Discussing pending home sales, economic confidence, the Philly Fed State Coincident Index and the latest on unemployment claims!
Pending Home Sales Increase
Pending home sales were mostly unmoved in November, but did squeak out a minor gain both on a monthly and annualized basis, according to the National Association of Realtors®. The Pending Home Sales Index rose 0.2% in November from October. With last month’s modest increase, the index remains at its highest reading since June and is now 0.8% above a year ago.
Lawrence Yun, NAR chief economist, said:
The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear. The strengthening economy, and expectation that more millennials will want to buy, serve as promising signs for solid homebuying demand next year, while also putting additional pressure on inventory levels and affordability.
A good sign to see an increase in the number of homes going under contract. Remember that NAR is talking about the entire country. Also, this is the number of homes that went under contract and NOT the number of homes that were sold.
The low number of homes for sale is STILL an issue but we should be happy that home sales are this strong. That being said, the latest report from NAR on existing home sales was very positive:
This is again national and not local real estate market information. Buyers and sellers must always rely upon local market information and expertise when making decisions.
The Conference Board Reported:
The Conference Board Consumer Confidence Index® decreased in December, following a modest improvement in November. The Index now stands at 122.1 (1985=100), down from 128.6 in November. The Present Situation Index increased from 154.9 to 156.6, while the Expectations Index declined from 111.0 last month to 99.1 this month.
Lynn Franco, Director of Economic Indicators at The Conference Board said:
Consumer confidence retreated in December after reaching a 17-year high in November. The decline in confidence was fueled by a somewhat less optimistic outlook for business and job prospects in the coming months. Consumers’ assessment of current conditions, however, improved moderately. Despite the decline in confidence, consumers’ expectations remain at historically strong levels, suggesting economic growth will continue well into 2018.
Gallup Reported Economic Confidence Increased:
Americans’ confidence in the economy improved slightly in the final days leading up to Christmas, with Gallup’s U.S. Economic Confidence Index registering +8 for the week ending Dec. 24. This is up from +4 the week prior but similar to the +7 recorded for the same pre-Christmas week in 2016.
Americans’ confidence in the economy generally has been in positive territory since the 2016 presidential election. Before then, economic confidence scores were negative for the vast majority of weekly readings from January 2008 through early November 2016.
For the week ending Dec. 24, 39% of Americans rated current economic conditions as “excellent” or “good,” while 23% described economic conditions as “poor.” Meanwhile, Americans were split on the direction of the economy’s future, with 47% saying the economy is “getting better” and 48% saying it is “getting worse.”
Americans’ confidence in the economy remains slightly positive, much as it has for most of 2017 — a year that saw massive gains in U.S. stocks and the national unemployment rate fall to a nearly 17-year low.
Though Americans remain mixed in their views of the economy’s future, their economic outlook may become more positive in 2018 after a full year of sustained economic improvements. And although their views of the new tax reform bill were negative before its passage, that may change once Americans see the tax cuts most are expected to receive in 2018.
Somewhat mixed results but you must decide what is best for you based on facts and not what other people think or feel.
Philly Fed State Coincident Indexes Increased in 35 States in November
From the Philadelphia Fed:
The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for November 2017. Over the past three months, the indexes increased in 43 states and decreased in seven, for a three-month diffusion index of 72. In the past month, the indexes increased in 35 states, decreased in 11, and remained stable in four, for a one-month diffusion index of 48. For comparison purposes, the Philadelphia Fed has also developed a similar coincident index for the entire United States. The Philadelphia Fed’s U.S. index rose 0.7 percent over the past three months and 0.2 percent in November.
A good way to see what is happening with the economy as the Philly Fed’s Coincident Index combines 4 state level indicators to summarize economic conditions in one statistic. With the high number of states increasing, it is a pretty positive sign for the economy.
Unemployment Claims Unchanged
In the week ending December 23, the advance figure for seasonally adjusted initial claims was 245,000, unchanged from the previous week’s unrevised level of 245,000. The 4-week moving average was 237,750, an increase of 1,750 from the previous week’s unrevised average of 236,000.
While not great, it is good since claims were below 250,000.
That is it for today! Be sure to check back as I am going to cover mortgage rates in my next post. And if you enjoyed this post, please hit those share buttons!