Markets with Megan

In today's episode, Chief Investment Officer Megan Horneman takes a look into the latest housing market insights. Discussing the November NEHB Housing report, Megan notes a surprisingly positive sentiment despite historical weaknesses, attributed to a near-term peak in interest rates and subsequent declines in mortgage rates. An important trend to focus on includes a significant 60% of surveyed developers extending incentives to spur demand, addressing concerns about housing inflation. Additionally, 36% of builders reported cutting prices for the month, suggesting a potential bottom in housing inflation. Megan mentions the importance of continued vigilance in monitoring data trends in the future. Stay informed on economic updates by joining for future episodes, and for any questions or comments, reach out to  podcast at Verdence dot com. 

Hello, this is Megan Horneman, the Chief Investment Officer for Verdence Capital Advisors. We're coming to you today with our regular segment of Markets. With Megan, we got some economic data today about the housing market and for one time I can actually say it was a pretty good report. The NEHB Housing this is the Home Builder Sentiment Index that we get each month. This measures the sentiment on the current conditions of the housing market, what home builders are thinking for the future of the housing market, and then it also measures prospective buyers traffic and that's something that we've noted on these podcasts and we have lots of charts that show how you know, since mortgage rates have been rising, that prospective buyers traffic has really been falling off. So this is a report that came in a bit better than expected as far as sentiment for the month of November, but let's be careful, because it still is very weak in a historical standpoint. What we are seeing is that we've seen a peak here in interest rates, but there is still a lot more to go in 2024 as far as clarity around where the interest rates are going. But because we've seen a near-term peak, we're seeing the mortgage rate come down. So that's translating into some better confidence in the home builders.

Couple other things in this report that I want to mention which is very interesting is that from an inflation standpoint, we've been very concerned about housing inflation. It's sticky we're the Fed to fight that but what we've seen is that 60% of the developers that were surveyed in this index they actually are extending their incentives to get to spur that demand. And then about 36% of builders actually reported that they cut, that they're cutting prices for the month. So this is good from the housing inflation standpoint. There might be a bottom here that we're seeing in housing, but we'll just continue to monitor all of the information that comes in. So again, for once, I can say something good as far as a report on the housing market. That's all we have today. We'll be back this week with some more economic data and if you have any questions or comments, please feel free to reach out to podcast at Verdence dot com. Thank you.