Markets in a Minute, Housing Market News, November 27, 2023

This week’s financial and housing market activity update…

The Economy

• In October, the durable goods orders experienced a sharper decline than anticipated, influenced by diminished demand for auto parts due to the UAW strikes.
• Despite lower than expected durable goods orders, November saw a marginal improvement in consumer sentiment, albeit marking the fourth consecutive month of decline amid lingering inflation concerns.
• On a positive note, jobless claims reached a five-month low last week, signaling a resilient job market even in the face of a gradual economic cooldown.

Housing Industry Updates

• The housing market faced headwinds in October, as existing home sales reached a 13-year low, down 14.6% from the previous year. However, median home prices bucked the trend, rising by 3.4% to reach $391,800.
• The supply of existing homes for sale expanded 1.8% between September and October, reaching 1.15 million by the end of last month. This equates to a 3.6 months’ supply based on the current rate of monthly home sales [nar.realtor].
• New home construction ratcheted up unexpectedly in October, with builders continuing to benefit from the constraints of the resale market. Concurrently, mortgage demand surged to a six-week high, spurred by a dip in interest rates, resulting in a 4% increase in purchase applications for the week.
• Nearly 40% of recent homebuyers under 30 used family gifts or inheritances for their down payment, according to Redfin data, highlighting the importance of family support.

Inflation Pressures Ease in October

October brought a pause in the upward trajectory of prices, as the Consumer Price Index (CPI) reported zero growth from September. This news triggered an immediate drop in mortgage interest rates.

The significance of this lower inflation lies in its potential impact on the Federal Reserve’s future decisions. While some analysts project a halt in rate hikes, the annual inflation was still up 3.2% as of October’s end, compared to last year. Consequently, market volatility is expected as investors speculate on the Fed’s next moves.

If you’ve been waiting for a better moment to buy, refinance, or tap into your home’s equity, this is a good time to explore your options.  Please reach out to Thompson Kane’s lending experts any time with your questions. We’re here to assist you in navigating the current market landscape!