Housing Data Delivers an Upside Surprise

Pending Home Sales and home price gains came in stronger than expected, while unemployment claims fell below forecasts. Here’s a look at the key highlights.

·      Pending Home Sales Jump in November

·      Home Prices Show Signs of Renewed Momentum

·      Unemployment Claims Dip on Seasonal and Timing Effects

Pending Home Sales Jump in November

Pending Home Sales rose 3.3% from October to November, beating expectations and reaching their strongest level in nearly three years, according to the National Association of REALTORS® (NAR). Contract signings on existing homes were also up 2.6% compared to a year earlier.

What’s the bottom line? Because pending sales typically lead closings by one to two months, November’s increase points to stronger transaction activity ahead. NAR Chief Economist Lawrence Yun noted that improving affordability – driven by lower mortgage rates, wage growth outpacing home prices, and greater inventory – has helped draw more buyers back into the market.

Home Prices Show Signs of Renewed Momentum

The Case-Shiller Home Price Index – one of the most widely followed gauges of U.S. home values – showed a 0.2% monthly decline from September to October before seasonal adjustments, but a 0.4% increase after adjusting for seasonality. Nationally, prices are still 1.4% higher than a year ago, a slight increase from September’s 1.3% annual gain.

The FHFA Index, which tracks homes financed with conventional mortgages and excludes cash and jumbo purchases, reported seasonally adjusted prices also rose 0.4% month-to-month. Year over year, prices were up a somewhat stronger 1.7%.

What’s the bottom line? Home price growth is showing early signs of renewed momentum: Case-Shiller recorded its first acceleration in annual appreciation since January. If buyer demand continues to improve – as indicated by stronger-than-expected Pending Home Sales – home price appreciation could continue to pick up in the months ahead.

Unemployment Claims Dip on Seasonal and Timing Effects

Initial jobless claims fell by 16,000 in the latest week, with 199,000 people filing for unemployment benefits for the first time. Continuing claims – which measure those still receiving benefits – also declined, dropping by 47,000 to 1.866 million.

What’s the bottom line? First-time claims remain low, likely reflecting seasonal patterns. Employers often delay layoffs ahead of the holidays, and the Christmas holiday itself may have reduced filings as people postponed claims due to travel.

Continuing claims, while elevated for much of the year, may ease as benefit eligibility expires. Most states offer up to 26 weeks of unemployment benefits, and a surge in initial claims last June suggests many recipients may now be reaching the end of that window.

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