Despite some recent volatility in the broader economy, the housing market continues to show signs of strength. For example, new home construction – which is an important indicator of the housing market’s health – rose 6.5 percent in September and is now 17.5 percent higher than last year. September’s improvement beat economists’ expectations and marked the sixth consecutive month that housing starts remained above an annual rate of one million units, which is considered healthy for the market. But despite the gains in overall housing construction, single-family homes were largely flat from the month before, with both starts and building permits virtually unchanged. That means, most of the month’s increases were found among the multi-family market, which is being boosted by a growing demand for rentals. Still, the news is an encouraging sign that a stronger job market and favorable affordability conditions are releasing pent-up demand for housing. In the South, the number of new homes that broke ground in September reached the highest level since October 2007. Starts in the West also hit 8-year highs. More here.

The National Association of Home Builders’ Housing Market Index is a gauge of how builders see the current market for newly built single-family homes. The index is scored so that any number above 50 indicates more builders view conditions as good than poor. In October, the HMI rose three points to 64, which matches levels last seen at the end of the housing boom in 2005. David Crowe, NAHB’s chief economist, says the improvement is further proof that the housing market is strengthening. “With October’s three-point uptick, builder confidence has been holding steady or increasing for five straight months,” Crowe said. “This upward momentum shows that our industry is strengthening at a gradual but consistent pace. With firm job creation, economic growth, and the release of pent-up demand, we expect housing to keep moving forward as we start to close out 2015.” In fact, builders are particularly optimistic about the market going forward. Among the three individual index components measuring sales expectations for the next six months, current condition, and buyer traffic, expectations for future sales saw the biggest increase, moving up seven points to 75. The component measuring current sales conditions jumped three points to 70, while buyer traffic was unchanged from the month before at 47. More here.

The vast majority of renters say eventually owning a home is one of their top priorities, according to the results of a recent survey from the National Association of Realtors. In fact, 61 percent of renters say they want to buy, up 11 points since 2013. Chris Polychron, NAR’s president, says the survey’s results show Americans are ready for homeownership. “Homeownership is part of the American Dream, and this survey proves that dream is alive and thriving in our communities,” Polychron said. The survey – which measures consumer attitudes toward housing issues – found Americans in a particularly optimistic mood. For example, more than eight in ten Americans said they felt buying a house was a good financial decision and, among current homeowners, most believe they could sell their house for at least what they paid for it. Survey respondents also overwhelmingly believe now is a good time to buy a house and nearly 90 percent expect real estate sales to continue to improve. In short, Americans are feeling good about the real estate market and a growing number are thinking about buying a house someday in the near future. More here.

Whether or not the Federal Reserve will raise interest rates has been a topic of interest among industry analysts for a while now. Speculation has risen before each meeting of the Federal Open Market Committee, which is the branch of the Federal Reserve Board that determines monetary policy. Mostly, this is because real estate analysts fear the affect higher mortgage rates would have on affordability conditions might scare potential home buyers away. Lower-than-normal mortgage rates have, after all, played a significant role in fueling the housing market’s rebound over the past few years. But, according to Trulia chief economist Selma Hepp, this fear is unrealistic. Hepp writes, “When the Feds decide to raise rates, any increase will be nominal and gradual. The anticipation is that the initial increase will be only 25 basis points (e.g. from 3.75% to 4.00%).” In other words, Hepp believes an increase of that size wouldn’t affect home sales due to the fact that rates would still be historically low and favorable to home buyers. But, though this may be true, it likely won’t calm speculation when the next chance for the Fed to raise rates comes during the committee’s final meeting of the year in December. More here.

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates were mostly unchanged last week from the week before. In fact, rates for 30-year fixed-rate mortgages with both conforming and jumbo balances were flat, while 15-year fixed-rate loans saw a slight decrease and loans backed by the Federal Housing Administration moved up. Despite favorable rates, however, application demand fell sharply due to new mortgage disclosures rules. “Application volume plummeted last week in the wake of the implementation of the new TILA-RESPA integrated disclosures, which caused lenders to significantly revamp their business processes, and as a result dramatically slowed the pace of activity,” Mike Fratantoni, MBA’s chief economist, said. “The prior week’s results evidently pulled forward much of the volume that would have more naturally taken place this week.” A closer look at the numbers reveals that the previous week did, in fact, see a 25.5 percent increase in overall mortgage demand – which includes both refinance and purchase activity. Last week, on the other hand, total demand for mortgage applications fell 27.6 percent. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

First-time home buyers have always been an important demographic when measuring the health of the housing market. Historically, younger buyers have accounted for around 40 percent of all home sales but, since the housing crash, there have been fewer first timers active in the market. Because of this, a lot of attention has been paid recently to the home buying habits of young Americans. But what do prospective home buyers between the ages of 18 and 34 look for when buying their first house? Well, according to a recent survey conducted by SurveyMonkey, it may not be what you think. For example, though conventional wisdom says most young people would prefer an urban lifestyle, the results show considerations such as walkability and access to public transportation are relatively unimportant to Millennial buyers. Instead, first-time buyers were more likely to choose a neighborhood for its schools, safety, and affordability. In addition, most young buyers cited practical reasons for wanting to buy rather than rent a home. In fact, the number one reason first-time buyers said they wanted to buy a house was for a sense of stability and permanence. Having a safe place to invest their money and wealth ran a close second. More here.

Distressed home sales, which include bank-owned properties and short sales, skyrocketed following the financial crisis. In fact, they accounted for 32.4 percent of all sales in January 2009 – a staggering amount when considering distressed sales typically only account for about 2 percent of home sales. Caused by plummeting home prices, these sales featured large discounts and spurred real-estate investors who were looking to capitalize on the down market. Since then, however, home prices have largely rebounded from their post-crash lows. This price rebound has led to an ever-decreasing number of distressed home sales and an increasing number of traditional home buyers active in the market. In short, over the past few years, the housing market has been recovering, homes have regained value, and Americans have, once again, begun buying and selling homes. A new report from CoreLogic offers further proof of this. According to the report, distressed sales accounted for just 9.4 percent of total home sales nationally in July. That’s a 2.1 percent drop from the year before and a 0.4 percent decline from the previous month. Though still higher than historical norms, the improvement has been dramatic and means, at the current pace, distressed sales would return to normal levels within the next few years. More here.