Economic outlook Up next for the markets: October 17 - October 21

The state of the real estate market will become clearer this week with several housing-related data points scheduled for release. Investors will be paying close attention given mortgage rates and home prices continue to rise, pushing more would-be buyers out of the market.

First out of the gate is the NAHB/Wells Fargo Housing Market Index for October. This leading economic indicator tracks new homes hitting the market as well as potential buyers. This area of the market has been under pressure for several months. Inflation remains high, home prices are elevated and more rate hikes are likely. That’s weighed on builder optimism, a trend that figures to continue.

Also on the agenda this week are housing starts and building permits, which track activity in terms of real estate construction. If the numbers are up, it signals the housing market is expanding. If it's down, it means it's contracting. Existing home sales, which are released Thursday, is another key data point investors will be studying. Existing home sales declined for the seventh-straight month in August. More of the same is expected for September.

Rounding out the economic news for the week is jobless claims. Despite a slowing economy, the job market remains tight.

Monday, October 17

There is no key economic data scheduled to be released.

Tuesday, October 18

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index for October is on tap. This is a monthly survey of home builders concerning the state of the single-family housing market. It tracks sales of new homes and traffic from prospective buyers. For several months, the housing market has been under pressure as the Federal Reserve raises interest rates to tame inflation. That increases the amount homeowners pay for their mortgages, pressuring demand. Builders are also dealing with high supply costs and elevated home prices, which is hurting builder optimism. In September, the NAHB housing market index came in at 46,¹ the ninth month in a row of declines.

Wednesday, October 19

Housing starts for September will be issued. This economic data point, released by the U.S. Census Bureau, measures the number of new residential construction projects that start in a given month. It's a key indicator as to the state of the economy, giving investors insight into how demand is tracking. In August, amid a brief decline in mortgage rates, housing starts increased 3.4%.² It was only the second time they rose in 2022. Since then, mortgage rates are up, and home prices remain elevated, pushing more would-be buyers out of the market.

Also Wednesday, building permits for September will be issued by the U.S. Census Bureau. This provides investors a snapshot view as to whether building activity is expanding or contracting. If building permits increase it's an indicator of economic growth. In August, building permits fell 10% to nearly 1.52 million.³

Thursday, October 20

Existing home sales for September are issued by the National Association of Realtors. Another real estate-focused data point, this tracks how many sales of existing homes are inked during the month. In August, existing home sales fell for the seventh-straight month. Meanwhile, home prices increased 7.7%.⁴ Demand is expected to move lower in September amid higher mortgage rates and still-elevated home prices.

Also Thursday, initial and existing unemployment claims for the previous week are released by the Labor Department. This weekly data point tallies the number of people filing for unemployment benefits and those who are continuing to collect. For the week ending October 6, jobless claims increased 29,000 to 219,000.⁵ This was higher than expected and could show the labor market is starting to cool, something investors will be closely monitoring.

Friday, October 21

There is no key economic data slated for release.