CoreLogic, a leading provider of consumer, financial and property information, reported that home prices, including distressed sales, rose by 6.7% from October 2015 to October 2016. Month-over-month, prices rose 1.1% as the sector continues to graze in greener pastures. Looking ahead, prices are expected to rise 4.6% from October 2016 to October 2017.
The government released the second reading for third quarter Productivity, which was near in line with estimates of 3.1%. Within the Productivity numbers, unit labor costs rose by 0.7% versus the 0.2% expected, which measures the expense imposed on companies to compensate workers for their output. It could signal wages may be on the upswing and thereby wage-based inflation fears … something we have not seen in a decade.
Freddie Mac recently released it monthly outlook saying that interest rates surged higher following the U.S. presidential election. Freddie Mac reported that it expects a December rate hike to the short-term Fed Funds Rate at the December 13-14 FOMC meeting and anticipates more hikes in 2017. Freddie Mac went on to say that higher mortgage rates will drive down homebuyer affordability, dampening demand and weakening home sales, softening house price growth, and slowing the growth in new home construction. Mortgage market activity will be significantly reduced by higher rates.
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