Pending Home Sales and Home Prices Rise

Week of December 30, 2024 in Review

There were updates on Pending Home Sales, home price appreciation and unemployment claims during an otherwise quiet week where the markets were closed on Wednesday for New Year’s Day. Read on for these headlines and more.

• Pending Home Sales Rise for Fourth Straight Month
• Another Record High for Home Prices
• Unemployment Filings Likely Skewed by Holidays
• Family Hack of the Week
• What to Look for This Week
• Technical Picture

Pending Home Sales Rise for Fourth Straight Month

Pending Home Sales, which are signed contracts on existing homes, rose 2.2% from October to November per the National Association of REALTORS® (NAR). The index reached its highest level since February 2023 as sales were also 6.9% higher than they were a year earlier.

What’s the bottom line? NAR’s Chief Economist, Lawrence Yun, noted that “consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory.”

Yun added that, “Mortgage rates have averaged above 6% for the past 24 months. Buyers are no longer waiting for or expecting mortgage rates to fall substantially. Furthermore, buyers are in a better position to negotiate as the market shifts away from a seller’s market.”

Another Record High for Home Prices

The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices nationwide rose 0.3% from September to October after seasonal adjustment, breaking the previous month’s all-time high. Home values in October were also 3.6% higher than a year earlier, following a 3.9% gain in September.

Case-Shiller’s 10-city (+4.8% YoY) and 20-city (+4.2% YoY) indices reported even higher growth than the nationwide figures, showing that big cities are outperforming the rest of the nation.

The Federal Housing Finance Agency’s (FHFA) House Price Index also showed that home prices rose a seasonally adjusted 0.4% from September to October, and they were 4.5% higher when compared to the same time last year. FHFA’s Index differs from Case-Shiller’s because it does not include cash buyers or jumbo loans, only loans financed with conforming mortgages.

What’s the bottom line? Home prices are continuing to appreciate and though the pace has been moderating, homeownership continues to provide a significant wealth creation opportunity.

In fact, S&P DJI’s Head of Commodities, Brian D. Luke, noted that Case-Shiller’s National Index “hit its seventeenth consecutive all-time high” while Dr. Anju Vajja, Deputy Director at FHFA, explained that “home prices continued to grow at a steady rate.”  

Unemployment Filings Likely Skewed by Holidays

Initial Jobless Claims fell by 9,000 in the latest week, with 211,000 people filing for unemployment benefits for the first time. Continuing Claims also dropped by 52,000, as 1.844 million people are still receiving benefits after filing their initial claim.

What’s the bottom line? While Initial Jobless Claims fell to their lowest level since April, the measured week included Christmas, and this could have impacted the data as people often put off filing if they’re traveling or busy during the holidays.

Continuing Claims measured the prior week just before Christmas, so they may have been less impacted by the holiday. However, they have now topped 1.8 million since the start of June, which is 30 consecutive weeks. This elevated number suggests people are collecting benefits for longer periods of time as new job opportunities have become harder to find.

Family Hack of the Week

It’s National Soup Month and this Garden Vegetable Soup courtesy of the Food Network is perfect for kicking the year off right. Yields 6 to 8 servings.

In a large, heavy-bottomed stockpot, heat 4 tablespoons olive oil over medium low heat. Once hot, add 2 cups chopped leeks (white part only), 2 tablespoons finely minced garlic and a pinch of kosher salt. Sweat until they begin to soften, about 7 to 8 minutes. Add 2 cups carrots (peeled and chopped into rounds), 2 cups potatoes (peeled and diced), and 2 cups green beans (cut into 3/4-inch pieces) and cook for 4 to 5 more minutes, stirring occasionally.

Add 2 quarts chicken or vegetable broth, increase heat to high and bring to a simmer. Once simmering, add 4 cups tomatoes (peeled, seeded and chopped), 2 ear corns (kernels removed), and 1/2 teaspoon freshly ground black pepper.

Reduce heat to low, cover and cook until vegetables are fork tender, around 25 to 30 minutes. Remove from heat, add 1/4 cup packed, chopped fresh parsley and 1 to 2 teaspoons of lemon juice. Season to taste and enjoy with your favorite crusty bread.  

What to Look for This Week

The first full week of January kicks off with a full slate of labor sector reports. Look for updates on job openings Tuesday, private payrolls Wednesday, unemployment claims Thursday, and nonfarm payrolls and the unemployment rate Friday.

Technical Picture

Mortgage Bonds broke beneath an important support level at 100.43 on Friday. The next floor of support is at 100.17. The 10-year has been testing important overhead resistance at 4.588%. If this level is broken, the next ceiling is at 4.636%.