Home Prices Went for a Wild Ride This Year. What’s Ahead.

Prices nationwide jumped 19.7% in August, according to the Case-Shiller Indices. And many cities saw even larger increases: Austin, Texas, 33.5%; Naples, Fla., 32%; Boise, Idaho, 31.5%. Prices rose more than 25% in a handful of other cities, including three in Florida—Ocala, Punta Gorda, and Sebastian-Vero Beach—and in Salt Lake City and Phoenix. There were exceptions. Two with the softest single-family markets: St. Croix, Virgin Islands, down 8.5%, and Shreveport-Bossier City, La., off 1.5%.

There are signs of a slightly cooling market: In Octobder, Redfin reported that 60% of offers had at least one competing bid—down from a high of 74% in April. The NAR says Dallas-area prices soared 17.3% in the third quarter. “You are not seeing, like, 80 offers anymore, but you are still getting 20 or 30 offers on a good property, which is still very competitive,” says Todd Luong, a listing agent with Re/Max DFW Associates.

When 2021 is in the books, the NAR expects prices nationally to be up by 14.7%. But there is hope for beleaguered buyers. The NAR sees growth in 2022 moderating to 2.8%, as more new homes hit the market. The downside? Rising mortgage rates.

Last Week

The New Variant

After warnings that the failure to tap Jerome Powell to run the Federal Reserve would unsettle the markets, tech stocks fell on his renomination on worries that he would turn hawkish. Then, after Thanksgiving, stocks, oil, and Bitcoin tumbled on fear of a new southern Africa coronavirus variant. The

Dow Jones Industrial Average
finished the short week down 2%, to 34,899.34; the

S&P 500
was off 2.2%, to 4594.62; and the

Nasdaq Composite
shed 3.5%, to 15,491.66.

Thanksgiving Data

Consumer spending rose 1.3% in October and personal incomes were up 0.5%. Jobless claims fell to their lowest level in 52 years, and third-quarter gross domestic product clocked in at 2.1.%, nothing special. Expectations pre-variant had been for a bang-up fourth quarter.

Biden‘s Twofer

President Biden announced his pick of Powell for a second four-year term on Monday. Biden, however, added that he would also nominate Fed Governor Lael Brainard, favored by progressive Democrats for her views on climate change and bank regulation, as vice chair. Biden also can now fill three other seats at the Fed.

Playing the Oil Reserve Card

A group of industrial powers struck back at rising oil prices by releasing some strategic reserves, a possibility that China’s Xi Jinping and President Biden had discussed at their summit. On Tuesday, Biden announced a coordinated release by the U.S., China, Japan, South Korea, India, and the U.K., with the U.S. targeting 50 million barrels. Brent crude fell on the announcement, then rose 3.3%. The next move belongs to Opec+, which has resisted raising output.

Europe on Edge

The U.S. shared intelligence on a buildup of 92,000 Russian troops on Ukraine’s eastern border. Ukraine also alleged a coup attempt and warned of a Russian attack. Polish officials reported migrant crossing attempts from Belarus, and the U.K. and France argued over migrants crossing the English Channel. Riots broke out in the Netherlands and Brussels, and protests hit Austria over new pandemic lockdown orders. Departing German Chancellor Angela Merkel called the Covid surge the worst yet.

Annals of Deal Making

Ford Motor

and

Rivian Automotive

mutually backed off a plan for the electric truck start-up to make a Ford-branded truck. Ford scored big as its $500 million stake in Rivian soared after the truck maker’s initial public offering…Telecom Ericsson agreed to pay $6 billion for Vonage, a roughly 28% premium. Jana Partners had been urging the pioneer of internet telephony to sell or break itself up…KKR bid $12 billion for

Telecom Italia
,
Italy’s former phone monopoly. The telecom has $22.5 billion in debt…private-equity firms Bain Capital and Hellman & Friedman agreed to buy healthcare software company athenahealth for $17 billion. Veritas Capital and Elliott Management tripled their 2019 investment…The Justice Department challenged the $315 million merger of U.S. Sugar and Imperial Sugar on antitrust grounds.

Write to Shaina Mishkin at shaina.mishkin@dowjones.com