Mortgage Market Review January 5, 2024

Week of December 25, 2023 in Review


After the markets were closed Monday for Christmas, the latest housing reports showed there’s broad-based home price appreciation around the country while sales are expected to pick up this year. Here are the highlights:

  • Home Sales “Will Improve in 2024”
  • Home Prices Continue Higher
  • Continuing Unemployment Claims Near 2-year High


Home Sales “Will Improve in 2024”


Pending Home Sales were unchanged from October to November, though October’s figures were revised slightly higher according to the National Association of REALTORS® (NAR). Sales were also 5.2% below the level reported in November of 2022. This data measures signed contracts on existing homes, making it a forward-looking indicator for closings as measured by Existing Home Sales.


What’s the bottom line? Though signed contracts were flat from October to November, declining mortgage rates have “sparked a surge in interest, as evidenced by a higher number of lockbox openings,” per NAR’s Chief Economist, Lawrence Yun. Yun added that sales are expected to improve in 2024, as lower rates have led “to savings of around $300 per month from the recent cyclical peak in rates.”


Home Prices Continue Higher


The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices nationwide rose 0.6% from September to October after seasonal adjustment, marking the ninth consecutive month of gains. Prices were also 4.8% higher than in October of last year, which is the fastest annual rate of the year. S&P DJI’s Head of Commodities, Brian D. Luke, noted that the report “reflects a rising tide across nearly all markets.”


The Federal Housing Finance Agency’s (FHFA) House Price Index also saw home prices rise 0.3% in October, with their index setting new record highs in home prices every month since February.


Note that FHFA’s report measures home price appreciation on single-family homes with conforming loan amounts, which means it most likely represents lower-priced homes. FHFA also does not include cash buyers or jumbo loans, and these factors account for some of the differences in the two reports.


What’s the bottom line? Home prices continue to set new highs according to Case-Shiller, FHFA, CoreLogic and Black Knight, more than recovering from the downturn we saw in the second half of 2022. Prices are now on pace to appreciate around 7% this year, based on the reported pace of appreciation through October. These indexes show that now remains a great opportunity for building wealth through homeownership and appreciation gains.


Continuing Unemployment Claims Near 2-year High

Initial Jobless Claims rose by 12,000 in the latest week, with a higher than expected 218,000 people filing for unemployment benefits for the first time. Continuing Claims also rose by 14,000, remaining near the highest level in more than two years as 1,875,000 people are still receiving benefits after filing their initial claim.


What’s the bottom line? The low number of Initial Jobless Claims suggests that layoffs remain muted as employers are trying to hold on to workers. Yet, Continuing Claims have been trending higher and point to a weakening labor market, where it’s much harder for people to find employment once they are let go. Note that this data may be volatile in the coming weeks due to the Christmas and New Years holidays.


What to Look for This Week

After the market closures Monday for the New Year’s holiday, labor sector data will be plentiful. On Wednesday, look for the JOLTS (job openings) report for November while December’s ADP Employment Report (which measures private payrolls) and the latest Jobless Claims will be reported on Thursday. Friday brings December’s Jobs Report from the Bureau of Labor Statistics, which includes Non-farm Payrolls and the Unemployment Rate.


Technical Picture

Mortgage Bonds have been in a beautiful uptrend for the last few months, though they have tested the lower bound of the rising trendline and ended last week trading in a range with support at 101.392 and a ceiling at 101.83. The 10-year ended last Friday trading in a range with support at 3.76% and a ceiling at 3.93%.


For more in-depth updates, contact the mortgage experts at the Roller Mortgage Team.


Disclaimer: The content of this blog is for informational purposes only and should not be considered professional financial advice. LeaderOne Financial Corporation makes no representation about the accuracy or completeness of the information provided. This information is provided “as is” without any warranty, express or implied. Readers should not rely solely on this information for financial decisions and should consult a professional for advice specific to their situation. LeaderOne Financial Corporation is not responsible for any actions taken based on the information in this blog

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