Job Market Holds Steady
Mark Zandi, chief economist of Moody’s Analytics, said, “The job market weathered the government shutdown well. Despite the severe disruptions, businesses continued to add aggressively to their payrolls. As long as businesses hire strongly the economic expansion will continue on.” “The labor market has continued its pattern of strong growth with little sign of a slowdown in sight,“ said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “We saw significant growth in nearly all industries, with manufacturing adding the most jobs in more than four years. Midsized businesses continue to lead job creation, however the share of jobs was spread a bit more evenly across all company sizes this month.”
House Sales Stall
House hunters signed 2.2 percent fewer contracts to buy existing homes in December, according to the National Association of Realtors. These so-called pending sales are a future indicator of closings in one to two months. The Realtors’ pending home sales index was also down a dramatic 9.8 percent compared with December 2017. This marks 12 straight months of annual declines. It is also the lowest December sales reading since 2013. Some observers expected sales to get a boost in December from a drop in interest rates. Mortgage rates moved markedly lower to end 2018, with the average rate on the popular 30-year fixed loan falling from just over 5 percent in mid-November all the way to 4.61 percent by Dec. 31, according to Mortgage News Daily.
Home Sellers Losing Price Power
“Price increases are being dampened by declining sales of existing homes and weaker affordability,” David Blitzer, chairman of the S&P index committee, said in a statement. “Housing market conditions are mixed while analysts’ comments express concerns that housing is weakening and could affect the broader economy.” Minutes after Pulte Homes' CEO warning that 2019 will be a "challenging year" for homebuilders, Case-Shiller reports its 20-City Composite price index rose just 4.68% YoY in November (dramatically below the 4.89% expected and the 5.02% October print). This is the weakest home price growth since January 2015.
Courtesy of Sotheby's International Realty's in-house Lender Simon Atik, 310.880.8414, Simon.Atik@grarate.com, Vice President of Mortgage Lending, Guaranteed Rate Affinity.
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