The early U.S. session has brought several economic releases to the markets, most of which revolve around the U.S. real estate market. As we roll towards the Fall/Winter FOMC meetings, these numbers will come under increasing scrutiny. Let’s take a look at the data and possible opportunity in today’s market.

To the delight of agents and developers, new home sales are up!

Today’s metrics are largely positive:

Event                                                   Previous              Projected             Actual

MBA Mortgage Applications (Oct. 16)    3.6%                     NA                   -4.6%

Durable Goods (Sept.)                            1.7%                    0.9%                  2.2%

Housing Price Index                                 0.2%                   NA                     0.7%

New Home Sales Change (MoM, Sept.) -3.4%                   0.9%                 18.9%

The showstopper is the New Home Sales rate of change number. Coming in up 18.9% and above the negative estimate is a huge deal for this market. We have seen consistent lagging real estate numbers over the past three months. Today’s release is a big step forward.

Overview

In the short run, things are always more complex. As of now, U.S. indices are coming off a bit, with the DJIA down 70 points and the S&P 500 down nine. The USD is taking a hit against the Euro and yen. So, while the news is positive, traders are not all that enthused.

Personally, I keep a close eye on U.S. real estate numbers for insight into what the U.S. Federal Reserve is likely to do next. Extremely robust real estate figures are useful in making a case for the two-percent inflation target. We will see if today's numbers prompt any action from the FED on November 1.