As we enter the year’s final week, the financial landscape is marked by solid housing appreciation data and evolving bond market trends. Let’s explore the latest developments and their implications.
Housing Appreciation: Case Shiller and FHFA Reports
A month-over-month increase of 0.6% in the Case Shiller Data indicated robust growth for October. Notably, 19 of the 20 cities in the U.S. showed positive trends, with only Portland experiencing a slight dip.
The FHFA Data report, focusing on homes with conforming loan amounts, also showed an increase of 0.3% for the month and 6.3% year-over-year. Both Case Shiller and FHFA data reaffirm the strength of the housing market.
Market Expectations: A Consistent 7% Appreciation Rate
The unanimous consensus across various indices (Case Shiller, FHFA, CoreLogic, Black Knight) suggests an appreciation rate of around 7% for 2023. This aligns closely with early-year predictions and showcases the market’s resilience, even amidst rising interest rates.
Bond Market Dynamics: Mortgage-Backed Securities and Treasury Yields
Mortgage-backed securities (MBS) are currently down by six basis points, and MBS is showing signs of stability. A positive trend with solid support levels indicates the potential for continued price increases.
While the 10-year Treasury Yield remains flat at 3.89%, the yield reflects a clear downward trend within a defined channel. This stability bodes well for the bond market, especially if yields stay below the 3.99% threshold.
Upcoming Housing Data and Market Closures
Pending Home Sales: Scheduled for release on Thursday, this will provide further insight into the housing market’s momentum.
Market Schedule: The markets will close early at 2 PM on Friday, so expect a lighter update schedule towards the end of the week.
As 2023 approaches, the financial market is showcasing signs of robustness, particularly in the housing sector. While experiencing slight fluctuations, the bond market remains on a positive trajectory. Keeping a close eye on these trends will be crucial as we wrap up the year.
