All things considered, last week went pretty well.
Lets start with the real estate news that made the most headway last week: Pending homes sales jumped over 10%. The jump was pretty uniform across the country, with only the West not experiencing an overall increase in pending sales. Obviously, this is good news by itself. But what made this story so refreshing was that most economists expected a decline in pending home sales. With the tax credit long expired, perhaps we can contribute the news to good old fashioned confidence.
Next, mortgage rates continued to climb. Sure, this might not be the most welcoming news if you’re putting a loan on a property or looking to refinance. It does, however, imply that investors are willing to take more risk in search of greater returns. Another strong sign that confidence is brewing in the market (and even though interest rates are up, they’re still at historically low levels).
However, not all went well last week. Home prices were down in September, according to a Standard and Poor’s / Case-Shiller index of home prices in twenty major US metros. The 0.7 percent overall decline was larger than expected. Of the 20 cities, 18 experienced declines in pricing in September. Furthermore, home prices were down for the past year in 15 of the cities indexed.
Also, Friday’s employment report revealed weaker than expected job growth. Economists were predicting 150,000 new jobs for the month, whereas only about 40,000 were added.
Despite some bad news though, the market plowed right along. Wall Street was quite bullish last week, as the major indexes posted gains throughout the week. Over the past three years, such news most often had the effect of cratering any rally. This time around, the markets were undeterred. What does all this mean? It means that investor sentiment is increasing and confidence is building.
Add everything up and there was a lot to like about last week.