The Research staff analyzes the week's key data releases and tell you what they mean for you and your business.

1. Week of October 18–October 22, 2010
Produced by NAR Research

2. Weekly Economic Forecast
Indicator Updated
Forecast
Past Week’s
Forecast
Directional
Shift
GDP 2010 Q3: 1.7% 1.5% ↑
GDP 2010 Q4: 2.7% 2.7% ↔
GDP 2011 Q1: 2.6% 2.6% ↔
Unemployment rate by the
year-end 2010:
9.8% 9.9% ↓
Average 30-year fixed mortgage
rate by the year-end 2010:
4.5% 4.5% ↔
NAR's monthly official forecast as of October 4
Produced by NAR Research

3. Monday, 10/18/10
• An indicator of sales and
expectations for future home
building, the NAHB/Wells Fargo
Housing Market Index moved up
three points for the month of
October, to a value of 16—first
uptick in five months. An index
value of 50 represents markets in
balance; values higher than 50,
point to more optimism about the
market, whereas values below 50
represent more pessimistic opinions
about market conditions.
• All individual components of the
index posted advances. “Single-
family sales: Present” moved up
three points; “Single-family sales:
Next 6 Months” rose five points;
and “Traffic of Prospective Buyers”
component increased two points.
• Builders’ confidence level reflects
continued weakness in the housing
market, where new construction is
competing with distressed sales.
Economic Updates
Produced by NAR Research

4. Monday, 10/18/10 (cont’d)
• Today, the Federal Reserve released the
figures for Industrial Production.
Production decreased 0.2 percent in
September, following a 0.2 percent
increase in August.
• The only industry group not declining
was mining. Within market groups, the
largest declines were recorded by
nonindustrial supplies (-0.9%) and
construction (-0.8%).
• On a yearly basis, production increased
by 5.4 percent, with Business Equipment
posting a noticeable 10.1 percent
advance.
• Industrial Production for Consumer
Goods decreased 0.4 percent from
August to September.
• The 10-year Treasury rate has been flat at
2.625 percent for the past three months,
a noticeable drop from the 3.375 percent
in January of this year.
• The long-term bond rate does not seem
to follow the Federal Reserve’s
intentions. However, it bodes well for
Economic Updates
Produced by NAR Research

5. Tuesday, 10/19/10
• Housing Starts increased in
September by 2,000 units on a
seasonally adjusted annualized
basis to 610,000 units. The increase
included a 19,000 unit increase in
single family home starts which was
offset by a 17,000 decrease in multi-
family starts. In particular, single
family starts increased by 24,000
units in the northeast in September.
• Despite a strong September for
single family home starts, the
overall trend suggests increasing
multi-family starts and declining
single family starts.
• On the whole, September housing
starts of 610,000 in September
remain well below the natural
replacement rate of 1.5 million units
per year. This has the effect of
detracting from economic output
and depressing unemployment, but
keeps additional inventory from
competing with existing homes for
sale.
Economic Updates
Produced by NAR Research

6. Wednesday, 10/20/10
• Mortgage purchase applications
fell 6.7 percent for the week
ending October 15th
. Purchase
applications do not take into
consideration cash buyers who
according to the August
REALTORS® Confidence Index
make up as much as 28 percent of
transactions. The data was not
adjusted for Columbus Day.
• Mortgage purchase applications
were down 36.9 percent from the
same week a year ago.
• The government portion of the
index (FHA loans) was down 5.9
percent. New FHA regulations
went into place at the beginning
of the month.
• Refinances, which made up 82.4
percent of mortgage activity, were
down 11.2 percent as mortgage
rates rose to 4.34 percent on a 30-
year fixed mortgage.
Economic Updates
Produced by NAR Research

7. Thursday, 10/21/10
• Jobless claims for the week of
October 16 show some
improvement in the job market,
still more improvement is needed.
Given the short last week due to
Labor Day, data for some states
needed to be revised and showed
13,000 more initial claims. This
week, claims fell by 23,000 to end
at 452,000. The four-week average
is also down 4,250 to 458,000.
Continuing claims remain trending
down as well with 9,000 fewer
claims for the four-week average
ending October 9. This is a
combination of new hiring but also
expiration of benefits. The
unemployment rate for insured
workers remains at 3.5 percent.
Economic Updates
Produced by NAR Research

8. Thursday, 10/21/10
(cont’d)
• A separate report on the leading economic index (LEI) shows a modest rise of 0.3
percent. The LEI is a weighted measure of ten separate indicators. Five of the ten
indicators showed growth: interest rate spread, average initial jobless claims, real
money supply, stock prices and manufacturers’ new orders for consumer goods and
materials. Negative pull came from the index of supplier deliveries, building permits
and the index of consumer expectations.
• The Beige Book released Wednesday by the Federal Reserve indicates that the
economy is growing, albeit very timidly and unevenly across the county. Seven of the
Fed's 12 regions reported moderate improvements in business activity. Philadelphia,
Richmond and Cleveland described their economic activity as mixed or steady. Only
Atlanta and Dallas suggested their economic growth was slow.
Economic Updates
Produced by NAR Research

9. Friday, 10/22/10
• On Wednesday, we reported that the MBA
data showed a slight increase in mortgage
rates. Data collected and released by
Freddie Mac also showed a slight uptick in
fixed rate mortgage rates, from 4.19 to 4.21
for the 30-year FRM.
• There are several factors that affect interest
rates including mortgage rates, and you can
find a full discussion in Lawrence Yun’s Real
Estate Insights article this month. In this
update, we call your attention to the
difference in the monthly payment for an
owner with a mortgage at this week’s 4.21
percent versus 5.06 percent, the mortgage
rate Freddie Mac reported for the week
ending 4/29 when contracts had to be in
place for tax-credit buyers.
• Buyers who borrow $100,000 to purchase a
home save more than $50 a month and $600
a year at the current rate compared to the
April rate. This savings translates into
$8,000 in 13 years. Buyers borrowing
$200,000 for their home purchase save
more than $100 a month, $1,200 a year, and
save $8,000 in six years.
Economic Updates
Produced by NAR Research

10. Friday, 10/22/10
• On Wednesday, we reported that the MBA
data showed a slight increase in mortgage
rates. Data collected and released by
Freddie Mac also showed a slight uptick in
fixed rate mortgage rates, from 4.19 to 4.21
for the 30-year FRM.
• There are several factors that affect interest
rates including mortgage rates, and you can
find a full discussion in Lawrence Yun’s Real
Estate Insights article this month. In this
update, we call your attention to the
difference in the monthly payment for an
owner with a mortgage at this week’s 4.21
percent versus 5.06 percent, the mortgage
rate Freddie Mac reported for the week
ending 4/29 when contracts had to be in
place for tax-credit buyers.
• Buyers who borrow $100,000 to purchase a
home save more than $50 a month and $600
a year at the current rate compared to the
April rate. This savings translates into
$8,000 in 13 years. Buyers borrowing
$200,000 for their home purchase save
more than $100 a month, $1,200 a year, and
save $8,000 in six years.
Economic Updates
Produced by NAR Research