Headlines surrounding impeachment, trade, Brexit, and Fedspeak continue to hold investor and market attention as we finish out another week. As we start off a new quarter next week, focus will shift back to data with the September jobs report on Friday.
Home Price Indices
The Case-Shiller 20 City Home Price Index in July saw a gain of +.02%, down from a prior +.06%. YoY, the index is up by +2%, down from +2.16%, and now at its slowest growth rate since August 2012. The report noted that "prices continued to gain, but at ever more modest rates," but "fundamentals indicate renewed demand." The FHFA House Price Index in July rose by +.4% vs. a prior +.2%. YoY gains for the 9 divisions measured ranged from 3.6% in the Mid-Atlantic to 7.6% in the Mountain. Nationally, the YoY average is at 5%.
The Conference Board Consumer Confidence Survey in September fell to 125.1 from a previous 134.2. Expectations were for a 133 print, so the result is well below and now the lowest level since March. Within the headline, the present situation index fell to 169 from 176, expectations dropped to 85.8 from 106.4. The report comments "the escalation of trade and tariff tensions in late August appears to have rattled the consumer."
New Homes Sales
August New Home Sales rose by +7.1% to a 713k unit selling rate, while July sales were revised higher to a 666k rate from an initial 635k. The August inventory of 326k homes for sale is down from the 330k back in July, while the months’ supply has fallen to 5.5 months from 5.9. The median new house price rose +2.2% to $328,400 in August, from a year ago. By region, sales increased in both the West and South, by +16.5% and +6%, respectively. Sales fell by -5.9% in the Northeast and fell -3% in the Midwest.
August Personal Income rose +.4%, while spending rose by +.1%. YoY now, income is up by +4.6%, spending up +2.3%. The strength of the consumer has sustained through Q2 as evidenced by the better GDP results this week. However, it is unlikely that we see that strength continue into Q3 with growth rates slightly lower.
Pending Homes Sales
Pending Homes Sales for August increased by +1.6% after seeing a decline back in July. The highest gain occurred out West with a +3.1% rise, then +1.4% in the South, +.7% in the Northeast, and +.6% in the Midwest. “The notable sales slump in the West region over recent years appears to be over,” Lawrence Yun, chief economist for the National Association of Realtors, said in the report. He also noted, “Rising demand will reaccelerate home price appreciation in the absence of more supply.”