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Last week we received an economic report from the National Association of Home Builders, with their HMI Index, Housing Starts and, The National Association of Realtors® released its monthly report on sales of previously owned homes.

The Wells Fargo National Association of Home Builders Housing Market Index for September posted its highest level of builder confidence in 10 years a higher than expected results with a reading of 64 in October. Analysts expected a reading of 62 based on September’s reading of 61.

The NAHB Wells Fargo Housing Market Index reading is based on three builder confidence readings. Builder confidence in current market conditions rose three points to a reading of 70; builder confidence in housing market conditions over the next six months rose seven points to 75 and buyer traffic in new housing developments held steady with a reading of 47. Any reading over 50 indicates that more builders are confident about market conditions than those who are not.

This news was consistent with September housing starts, which were also higher. The U.S. Commerce Department reported September’s housing starts at an annual level of 1.206 million starts against expectations of 1.139 million starts and August’s reading of 1.132 million housing starts. However, multi-family housing units are primarily rental building complexes built by large construction companies. With this in mind, although the latest aggregate housing starts report showed a gain from August to September, single-family home starts actually declined 5 percent. Seasonality is not necessarily a factor here, as single-family starts from August 2014 to September 2014 increased 4 percent. When including the multifamily housing starts, last month rose 6.5 percent to a seasonally adjusted annual rate of 1.21 million homes. That 17 percent surge in multifamily housing, which includes apartments, accounts for almost all of that.

September sales of pre-owned homes surpassed expectations, according to a report released by the National Association of Realtors®. Sales of previously owned homes reached 5.55 million sales on a seasonally-adjusted annual basis against an expected reading of 5.34 million sales. August’s reading was adjusted downward from 5.31 million sales to 5.30 million sales of previously owned homes.

Low inventories of available homes are driving higher sales. The national median home price was $221,900 in September, up 6.1 percent from September 2014.

The housing market has been robust in many markets across the country, while prices have risen year-over-year for more than three years now.

Inventory of existing homes for sale stood at 4.8 months’ worth of supply at the current pace of sales, down from 5.1 months’ worth in August. Most say a balanced market is having a 6 month inventory of home for sale.

FHFA’s Home Price Index for August showed that home prices for properties associated with mortgages owned by Fannie Mae and Freddie Mac increased at a rate of 5.05 percent in August as compared to a growth rate of 5.80 percent year-over-year in August 2014.

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Freddie Mac reported that average rates for fixed rate mortgages dipped with the average rate for a 30-year fixed rate mortgage three basis points lower at 3.79 percent; the average rate for a 15-year fixed rate mortgage fell by five basis points to 2.98 percent. The average rate for a 5/1 adjustable rate mortgage ticked upward by one basis point to 2.89 percent. Average discount points were 0.60 percent for a 30-year fixed rate mortgage, 0.50 percent for a 5-year fixed rate mortgage and were unchanged at 0.40 percent for a 5/1 adjustable rate mortgage.

Weekly jobless claims were lower than expectations with a reading of 259,000 new claims filed against expectations of 265,000 new jobless claims. New claims were higher than the previous week’s reading of 256,000 new claims. Analysts are keeping an eye on the jobs report as stronger job markets are essential to expanding home sales.

What’s Ahead for the Week?

We’ll get economic news that includes the Case-Shiller reports on home prices, New Home Sales, Consumer Confidence and Consumer Sentiment. As usual, we’ll get Freddie Mac Mortgage Rate Survey and Weekly Jobless Claims on Thursday, and ending the week on Friday, we’ll get the readings on Core Inflation.

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