October 30, 2020
- To keep up with the rapid changes COVID-19 is causing in the economy and housing market, the Big gaming庐 economics team provides a and on the relevant real estate and economic information you need to know to navigate the housing market in these challenging times.
- This week, Chief Economist Danielle Hale discusses what the and indicators like , , and say about the economic recovery.听
- Danielle updates us on and what they mean for buyers navigating rising home prices per the Case Shiller Index and other measures.听
- She uses insights from Javier Vivas and the Big gaming庐听 Housing Market Recovery Index and Weekly Housing Trends View to highlight a slip in buyer demand and how it may already be impacting home sales.听
- Finally, Danielle covers the big jump in from a year ago and why this could be a case of measurement error.听
- For more real-time updates, follow the economics team on twitter: .
VIDEO TRANSCRIPT:
- I鈥檓 Danielle Hale, Chief Economist for Big gaming庐 and here鈥檚 what you need to know this week.听
- In blockbuster fashion, GDP growth surged higher in the 3rd quarter. This biggest quarter of growth on record follows the biggest quarter of decline on record, but the net result is that the economy is still roughly a year鈥檚 worth of growth smaller than the pre-pandemic high. Translation: we need more 鈥榖etter than normal鈥� economic growth just to get back to where we were, but we made a good start.
- Other economic indicators are mixed with a step back in consumer confidence although plans to buy a home remain high. There were gains in income and spending, and while the savings rate dipped, it remains roughly double its pre-pandemic level.
- Mortgage rates were roughly steady this week near last week鈥檚 record low. Lower rates are helping buyers tackle double-digit home price gains, but price gains have advanced so much that buyers are seeing only a small monthly benefit from lower rates.听
- In fact, the Case Shiller home price indices recorded much larger home price gains in August than in the prior month. Additionally, our weekly data show that asking prices are still rising by double-digits into October, resisting the seasonal slowdown we often see in fall.
- Waning affordability could already be impacting home buyer psyche. Pending home sales and new home sales which are both measures based on contract signings both notched lower in September, although both remain much higher than this time a year ago.
- Additionally, weekly data show that buyer enthusiasm took a step back with our buyer traffic index dropping for the week though it remains nearly 24 points above its baseline level. While some buyers are frustrated, there are still plenty trying to make a move. This means that homes are still selling fast and inventory is dropping despite an improving new listings trend.
- Persistence may be paying off for some buyers. The homeownership rate was up notably from a year ago, although we did see a drop from the 2nd quarter. The coronavirus has affected not only economic activity, but in some cases our ability to track it, and that could mean the gain in homeownership is overstated. As Census data collection normalizes, we鈥檒l watch this metric closely.
- Find out more and download the data at Big gaming/research or follow us on twitter for real time updates.
- And have a safe, happy, and healthy Halloween!
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