This Week in Real Estate: October 23, 3017

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Builder confidence reaches its highest reading since May and the unemployment rate settles into a 16-year low fueling early fourth quarter optimism This Week in Real Estate. Below are a few highlights from the third week of October that influence our business:
* CoreLogic Releases First HPI Forecast Validation ReportCoreLogic released its first HPI Forecast Validation Report on Thursday that publicly compares its 12-month HPI Forecast to the actual HPI Index. The HPI Forecast is a projection of home prices using the HPI and other economic variables. The first validation report shows: (1) the national forecast prediction of a 5.4 percent increase was within 0.7 percent of the 6.1 percent increase of the HPI for the 12-month period ending in June 2017, (2) the most accurate forecast was for the Phoenix-Mesa-Scottsdale, AZ area, which at 6.6 percent came within 0.4 percent of the actual HPI increase of 6.2, and (3) the widest gap was in Seattle-Bellevue-Everett, WA with an 8.4 percent under-estimation of actual increase.
* Builder Confidence Rises Four Points in October. Builder confidence in the market for newly-built single-family homes rose four points to a level of 68 in October on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This was the highest reading since May. This current reading shows that home builder sentiment is rebounding from the initial reaction of concern due to hurricanes in Florida and Texas, including the anticipated effects of repair and restoration work. However, builders need to be mindful of long-term, regional impacts from the storms, such as intensified material price increases and labor shortages. It nonetheless is encouraging to see builder confidence return to the high 60s levels we saw in the spring and summer. Looking at the three-month moving averages for regional HMI scores, the South rose two points to 68 and the Northeast rose one point to 50. Both the West and Midwest remained unchanged at 77 and 63, respectively.
* Jobless Claims Are The Lowest Since 1973. America’s job market is red hot. Only 222,000 American’s filed jobless claims for the first time last week, the fewest since March 1973. Unemployment is at a 16-year low of 4.2%. When unemployment peaked at 10% in 2009, shortly after the Great Recession, initial jobless claims were over 650,000.

Have a productive week!

Jason

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