September’s Housing & Economic Update: Prices Cool, Sales Climb, and Inflation Data Returns

September delivered a mix of cooling home price growth and rising buyer activity, while long-delayed government data on inflation and consumer spending finally arrived. Here’s a clear breakdown of what changed, what it means, and how it may shape the months ahead.

Home Prices Slow, but Remain Higher Than Last Year

The latest Case-Shiller Home Price Index showed a slight 0.3% monthly decline before seasonal adjustments and a 0.2% gain after adjusting for seasonality. Prices are still 1.3% higher than a year ago, though slightly slower than August’s annual pace.

The FHFA Home Price Index, which focuses on homes finances with conventional loans, was flat month-to-month, but up 1.7% year over year, showing slightly stronger annual growth.

Bottom line:
Home values remain higher than last year, but appreciation has cooled. If mortgage rates continue trending lower, demand could strengthen and support renewed price growth.

Pending Home Sales Reach Their Highest Level of the Year

Pending Home Sales increased 1.9% in October, beating expectations and marking the strongest contract-signing pace of 2024. Compared to last year, signings were down just 0.4%, a notable improvement.

Bottom Line:
Pending sales typically lead closings by one to two months, so this rise signals stronger home-closing activity ahead. Lower mortgage rates and improving inventory are helping bring buyers back.

Jobless Claims Highlight a Cooling Labor Market

Initial jobless claims dipped to 216,000, their lowest level in two months. However, continuing claims climbed to 1.96 million, one of the highest readings in four years.

Bottom Line:
Even though fewer people are filing new claims, more are staying on unemployment longer. This suggests displaced workers are finding it harder to secure new positions, a clear sign of a slowing job market.

Retail Sales Show Consumers Starting to Pull Back

Delayed September retail data showed a modest 0.2% increase, well below August’s 0.6% gain.

The important “control group“, which feeds directly into GDP, fell 0.1%, marking its first decline in five months.

Bottom line:
Consumers appeared to ease spending in September, hinting at a softer start to Q4. Upcoming October and November reports will offer important insight into whether this slowdown continues.

Wholesale Inflation Ticks Up as Energy Prices Rise

The delayed Producer Price Index (PPI) report showed wholesale prices rising 0.3% from August and 2.7% year over year, largely driven by a nearly 12% jump in gasoline prices.

Core PPI (excluding food and energy) rose just 0.1% monthly and 2.6% annually, bother slightly below expectations.

Bottom line:
Wholesale prices flow directly into the Fed’s preferred inflation gauge (PCE). While some service-related costs rose, others declined, suggesting the upcoming PCE report shouldn’t see a major upward swing.

Final Takeaway

September brought a meaningful shift in the housing and economic landscape: home price growth cooled, buyer activity strengthened, and consumer spending softened. With delayed inflation data now back on track, the coming months will reveal whether these trends stabilize or evolve as interest rates continue to move.x

---

---

More Recent Posts