U.S. Housing Data Is In-Opportunity In The Indices?
Shain Vernier • 2 min read
The early U.S. session has brought several economic releases to the markets, most of which revolve around the U.S. real estate market. As we roll towards the Fall/Winter FOMC meetings, these numbers will come under increasing scrutiny. Let’s take a look at the data and possible opportunity in today’s market.
To the delight of agents and developers, new home sales are up!
Today’s metrics are largely positive:
Event Previous Projected Actual
MBA Mortgage Applications (Oct. 16) 3.6% NA -4.6%
Durable Goods (Sept.) 1.7% 0.9% 2.2%
Housing Price Index 0.2% NA 0.7%
New Home Sales Change (MoM, Sept.) -3.4% 0.9% 18.9%
The showstopper is the New Home Sales rate of change number. Coming in up 18.9% and above the negative estimate is a huge deal for this market. We have seen consistent lagging real estate numbers over the past three months. Today’s release is a big step forward.
In the short run, things are always more complex. As of now, U.S. indices are coming off a bit, with the DJIA down 70 points and the S&P 500 down nine. The USD is taking a hit against the Euro and yen. So, while the news is positive, traders are not all that enthused.
Personally, I keep a close eye on U.S. real estate numbers for insight into what the U.S. Federal Reserve is likely to do next. Extremely robust real estate figures are useful in making a case for the two-percent inflation target. We will see if today's numbers prompt any action from the FED on November 1.