Construction Spending, Home Stuff, & More

Week(s) in Review: Dec. 23-Jan. 3

This week brought us updates on a handful of housing indicators, construction spending, consumer confidence, and more. Also note that today’s Review includes an extra Monday because we skipped the week of Dec. 23-27.

Don’t forget to check out our 2025 Economic Outlook, which is full of wisdom that definitely won’t be proven wrong over the next twelve months.

Monday December 23^rd

New Home Sales

Sales of newly built single family homes increased in November and were about 9% higher than one year ago, but that’s not saying too much. New home sales have fallen off sharply since the 2021/22 boom and have been slightly below 2019 levels for most of the year. Yes, new homes are selling better than existing homes—mostly due to inventory levels—but high interest rates are clearly taking a toll.

There is good news: there were 490,000 new homes for sale at the end of November. That’s the most in seventeen years! New homes accounted for about 37% of total inventory in November, the highest share in a very, very long time.

Conference Board Consumer Confidence Index

Consumer confidence fell pretty sharply in December, erasing much of the gains from November. About half of respondents expressed concern that tariffs will raise the cost of living.

Durable Goods Orders

Durable goods are things that typically last at least three years, and U.S. manufacturers received fewer orders for them in November than they did in October. Through the first 11 months of 2024, durable goods orders were 1.3% lower than in the first 11 months of 2023.

That’s not great. It’s also not surprising. The goods side of the economy has struggled in recent years and is pretty sensitive to interest rates.

The good news: durable goods orders are actually up year to date if we exclude cars and airplanes, categories that are volatile and particularly sensitive to interest rates.

Monday, December 30^th

Pending Home Sales