As the economic recovery continues at an uneven pace, the housing market has been and continues to be "on fire" as it remains one of the few "bright spots" of the economy.
The S&P CoreLogic Case-Shiller national index climbed 1.4% in October from a month earlier, while the 10-city index gained 1.4% and the 20-city grew 1.3% before seasonal adjustment.
Economists polled by IFR Markets expected a 1.0% increase month-over-month.
“The surprising strength we noted in last month’s report continued into October’s home price data,” according to Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. “The housing market’s strength was once again broadly based: all 19 cities for which we have October data rose, and all 19 gained more in the 12 months ended in October than they had gained in the 12 months ended in September.”
He noted that before a trend of “accelerating increases” in the national index commenced in August but was interrupted in May and June, as COVID-related restrictions produced modestly decelerating price gains.
“Since June, our monthly readings have shown accelerating growth in home prices, and October’s results emphatically emphasize that trend,” Lazzara said. “The last time that the national composite matched this month’s 8.4% growth rate was more than six and a half years ago. Although the full history of the pandemic’s impact on housing prices is yet to be written, the data from the last several months are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes. We’ll continue to monitor what the data can tell us about this question”
On an annual basis the national index jumped 8.4% in October, compared with 7.0% in September, while the 10-city rose 7.5%, up from 6.2% the prior month and the 20-city climbed 7.9% after being 6.6% higher a month earlier.
Economists estimated a gain of 6.9% year-over-year.
“The October S&P CoreLogic Case-Shiller index posted the largest increase in housing prices since [March of] 2014,” said Ed Moya, senior market analyst at OANDA. “The 20-city report showed a 7.95% rise year-over-year as strong demand, tight inventories, and low rates keep the housing market on fire. This housing data is rather old and didn’t yield any new insights for the bright spot of the U.S. economy.”
Dallas Fed Texas service sector survey
October Texas service sector activity “returned to positive territory” in December, according to the Federal Reserve Bank of Dallas.
The current general business activity index dropped to negative 4.3 in December from negative 2.6 in November, while at the company level, the index gained to positive 0.7 from negative 0.8.
The outlook uncertainty index fell to 5.2 from 17.4 the month before.
The revenue index climbed to positive 4.2 from negative 0.7, the employment index gained to 5.1 from 0.9, and the part-time employment index increased to positive 1.4 from negative 0.4.
Hours worked fell to 2.1 from 2.6, wages and benefits decreased to 8.6 from 11.2, input prices nudged higher to 21.8 from 20.7, selling prices rose to 5.3 from 3.3, and capital expenditures slipped to 2.2 from 2.4.
Looking six months ahead, the general business activity outlook index climbed to 23.8 from 16.1, while the company outlook gained to 22.5 from 16.2.
The future revenue index rose to 42.3 from 34.4, the employment index climbed to 31.7 from 22.8, and the part-time employment index climbed to 8.6 from 6.8.
Hours worked rose to 12.5 from 6.9, wages and benefits increased to 33.2 from 29.7, input prices gained to 44.1 from 33.9, selling prices climbed to 27.9 from 20.4 and capital expenditures jumped to 24.3 from 14.4.
