What's going on?

There was a swathe of positive data out on housing this week � positive, that is, if you already own a home!

What does this mean?

Home prices in US cities rose more than expected in September. In fact, home prices in the 20 biggest US cities rose 5.5% in September versus last year�(San Francisco rose the most, followed by Portland � both more than 10%). Home prices are rising more quickly than wages which, on the whole, makes housing less affordable. Economists say that strong job growth (more jobs have been created, but wages haven�t yet increased much) and, perhaps more importantly, low interest rates (think cost of a mortgage) are propelling the strong housing market.

Why should I care?

1. The bigger picture: Mortgage rates are starting to rise. It looks like the US central bank (�the Fed�) is going to raise interest rates in December. That expectation is leading to higher mortgage rates already which, if it continues, could somewhat cool the housing market (although interest rates would probably have to go much higher before they had a significant impact on house prices).
2. For stocks: Strong housing data is good for certain stocks. Particularly, sales of new homes are good for builders such as Lennar. Home improvement retailers like Home Depot and Lowe�s also benefit�as people buy stuff for their new homes while existing homeowners feel better about �investing� in their current homes if they are rising in value.