LIVE MARKETS-The gift of data: Home sales, UMich

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THE GIFT OF DATA: HOME SALES, UMICH

Investors unwrapped two data packages on Friday, which amounted to the Christmas equivalent of underwear and socks - though not exactly a Nintendo Switch II, at least it wasn't coal.

The sales of pre-owned U.S. homes USEHS=ECI increased by 0.5% in November to 4.13 million units at a seasonally adjusted annualized rate (SAAR).

The number marks a sharp deceleration from October's upwardly revised 1.5% gain and lands 20,000 units shy of economist expectations.

In detail, single-family home sales - which represent about 91% of the total - rose by 0.8%. The volatile condo/co-op segment retreated by 2.6% on the heels of the prior month's 5.4% surge.

NAR shows a 5.9% monthly drop in homes on the market. At November's sales pace, it would take 4.2 months to sell every home on the market, down from 4.4 months in October.

"Inventory growth is beginning to stall," writes Lawrence Yun, NAR's chief economist. "With distressed property sales at historic lows and housing wealth at an all-time high, homeowners are in no rush to list their properties during the winter months."

"Wage growth is outpacing home price gains, which improves housing affordability," Yun adds. "Still, future affordability could be hampered if housing supply fails to keep pace with demand."

Separately, the University of Michigan's (UMich) second and final take on December consumer sentiment USUMSF=ECI was adjusted 0.4 points lower, wrapping up 2025 at 52.9.

Survey participants' assessment of present conditions was downwardly revised by 0.3 points, hitting the lowest level in the survey's history for the second month running. Near-term expectations were also bleaker than originally reported - lowered by 0.4 points - but up 3.6 points from November's final reading.

"Despite some signs of improvement to close out the year, sentiment remains nearly 30% below December 2024, as pocketbook issues continue to dominate consumer views of the economy," says Joanne Hsu, UMich's director of consumer surveys.

The graphic below shows the consumer outlook continues to wallow well below the post-COVID plunge.

The closely scrutinized inflation expectations element showed respondents expect annual price growth of 4.2% a year from now, 1.6 percentage points hotter than the most recent core CPI reading.

It's also nearly a full percentage point hotter than the 3.3% year-ahead price growth expectations in January 2025.

Longer-term, consumers expect annual inflation of 3.2% five years from now, 20 basis points cooler than UMich's final November number.

(Stephen Culp)

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