Economic Update

Mostly Positive Reports through Holiday Season 

Economic reports released between Christmas and New Years were mostly positive, showing continued home price growth and increased consumer confidence but falling pending home sales.

• Home Price Growth Continues. Home price growth in 20 major metro areas continued to increase in October with year-over-year growth at 5.1 percent, up from September’s 5 percent increase, according to the Standard & Poor’s/Case-Shiller Home Price Index released last week. Prices have grown at a rate of 5 percent or higher since early 2015. All 20 cities reported year-over-year growth, and 17 cities reported increases from August. Year-on-year growth was highest in Portland, Seattle and Denver. Read more.
  
  
• Consumer Confidence Continues to Improve. The Consumer Confidence Index increased in December, landing at 113.7 -- up from 109.4 in November, the Conference Board said last week. “Consumer confidence improved further in December, due solely to increasing expectations, which hit a 13-year high,” said the Conference Board’s Lynn Franco. “The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices, which reached a 13-year high, was most pronounced among older consumers. … Looking ahead to 2017, consumers’ continued optimism will depend on whether or not their expectations are realized.” Read more.
  
  
• Pending Home Sales Dip. Pending home sales fell 2.5 percent in November following a slight rise in October, the National Association of Realtors said last week. The November figure is 0.4 lower than the year prior. The index -- which reflects contracts but not closings on existing homes -- stands at 107.7, its lowest level since January. Read more.
• Consumer Confidence Continues to Rise. The Thomson Reuters/University of Michigan consumer sentiment index rose to 98.2 in December from November’s reading of 93.8, the highest reading since January 2004. Economists attributed the surge to optimism about the country’s economic trajectory following Donald Trump’s presidential victory. Read more.

RATES
Mortgage Rates Rise
The rate for a 30-year fixed-rate mortgage averaged 4.32 percent this week, up from the previous week’s 4.30 percent. At this time last year, the 30-year FRM rate averaged 4.01 percent.

This week’s 15-year FRM averaged 3.55 percent, up from last week’s 3.52 percent. A year ago, the 15-year FRM averaged 3.24 percent.

--ABA Daily Newsbytes