The National Association of Homebuilders reported its third straight month of improvement in its homebuilder confidence index, even though permits for new housing construction were down nearly 8% year over year.

Pending home sales, a leading indicator for the existing home market, rose nearly 7.5% in September – much more than expected.

It’s all about expectations. Mortgage rates fell in anticipation of the Fed cutting interest rates. But then came the strong September jobs report.

In a competitive housing market, buyers are forgoing their right to an inspection, or the right to walk away from a property if it’s not in good condition.

August’s personal consumption expenditures index clocked in at 2.2%. That’s down from July, but the housing category is one of the slowest to cool.

Many are paying interest rates well below today’s.

It all depends on what happens with home prices.

But they come with some caveats.

Both supply and demand for housing are increasing. The trajectory of home prices will depend on whether supply or demand grows faster.

The federal funds rate, set by the Federal Reserve, is just the first layer that goes into determining mortgage rates.