The economic data calendar in the November 18 week is a light one. The focus of the week will probably be on the housing numbers which include the NAHB/Wells Fargo housing market index at 10:00 ET on Monday, data on housing starts and building permits issued at 8:30 ET on Tuesday, and the NAR report on sales of existing homes at 10:00 ET on Thursday.
The main driver behind the data will be the direction of mortgage rates. The weekly Freddie Mac rate for a 30-year fixed rate mortgage has risen from the recent low of 6.08 percent in the September 26 week up to 6.79 percent and 6.78 percent in the November 7 and 14 weeks, respectively. A big question for the housing market is if potential homebuyers who have been hoping for another dip in rates will decide that is not in the works. There’s a hint that this is the case in the latest MBA weekly numbers on purchase applications. If so, there will be less reason to delay purchasing a home.
Nonetheless, the NAHB/Wells Fargo housing market index for November could fade from the reading of 43 in October. With more inventory of existing units, homebuyers have more selection and less sense of urgency in getting a contract signed. There’s also less prospect that the FOMC is going to pick up the pace in reducing rates, especially with concerns that inflation is going to rise again, or at least not improve further.
Permits issued for new homes in October may include some disaster recovery efforts. There were numerous properties in the Southeast that were so badly damaged they will have to be rebuilt from the ground up after being demolished. It is probably too soon to see actual housing starts if homeowners are waiting for insurance claims to settle, but some may be moving ahead.
The NAR sales of existing homes in October probably got a boost from contracts signed in September when a brief drop in mortgage rates encouraged buyers to take advantage of greater affordability. However, rates have gone up again since then and cool the housing market once again.
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