Tom Moeller

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The Pending Home Sales Index from the National Association of Realtors (NAR) was unchanged during April (-20.3% y/y) at 78.9 following an unrevised 5.2% March decline. The index stood 38.4% below its August 2020 high of 128.0.

In the West, sales improved 4.7% in April (-26.0% y/y) after falling in both of the prior two months. Sales in the Midwest rose 3.6% last month (-21.4% y/y) after a 10.7% March decline. Edging higher, home sales in the South improved 0.1% (-16.7% y/y) in April, the same as in March. In the Northeast, sales fell 11.3% (-21.8% y/y) last month following an 8.1% March decline.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **SURVEYW** database.

- Sales fall sharply y/y.
- Monthly changes are mixed amongst regions.

U.S. Pending Home Sales Hold Steady in April

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The Conference Board's Index of Consumer Confidence rose 1.9% (10.6% y/y) to 111.7 during November following a 10.5% October rise, revised from 9.6%. The level of confidence has moved up from a low of 97.5 in April to the highest level since July of last year. The Action Economics Forecast Survey expected a reading of 112.0 in November. Consumer confidence has been fluctuating between 97.5 and 114.0 over the past two years.

Both components of the index rose this month. The present situation index increased 3.5% (3.2% y/y) to 140.9 after surging 9.9% in October to 136.1. The expectations index improved 0.4% (19.3% y/y) in November to 92.3 after rising 11.0% in October.

The percentage of respondents assessing business conditions as “good” eased to 21.3% this month after rising to 22.0% in October. It remained near the highest percentage in fifteen months. The percentage assessing conditions as “bad” eased to 15.3% from 16.7% in October.

The appraisal of labor market conditions slipped in November as 33.4% of respondents thought jobs were plentiful, down from 34.1% in October. Jobs were viewed as hard to get by 15.2% of respondents this month following 17.6% in October. This measure has risen steadily this year from 11.0% in January. The labor market differential calculated by Haver Analytics (the percentage of consumers who think jobs are plentiful minus the percentage who believe that jobs are currently hard to get) rose m/m to 18.2%, but remained below a high of 47.1% in March 2022. This series has a 60% correlation with the unemployment rate over the last ten years.

Expectations for business conditions surged in November. A higher 23.5% of respondents expect conditions to improve over the next six months, up from 21.1% in October, while a higher 15.2% expect them to worsen, up from 13.0% in October. On employment, 21.7% expect the number of jobs to increase over the next six months, the highest percentage in roughly two years and notably higher than last month’s 18.4%. A somewhat larger 17.8% respondents expect the number of jobs to decline versus 16.2% in October. A lessened 19.0% expect income to increase in six months versus 19.5% in October. That remained up from 16.3% in February and compares to 11.8% who expect income to decrease.

The expected rate of price inflation over the next twelve months fell to 4.9% in November from 5.2% in October. This was the lowest since March 2020. Interest rates are expected to rise over the year but the percentage expecting an increase fell to 43.6% from 47.2% in October. The percentage of respondents expecting equity prices to increase over the next twelve months increased to 56.4% from 51.9% in October, while the percentage expecting a decline eased to 21.3% from 22.3%.

The percentage of respondents planning to buy a home in November fell to 5.4%, its lowest in three months, from 6.1% in October. Plans to purchase an automobile edged down this month to 12.6% from 13.1% in October.

The Consumer Confidence data are available in Haver’s **CBDB** database. The total indexes, which are indexed to 1985=100, appear in **USECON**, and market expectations are in **AS1REPNA**.

The minutes to the latest **FOMC** meeting can be found [here.](https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20241107.pdf)

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- Confidence improves to highest level since July 2023.
- Both present situation & expectations measures increase.
- Inflation & interest rate expectations decline.

Consumer Confidence Improves in November; Inflation Expectations Fall

Winnie Tapasanun

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New single-family home sales plunged 17.3% m/m (-9.4% y/y) to 610,000 units at an annual rate in October following a 7.0% gain to 738,000 in September (+4.1%, 738,000 initially) and a 2.4% drop to 690,000 in August (-2.3%, 709,000 previously), data from the U.S. Census Bureau showed. The October level reading was the lowest since November 2022. The Action Economics Forecast Survey expected new home sales of 723,000 for October. New home sales, while up 17.5% from the 519,000 low in July 2022, had fallen 40.8% from their peak of 1.031 million in October 2020. The plunge in October sales accompanied a rise in the average 30-year fixed-rate mortgage to 6.43% in October from 6.18% in September. It had since risen to 6.84% in the November 21 week, according to Freddie Mac.

By region, month-on-month new home sales fell in October in two of four major regions. Sales in the South slumped 27.7% (-19.7% y/y) to 339,000 in October, the first m/m drop since July to the lowest level since April 2020, after a 7.6% rise to 469,000 in September. Sales in the West fell 9.0% (-1.3% y/y) to 152,000, the second m/m fall in three months to the lowest level since May, following a 5.0% September increase to 167,000. To the upside, sales in the Northeast jumped 53.3% (35.3% y/y) to 46,000 in October, the fourth m/m advance in five months to the highest level since January, after a 42.9% rebound to 30,000 in September. Sales in the Midwest rose 1.4% (15.9% y/y) to 73,000, the first m/m rise since July, after a 2.7% September decline to 72,000. Notably, despite the October m/m slump in the South, the region still posted the largest level figure (339,000) for new home sales among the four regions.

The median sales price of a new home rose 2.5% (4.7% y/y) to $437,300 in October after a 5.2% rebound to $426,800 in September, registering the third m/m rise in four months to the highest level since August 2023. The median sales price, however, had fallen 5.0% since its October 2022 peak of $460,300. The average sales price of a new home advanced 7.0% (9.4% y/y) to a record-high $545,800 in October, up for the third month in four, on top of a 6.9% September gain to $509,900. The average price was 0.8% above a high of $541,200 in July 2022. These sales price data are not seasonally adjusted.

The number of unsold new homes on the market rose 2.1% (8.8% y/y) to 481,000 in October, the highest level since January 2008, after holding steady m/m at 471,000 in September. The latest figure was 3.2% above a high of 466,000 in October 2022. The seasonally adjusted months' supply of new homes for sale rose to 9.5 months in October, the highest since October 2022, after falling to 7.7 months in September. It was up from 7.9 months in October 2023 and a low of 6.9 months in May 2023.

The median number of months a new home stayed on the market increased to 2.6 months in October, the highest since March, after rising to 2.5 months in September. The latest reading was up from 2.5 months in October 2023 and the record low of 1.5 months in both September and October of 2022 but down from a high of 5.1 months in March 2021. These figures date back to January 1975.

New home sales are recorded when the sales contract is signed. New home sales activity and prices are available in Haver's **USECON** database. The consensus expectation figure from Action Economics is available in the **AS1REPNA** database.

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- October sales -17.3% m/m (-9.4% y/y) to 610,000, the second m/m drop in three mths.; Sept. level number unrevised at 738,000.
- Sales down m/m and y/y in the South and West but up m/m and y/y in the Northeast and Midwest.  
- Median sales price rises to $437,300, the highest since August ’23; average sales price jumps to a record-high $545,800.
- Months' supply of new homes for sale rises to 9.5 months, a two-year high.

U.S. New Home Sales Plunge in October; Lowest Level Since November ’22

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House prices increased 0.7% during September, as measured by the Federal Housing Finance Agency (FHFA) House Price Index. The gain followed a 0.4% rise in the August reading and a 0.1% June uptick. The 4.4% y/y increase was steady, but reduced from the recent high of 7.3% in February. It was below the peak 18.9% rate of gain in July 2013.

Price strength in September was led by a 7.1% y/y rise in the Middle Atlantic region of the country, where prices rose 1.3% m/m after rising 0.5% m/m in August.

Somewhat lesser y/y strength was registered last month in New England where prices rose 6.3 y/y and 1.5% m/m in September. House prices in the East North-Central region also rose 6.3% y/y but that was down from 9.1% in 2023. Prices rose 0.2% m/m in September. Home prices in the East South-Central region increased 6.3% y/y, about the same as in 2023. They rose 1.4% m/m in September. A 5.3% y/y rise in house prices was logged in the West North-Central region after a 6.1% y/y rise in 2023, with a 0.7% September m/m gain.

The slowest annual gains were in the Mountain region where a 3.9% y/y increase was logged, but prices spiked 1.7% in September alone. Prices in the Pacific region increased 2.9% y/y after a 5.2% gain in 2023, and a 0.4% September rise. In the West South-Central region, home prices increased 1.2% y/y after a 3.5% y/y 2023 rise, with no change in September prices.

The FHFA house price index is a weighted purchase-only index that measures average price changes in repeat sales of the same property. An associated quarterly index includes refinancing the same kind of properties. The indexes are based on transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included.

The FHFA data are available in Haver’s **USECON** database.

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- Monthly rise is largest since February; y/y gain eases.
- Annual increases pick up in all but two of nine regions.


U.S. FHFA House Prices Strengthen in September

Robert Brusca

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**The U.K. Distributive Trades Sector Struggles**
Quarterly data from the United Kingdom distributed trades survey for the fourth quarter show mixed results from participants although data are still quite clearly weak across the board and, when at their very best, are no better than neutral.

**Distributive Trades: Retailing**
The distributive trades survey shows that imports improved in the fourth quarter to a reading of -6 from -15 in the third quarter. The four-quarter average has been around -11 so this is an improvement relative to the average. Capital spending for the year ahead also made some improvement in retailing to a -27 reading from -35 previously; however, that's still weaker than the four-quarter average of -24. The business situation expected over the next six months; however, deteriorated to -21 from -13 and that's much worse than the four-quarter average of -7. Inflation continues to be an issue in the U.K. although it is moderating. It may be an important reason the business situation is eroding. However, selling prices in the fourth quarter are weaker than in the third quarter at a +24 reading compared to +30 in the third quarter; however, that's a lower reading than the four-quarter average of +32. Employment expectations strengthened to -18 from -25 in the third quarter and that's better than the four-quarter average of -22, indicating some ongoing improvement, the survey on employment. Expected data show that price inflation is expected to be weaker at a +15 reading in the fourth quarter compared to +30 in the third quarter- this compares to a four-quarter average of +43 so inflation progress is being made. Employment expectations, however, are weakening at a -28 reading for the fourth quarter compared to -18 in the third quarter; compared to a four-quarter average of -16. The negative expectations for employment are getting worse.

**Distributive Trades: Wholesaling**
Turning to wholesaling, reported imports are deteriorating, the opposite result that we saw for retailing, with a +7 reading in the fourth quarter compared to a +14 reading in the third quarter; however, the +7 reading is only a tick weaker than the +8 four-quarter average for imports. Capital spending is slightly improved in the fourth quarter compared to the third quarter although slightly weaker than its four-quarter average with a -15 reading for the fourth quarter and a -12 four-quarter average. The business situation expected over the next 12 months deteriorates sharply in the fourth quarter, falling to -12 from a +20 in the third quarter; those readings compare to a four-quarter average of +10, confirming that business expectations are a problem. The selling price for wholesaling ticked up in the fourth quarter to +14 from +12 in the third quarter, but that's significantly lower than the four-quarter average of +24. Inflation progress is being made but HICP data show that inflation, while better, continues to run at a pace above trend. Employment fell off sharply in the fourth quarter; the fall was to a net reading of zero after +14 in the third quarter; those metrics compare to a +9 reading over the last four quarters. Expected prices in the fourth quarter improved significantly (slowing their gain) to +11 from +31 in the third quarter and that survey compares to a +28 over four quarters. Employment expectations in the fourth quarter also declined to +11 from +18 in the third quarter, but they continue to sit on their four-quarter average.

**Summing up**
The rankings are presented in the table and there are but two exceptions where rankings stand above the 50th percentile. Most readings stand below a ranking at the 50th percentile, which puts them below their historic medians calculated from data back to the first quarter of 1990. Only wholesaling imports at a 51.4 percentile standing and expected employment in wholesaling at a 70 percentile standing, have standings above their 50th percentiles. However, wholesaling employment trends over the past have a 49.3 percentile standing, fairly close to neutral, but everything else in the table shows numbers that are quite significantly below the 50th percentile, frequently and most commonly, below the 30th percentile standing. These are readings that have been weaker than their fourth quarter values less than 30% of the time for the most part. Some of them are much weaker than that. The U.K. clearly is experiencing difficulty. There's barely any evidence of any rebound in this survey and only a few categories are improving somewhat in the fourth quarter compared to the third quarter. None of this is very convincing on trend. The ranking data tell us the conditions continue to be extremely weak. The trends tell us that there's very little improvement and still much deterioration going on. It's a grim report for distributive trades survey from the United Kingdom for the fourth quarter. Wholesaling rankings stand broadly higher than those for retailing but without much meaning since both are so weak.

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United Kingdom

U.K. Distributive Trades Survey – Mixed Report/Weak Results