Economic Momentum is Strengthening Home Buyer Demand:

The housing market has been steadily growing and now has the potential to grow even more as mortgage rates remain low and have just ticked upward off of their one-year lows and credit is starting to loosen.

But what is ultimately driving demand is the strength in the labor market and related improvements in consumer attitudes.

Jobless claims in October remained beneath 300,000: The last month that averaged under 300,000 weekly claims was June 2000 (almost a 40 year low). Continuing claims were last this low at the height of the housing boom.

Consumer confidence and consumer sentiment are both now at seven-year highs.

The first estimate of the third quarter GDP indicated the economy expanded 3.5% as all sectors including government spending contributed to growth. The condition of the U.S. economy is clearly improving.

In every year of this recovery we’ve seen growth fade as we reached the fourth quarter.  But this time it may be different as almost all the fundamentals are much healthier. Jonathan Smoke, Realtor. com's chief economist, expects to see solid employment numbers for October this week and more positive momentum to carry the housing market through the winter.

Is Your Home Ready to Keep you Warm?

The crisp snap of autumn weather is a reminder that even colder days lie ahead. Get ready for them by performing a few simple chores now that will keep you toasty all winter long.

Install weatherstripping
Weatherstripping can save you up to 20 percent on heating bills — especially if you have drafty windows or doors. Plus, it’s quick and easy, and doesn’t cost a lot of money. Place weatherstripping along doorjambs and in the gaps between windows and sashes to keep chilly breezes out and heat in.

Fix drafty doors
If your doors need extra draft protection, add a door sweep along the bottom. These flexible rubber strips seal the gap at the bottom of the door to keep howling winds at bay. If cold air is still getting in, buy or DIY a door snake — a tube of fabric filled with sand, rice, or other material — to lay on the floor and plug the gap.

Add insulation
The attic and basement are two spots where you can lose a lot of heat. By insulating your basement ceiling and attic floor, you can prevent warm air from escaping the house. Also check around the exterior of your house for cracked foundation, gaps or cable holes, and seal them or fill them with spray foam insulation.

Check your furnace
Like any piece of machinery, your furnace works better if it’s properly maintained. Some utility companies offer a free annual checkup for your furnace, but if yours doesn’t, it may be worth paying a technician to ensure that your furnace is in top condition. But you can also improve your furnace’s performance with simple maintenance that you can do yourself, like replacing filters and cleaning registers.

Swap your thermostat
Standard thermostats can lead to wasted energy. If you opt for a smart thermostat like the Nest, you could cut down on your energy use — and your utility bills. Among other features, these smart thermostats can sense when you’re away and automatically adjust the temperature to save you money.

Seal ducts
If you have forced-air heat, leaks in your ducts could be costing you hundreds of dollars. Seal them with specially designed metal tape and keep your ducts — and your wallet — more secure.

Embrace fabrics
While a cool tile floor might feel nice underfoot in summer, it’s not so appealing when it’s sub-zero outside Cover your floors in throw rugs and runners for the winter months. You can also hang heavy insulating drapes in front of your windows to keep warm air in and the cold out where it belongs.

A New Group of First Time Homebuyers is on the Horizon:

The American dream is still alive as Teens overwhelmingly think that they will own their home.

A new survey found that American teens overwhelmingly think that they will be home owners—a far cry from millennials who were much less sanguine about their fortunes in an earlier study.

The study, conducted for real estate service Better Homes and Gardens Real Estate, found that 97 percent of those ages 13-17 believe they will own a home in the future. Compared with the 40 percent of millennials who said in an earlier Better Homes study that they expected to buy a home in the near term, these new figures prove that the younger generation may be more attached to the notion of home ownership.

This means that the next generation to reach adulthood will bring about 21 million hopeful home buyers to the market. For reference, just over 5 million existing homes were sold in 2013, according to the National Association of Realtors.

Lest anyone suggest that the survey's respondents are unaware of what it takes to be a homeowner, the study also found that the average teen has an impressively accurate understanding of the price of a home: Of the 97 percent who said they would own a home, they estimate paying on average $274,323 for their first one. The median cost of a new home in June was $273,500, according to the U.S. Census Bureau.

Not only are teens significantly optimistic about their home buying, but 82 percent also said home ownership is the most important part of the American Dream, according to the survey. Way to go teens!

Housing Could Rise Even Further This Fall:

Autumn is historically the start of the slow season for home sales, but after a good spring and summer, wrought with still-tight supply and higher costs, the stage may be set for another small pick up in U.S. housing this fall, at least according to a new report.

More sellers are lowering their price expectations, because the number of homes that sold above list price in July was down nearly 26 percent from a year ago, noted in the report. That is the biggest drop of the year. Lower prices, still-low mortgage rates and increasing supply could push sales higher.

Twenty-seven percent of homes sold above their list price a year ago, compared with 20 percent this July. Home prices rose 7.4 percent nationally in July from a year ago, according to CoreLogic, but the gains have been shrinking steadily. That includes sales of distressed homes, which are slowly becoming a smaller share of the market. It is the 29th straight year-over-year gain in prices. 

With Consumer Confidence increasing, interest rates very low and more supply of homes entering the market at more realistic prices - the stage is set for more units across the U.S. to move.

Underwater Homeowners Actually Helping Home Values:

One of the biggest barriers to an even more robust recovery in the housing market is a lack of supply. There are simply not enough homes listed for sale to meet the demand—and part of that is because a growing number of home buyers are not selling their previous homes.  Lack of inventory and steady demand have kept home prices moving upward.

"As people are starting to move, they're also turning into landlords by choice. And that is definitely having a dent in the inventory numbers," said Nela Richardson, chief economist at Redfin, a real estate brokerage. "Our agents are seeing people come through their door with the cash in hand to buy that next place. A lot of them obviously don't need that equity in their former home, or they're able to tap some of it out and then use it to buy the next place."

It's a strange new irony in housing. Lack of supply is driving prices higher, which is pricing some demand out and driving up rental demand.

For others, however, the rise in home prices is providing useful equity to buy another home while still holding on to their old home, which is then providing lucrative rental income.

There are no hard numbers as to how many buyers are holding on to their previous properties, but there is plenty of anecdotal evidence, especially as rental demand and rent rates continue to surge.

So, instead of underwater homes hurting the housing market they are driving up rental rates and home prices.

Un-advertised Listings Distort Housing Inventory:

The number of homes listed for sale nationally is finally beginning to rise, but ask anyone looking to buy a home and the majority will complain there is nothing out there. Neighborhood to neighborhood, market to market, supply still seems tight, despite a 6.5 percent increase in listings from a year ago, according to the National Association of Realtors. 

"Statistically it appears that we are getting back to very balanced market conditions," said Lawrence Yun, chief economist for the Realtors. "However, the sentiment out there is that we still have a shortage of inventory, and I think that is due to the prevalence of pocket listings in some markets."

A so-called pocket listing is when the real estate agent signs a listing agreement with a seller but does not advertise it widely or put it in a multiple listing service, where other agents and buyers can see it. Instead, they circulate the listing only among their own buyer clients or within their own brokerage. That way they can potentially get commissions on both buyer and seller sides, and would not have to split commissions with other selling agents.

No hard numbers exist on pocket listings so their rise and fall comes anecdotally from Realtors. Pocket listings are not illegal.

The incentive for a seller to do a pocket listing could be that they need to sell the home quickly and don't want to go through a wide marketing plan with multiple showings and open houses. The agent is promising the seller that they know of enough potential buyers personally that they can get a deal done fast. This usually happens when the market is very tight, and buyers are willing to make larger offers up front to negate the risk of a bidding war. 

Millennials Key To Next Wave of Purchases:

Just 36% of Americans under the age of 35 own a home, according to the Census Bureau. That's down from 42% in 2007 and the lowest level since 1982, when the agency began tracking homeownership by age.

It's not all their fault. Millennials want to buy homes -- 90% prefer owning over renting, according to a recent survey from Fannie Mae.

But student loan debt, tight lending standards and stiff competition have made it next to impossible for many of these younger Americans to make the leap.

"When we surveyed Millennials they cited several barriers to homeownership, especially access to financing," said Steve Deggendorf, a senior director for Fannie Mae. Many Millennials simply can't come up with the hefty 20% down payments. Others don't have good enough credit to qualify for loans.

There is a ray of hope for young wanna be homeowners, said Fannie Mae's Deggendorf. "Mortgage lending is getting a little less tight, with lenders approving buyers with a little lower credit score and who have less of a downpayment," he said.