Weekly Economic Review: November Home Sales Disappoint, Home Price Growth Slows

Posted by Laine Smith on 12/27/15 2:07 PM

Topics: Economy

Existing home sales for November came in with a disappointing 10.5 percent fall to a much lower-than-expected annualized rate of 4.76 million. Due to weakness in existing home sales, the year-over-year rate is in the negative, at -3.8 percent, for the first time since September 2014.

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Image by Hywards via freedigitalphotos.net

The National Association of REALTORS, which compiles the report, is attributing the loss to delayed closing times after the introduction of new disclosure rules (TRID) in October. Total existing home sales decreased across all regions. The delays in November closings are likely to boost December totals, though, according to the NAR.

Home price growth slowed in October but is still up 0.5 percent, according to the FHFA’s House Price Index. Year-over-year, home prices have increased just over 6 percent. Location-wise, prices are strongest in the West and Mountain regions with New England and Mid-Atlantic regions seeing the weakest price gains year-over-year.

New home sales were positive in November with an increase of 4.3 percent, thanks to rising construction and a boosted new home supply. At the current sales rate, supply is at 5.7 months, which decreased slightly due to the amount of new homes purchased in November.

Last week in the economy:

  • The purchase index of MBA Mortgage Applications picked up traction following the Fed decision to increase the federal funds rate. Purchase applications increased by 4 percent and refinancing applications shot up 11 percent.
  • After a few weeks of increases, Initial Jobless Claims are moving toward a downward trend, falling 5,000 to a 267,000 level in the December 19 week. Decreases indicate positive labor market conditions.
  • Consumer Confidence remained high in the final week for holiday shopping, up 0.8 percent from the December flash to a higher-than-predicted December reading of 92.6. If the Consumer Confidence reading reaches the mid-93 range, it would be the strongest pace since June 2015.

What's on the economic calendar for the week of December 28, 2015:

Tuesday: S&P Case-Shiller Home Price Index & Consumer Confidence

Wednesday: MBA Mortgage Applications & Pending Home Sales Index

Thursday: Jobless Claims

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