“I wish I was homeward bound.” (Simon and Garfunkel) Home sales and construction data rose in November, helping more buyers head toward new homes.

November housing starts rose 3.3 percent from October to an annual rate of 1.297 million units, above expectations. Housing starts are also up nearly 13 percent when compared to November 2016. Single-family starts, which account for the biggest share of the housing market, surged 5.3 percent from October to the highest level since September 2007. Multi-family dwellings saw a slight gain from October.

Building permits, a sign of future construction, fell 1.4 percent from October to an annual rate of 1.298 million units, though this figure was above expectations.

Home sales were also strong, as November existing home sales hit an 11-year high, surging 5.6 percent from October. The National Association of REALTORS® reported that existing home sales reached an annual rate of 5.81 million units, with three of the four major regions of the country producing gains. November new home sales rose 17.5 percent from October to an annual rate of 733,000 units, a ten-year high, per the Commerce Department. That was the biggest monthly gain since January 1992. Sales of new homes were also up nearly a whopping 27 percent from November 2016.

However, low inventory remains a challenge in many areas, as total inventories slumped nearly 10 percent from last year to just a 3.4-month supply for existing homes. Inventories of new homes also remained on the low end with just a 4.6-month supply. A 6-month supply is considered a normal inventory level.

Economic growth remained solid in the third quarter of 2017, spurred on by robust business spending that was well above weak levels experienced at the beginning of the year. The final read on third-quarter Gross Domestic Product rose 3.2 percent, just above the 3.1 percent from the second quarter.

The Fed’s favorite inflation reading, Core Personal Consumption Expenditures, showed that inflation remains tame, as the November reading was in line with expectations. Low inflation typically benefits fixed assets like mortgage bonds, and the home loan rates tied to them.

Last, but certainly not least, the House and the Senate passed the Tax Cuts and Jobs Act, which sent the major stock indexes to fresh record highs, while mortgage bond prices edged lower. Looking ahead, it is still unclear what long-term impact the bill will have, but with the corporate tax cuts included, the bill could favor stock markets.

At this time, home loan rates remain attractive and near historic lows.

Just a few economic reports highlight an otherwise shortened trading week. All markets will be closed on Monday for the Christmas holiday. On Friday, the bond markets will close early at 2:00 p.m. ET, while stocks are open for a normal session.

  • Economic data gets underway on Wednesday with the release of the S&P/Case-Shiller Home Price Index, Pending Home Sales and Consumer Confidence.
  • On Thursday, look for weekly Initial Jobless Claims.
  • Regional manufacturing news via the Chicago PMI will be delivered on Friday.

If you or someone you know has questions about home financing or home loan rates please contact me. I’d be happy to help.

Related Articles

There's no place like home, just ask Mackenzie Holowach. When the pandemic hit, Holowach was transferred to assist at a COVID testing site and later worked in a New Jersey ICU. Changing clothes before entering the home she shared with her sister became her norm and Holowach even spent time living…
Read More of the post Stories from the Frontline

Homebridge Launches Office of Diversity and Inclusion as Part of Commitment to Employees, The Housing Industry, And Customers Homebridge announced their newest commitments to diversity, inclusion and empowerment for borrowers and employees of the company. As of September 15th, 2020 – Homebridge has committed to the following initiatives as it…
Read More of the post Homebridge Launches Office of Diversity and Inclusion

Fall is here and as the leaves change colors you may be asking yourself, what would make my home the one I’ve always dreamed of? Maybe an inground pool, a backyard deck or even a sunroom? Lavish changes like these can certainly make a difference in how you feel about…
Read More of the post Top 3 Home Renovations and How to Achieve Them

Many homebuyers look for the “perfect” home rather than the right home. If you’re shopping for a new home to build equity and set down roots for you and your family, think about expanding your search to include the often-overlooked fixer-uppers. Combining your purchase loan with a renovation loan can…
Read More of the post Why & How to Buy & Reno a Fixer Upper

We recognize this is a difficult time for many people. Click here or call 866-913-2951 for more information and to learn about current options available to our borrowers.