By Ryan Casey Stephens, FPQP®
Special Contributor
Are you enjoying the pleasant mornings with temperatures in the 60s? You aren’t alone, and the cool air here is certainly a welcome change.
I just returned from hiking and cycling in Colorado where fall’s arrival is apparent – lows in the 30s, rainy afternoons, and golden aspens on every mountainside.
Experts anticipate change in the economic season too. Strong reports through the summer were evidence of the stubborn nature of inflation, but the effects of the Fed’s aggressive rate hikes should soon begin to show in the data. Is it possible those impacts have already appeared?
Let’s take a look in this week’s Three Things to Know.
Home Sales Slow
Last week’s Pending Home Sales report revealed a third month of decline for new contracts on existing homes, down 24 percent from last year. A negative number was also expected for contracts on new builds but surprised us with a 29 percent increase from July to August. That number is flat compared to last year though, so the net effect is negative for total homes under contract nationwide.
Focus on The Bigger Price Picture
Last week also brought the results of the FHFA House price index and the Case-Shiller price index (the industry gold standard). Home prices fell .3 percent and .6 percent respectively from June to July, but the bigger news was appreciation compared with last year – 15.8 percent and 16.2 percent respectively. Home value gains are slowing but remain strong year-over-year.
Workers Take Center Stage
Two reports will dominate the second half of this week: the ADP new employment report and jobless claims. We’ll gain insight on payrolls and unemployment, two figures that are expected to slip as months of Fed rate hikes begin to grip. Recent reports remained strong, but weaker numbers this week might give support to floundering mortgage bonds, perhaps helping interest rates ease.
Ryan Casey Stephens FPQP® is a mortgage banker with Watermark Capital. You can reach him at [email protected].
