According to the Conference Board This Week in Real Estate consumer confidence in October realized a four point increase following three months of declines. In other news, Fannie Mae released a forecast on Friday that predicts year-over-year 2021 home price appreciation will surge 17% “smashing” last year’s all-time high of 11%. Below are a few newsworthy events from the final week of October that influence our business:
Pending Home Sales Dip 2.3% in September. Pending home sales dipped in September, retreating slightly following a previous month of growth, according to the National Association of Realtors. Each of the four major U.S. regions saw contract activity decline month-over-month and year-over-year. The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, decreased 2.3% to 116.7 in September. Year-over-year, signings decreased 8.0%. “Contract transactions slowed a bit in September and are showing signs of a calmer home price trend, as the market is running comfortably ahead of pre-pandemic activity,” said Lawrence Yun, NAR’s chief economist. “It’s worth noting that there will be less inventory until the end of the year compared to the summer months, which happens nearly every year. Once all home sale data has been tabulated by year’s end, NAR expects home sales to have risen by 6.4% in 2021; and due to higher anticipated mortgage rates, NAR projects sales to then decline by 1.7% in 2022.
U.S. Home Price Gains Are on Pace to Smash Record in 2021. Home-price gains in 2021 are on pace to smash last year’s all-time high after record-low mortgage rates fueled bidding wars across the U.S., Fannie Mae said in a forecast on Friday. Home prices probably will surge 17% this year, beating the record gain of 11% set in 2020 that surpassed the prior peak of 10% seen at the height of the real estate boom that petered out in mid-2006, the largest U.S. mortgage securitizer said. Prices for homes began spiking last year after the Federal Reserve stepped into the bond markets in March 2020 to purchase Treasuries and mortgage-backed securities to support the economy during the pandemic and prevent the type of credit crunch that crashed the U.S. financial system in 2008. “We believe strong price appreciation is likely to continue in coming months,” Fannie Mae economists said in commentary released on Friday with the forecast. Next year, home-price appreciation is expected to slow but not fall of a cliff, according to the Fannie Mae forecast. The sale price of U.S. homes probably will gain 7.4% in 2022, Fannie Mae said.
Consumer Confidence Bounces Back in October Following Three Months of Declines. Consumer confidence rebounded in October, following three months of declines, the Conference Board reported on Tuesday. The overall index rose 4 points to 113.8, up from a revised 109.8 in September, and above consensus estimates of 108.5. “Consumer confidence improved in October, reversing a three-month downward trend as concerns about the spread of the Delta variant eased,” said Lynn Franco, senior director of economic indicators at the board. “While short-term inflation concerns rose to a 13-year high, the impact on confidence was muted. The proportion of consumers planning to purchase homes, automobiles, and major appliances all increased in October – a sign that consumer spending will continue to support economic growth through the final months of 2021.
Did you know every home listed for sale with Berkshire Hathaway HomeServices Northwest Real Estate and Berkshire Hathaway HomeServices Real Estate Professionals are eligible to receive no-obligation home warranty coverage from American Home Shield or 2-10 Home Warranty the first six months the home is listed with our company?