Last week we received home appreciation data from the Case-Shiller Home Price Index and the FHFAs House Price Index. While both reports showed prices decreasing, neither indicate a housing market crash that you might be hearing about in the media. Let's get into the details.
The Case-Shiller index showed a decrease of 0.6% in November but an overall increase of 7.7% annually. The annual reading for November is a decline from the 9.2% increase reported in October.
The Federal Housing Finance Agency (FHFA) also reported a decrease in home prices, with a 0.1% fall in November. Annually, the report showed an increase of 8.2% but, similar to the Case-Shiller index, the annual report was a decrease from the previous month.
A realistic look at the housing market shows that home prices have been softening across the country, about a 3.6% decrease from their peak in June 2022, but that is very different from the 20% that some media personalities have predicted. In addition, the steepest declines (about 5%) occurred in larger cities and when those cities are factored out, the rest of the country's appreciation remained relatively flat
The Fed hiked the benchmark Fed Funds Rate by 25 points, as expected. This marks the eighth rate hike in less than a year (since March 2022). Although the Fed Chair, Jerome Powell acknowledged that inflation has been slowly declining, he did indicate that there was more work to be done to ensure the downward trend and signaled some additional rate hikes.
After last week's full economic calendar, this week will be relatively quiet. We'll be receiving the latest jobs and bond data. Stay tuned for next week's breakdown!
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- Only 5% down, making new construction homes more accessible
- Float down option, allowing borrowers to secure a lower rate if the market improves by the time the loan is complete
- Interest-only payments during the build period