According to data from Housing IntelligencePro, the El Paso, TX MSA leads all markets in terms of year-over-year gain in new home closings for metropolitan areas with at least 300 new closings in the third quarter.  With 43% more new closings in the third quarter of 2011 compared to a year earlier, El Paso was easily in first, followed by Boise City-Nampa, ID with a gain of 35% and is the only market in the top 5 not in the South.  Cape Coral FL, Charleston SC, and Nashville TN round out the top 5, although all of these areas saw fewer than 1,000 new home in the third quarter.  Houston-Sugar Land-Baytown, TX is number six, and the top large market with more than 4,700 new home closings in the third quarter, a gain of 19% over the prior year.  Nationwide, new home closings in the third quarter were off by 6% from a year earlier.

In broader economic news, sovereign debt issues in Europe continue to dominate financial markets.  With various recent domestic data being slightly better than anticipated, one may expect to see less volatile swings in equity markets, but the threat from a potential break-up of the Eurozone and accompanying global economic destabilization is overshadowing most every other piece of economic news.

On the economic calendar, be on the look out for housing starts and building permits data tomorrow (we don’t expect any substantial directional changes) and leading economic indicators on Friday.  Next week, there will be a good load of economic data to digest before the Thanksgiving holiday with GDP, personal spending and incomes, and existing home sales on tap.

The Economy
The consumer price index declined in October due to drops in transportation and energy costs.  Headline consumer prices posted a 0.1% drop from September levels on a seasonally-adjusted basis.  Core consumer prices, which economists watch as a closer indicator of inflation because it excludes often-volatile food and energy prices, increased 0.1% on a seasonally-adjusted basis.  On an unadjusted basis, headline CPI increased 3.5% from its year ago levels while core CPI increased 2.1% year-over-year in October.  This is the largest annual increase in core consumer prices since October 2008. However, the annual increase in headline consumer prices is back to their tamest levels since April.

First-time unemployment claims decreased by 10,000 to a seasonally-adjusted figure of 390,000 in the week ended November 5th from an upwardly revised figure of 400,000 in the previous week.  This is the third straight week that initial jobless claims have declined and the lowest they have been since early April.  First-time jobless claims have hovered around the 400K level for the past couple of months.  Initial jobless claims would have to remain at these levels or continue to inch lower going forward in order for the economy to experience any noticeable improvement in the labor market.

Housing Market
Homebuilder confidence continued to rise in November.  The National Association of Homebuilders' housing market index increased three points from the previous month to a reading of 20.  This is the highest the index has been since May 2010.  It is also the second straight month that the index has recorded a three-point gain.  Record-low mortgage rates, more positive news out of Europe which has helped boost stock prices and confidence, and improving economic conditions domestically were the main drivers behind November's gain.  All three component indexes also experienced increases in November.

In the week ending November 11th, the MBA’s seasonally-adjusted purchase index declined 2.3% from the previous week.  This is the first time in four weeks that the purchase index has experienced a decline.  Overall mortgage application activity this past week dropped 10.0% due to a significant decline in refinance activity along with a moderate decline in purchase activity.

National average mortgage declined from the previous week to 3.99% with an average 0.7 points in the latest Primary Mortgage Market Survey released weekly by Freddie Mac on November 10th.  This is the fourth straight week that rates have declined and the lowest they have been since the first week of October.  Mortgage rates remain historically low.  Rates have now averaged under 5.0% for 38 straight weeks.

For additional market-level data and analysis please visit our website at http://www.housingintelligence.com.  For more detailed information on  these and other indicators, please visit the following links: