The Fed left rates unchanged this week, as was expected. Fed Chair Jerome Powell signaled the central bank would adjust policy as needed to support 2% inflation. The deadly coronavirus that started in China continues to spread. Concerns over the economic costs of the outbreak within the housing market have helped push mortgage rates to 4-month lows. Consumer confidence jumped in January as the job market outlook improved. The data showed 49% of consumers think jobs are “plentiful,” up from 46.5%.
Within the housing market, new home sales fell unexpectedly in December, held down by a shortage of more affordable homes. However, lower mortgage rates supported the overall housing market. Pending home sales dropped 4.9% in December over November, as the supply of homes hit a record low. Inventory is leanest on the low end, where demand is strongest. Tight inventory continues to drive home prices higher. Nationally, prices increased 3.5% annually in Nov, up from 3.2% in Oct, according to the Case-Shiller index.
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