week, we saw New Home Construction numbers continue to be a bright spot in housing despite high-interest rates. New Home Sales in September came in at an annual rate of 759,000, well above expectations and the best reading since February 2022. Looks like price concessions and rate buy-downs continue to be made by builders to help sell homes.
The first reading of 3rd quarter GDP (gross domestic product) showed the economy grew at the fastest rate in 2 years, 4.9 percent, fueled by consumer spending. This strong report may not influence the Fed’s decision to hike rates again as the report is backward-looking, and most economists expect the growth rate to slow sharply in the 4th Quarter. The good news? The economy is not close to a recession.
Speaking of the Fed, they have a meeting this week, and there is a great deal of interest and anticipation over what they’re going to do and, in turn, what they say about the future.
As for data out this week, jobs reports will take center stage – after the Fed meeting, that is. The ADP report on private sector job growth comes out on Wednesday morning. Forecasters see the number at 150,000. This would compare with September’s growth in private payrolls reported by the Bureau of Labor Statistics of 263,000, which was sharply higher than 177,000 in August. ADP’s number for September was 89,000, sharply lower than its August number of 180,000.
Then the main employment sector report comes out on Friday. A 183,000 rise in new jobs created is the call for October versus 336,000 in September which was much stronger than expected. Average hourly earnings in October are expected to rise 4.0 percent for the annual rate. October’s unemployment rate is expected to hold unchanged at 3.8 percent.
On the housing front, the latest numbers on home price appreciation revealed homes appreciated at a rate of 2.2 percent for the year, higher than expected 1.6 percent in the Case-Shiller Home Price Index. The FHFA House Price Index of mortgaged homes showed a 5.6 percent rate of appreciation.
