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Home prices have been declining due to higher rates, tariffs, and slow global economic slowdown are reaching out shore.  I’ve trying to help everyone understand what the recession will do to your home before price and value.

Summary

  • Breaking down the numbers
  • Homes Prices

 

Breaking down the Numbers

The National Association of Realtors reported Wednesday that its Pending Home Sales Index declined 2.2% in December to 99.0, missing expectations for a 0.5% monthly advance and coming off the heels of a 0.7% decline in November. Recall that pending home sales represent contracts signed for existing home sales set to close in the next one to two months. With December’s pullback, pending home sales are now down 9.8% year over year, marking the 12th straight month of year-over-year declines.

 

Breaking the numbers down further, while the Pending Home Sales Index advanced 2.0% in the Northeast (-2.5% YoY) and 1.7% in the West (-10.8% YoY), these gains were more than offset by a 0.6% monthly decline in the Midwest (-7.2% YoY) and a 5.0% drop in the South (-13.5% YoY).

Speaking to factors impacting demand, NAR Chief Economist Lawrence Yun called stated: “The stock market correction hurt consumer confidence, record high home prices cut into affordability and mortgage rates were higher in October and November for consumers signing contracts in December.” Regarding the government shutdown, Yun added, “Seventy-five percent of Realtors® reported that they haven’t yet felt the impact of the government closure. However, if another government shutdown takes place, it will lead to fewer homes sold.”

Home Prices

Breaking the numbers down further, while the Pending Home Sales Index advanced 2.0% in the Northeast (-2.5% YoY) and 1.7% in the West (-10.8% YoY), these gains were more than offset by a 0.6% monthly decline in the Midwest (-7.2% YoY) and a 5.0% drop in the South (-13.5% YoY).

Speaking to factors impacting demand, NAR Chief Economist Lawrence Yun called stated: “The stock market correction hurt consumer confidence, record high home prices cut into affordability and mortgage rates were higher in October and November for consumers signing contracts in December.” Regarding the government shutdown, Yun added, “Seventy-five percent of Realtors® reported that they haven’t yet felt the impact of the government closure. However, if another government shutdown takes place, it will lead to fewer homes sold.” (Report Here)

All in all, we believe the reading to support our view that while the economy is still expanding, it is not strong enough to support further rate hikes just yet and will, therefore, look for Fed Chair Powell to reaffirm his dovish tone later today.