NEW YORK (TheStreet) -- The housing market got all kinds of pretty-good news last week, but the great news is still to come. The data included a small jump in September new-home sales and total building permits running at an annual rate of 1.02 million, up about 10% from last year. Existing-home sales jumped too, and are running at an annual pace that is half a million sales higher than last winter. We've needed looser credit to get housing moving, and that is apparently coming too: The federal agency that regulates Fannie Mae and Freddie Mac aannounced two key changes last Monday. Must Read: Warren Buffett's Top 10 Dividend Stocks "It should all have an impact, but it won't lead to a rush,'' Moody's Analytics economist Cris deRitis says. Here's why. Three big things still need to happen before housing news gets really good. Happily, at least two are likely to happen soon. Even the third one is looking up, with better news on wage growth released Friday. First, job growth needs to pick up, especially for 25- to 34-year-olds. Just 75.9% of people in this prime home-buying age are working, says Jed Kolko, chief economist at Trulia.com. That's about halfway back to the prerecession peak. Because the average first-home buyer is 31, jobs for this group matter a lot. The good news: Job growth is strong and accelerating slightly. New claims for unemployment insurance are the lowest since 2000, letting the 226,000 average monthly job gain this year pull unemployment down rapidly. Moody's says employers are likely to add 265,000 jobs in October. Numbers like that would pull joblessness to the mid-5% range by the end of this year. Must Read: European Banks Aren't Nearly as Bad Off as Stress Tests Indicate Second, credit has to get easier, and it probably will. Tight credit has held back the housing recovery, especially compared to the robust bounce in car sales, which have ridden very easy credit. The average credit score for new loans purchased by Fannie Mae is still 744, well above the national average. Worse: According to Ellie Mae, even the average rejected mortgage borrower last month proposed an 18% down payment and had a score better than 40% of the population. With home prices stable to rising, 18%-down loans to customers with decent credit pose nearly no risk. Banks should do better. Here, some help is on the way. The federal agency that regulates Fannie Mae and Freddie Mac last week announced plans to clarify rules that let Fannie and Freddie make banks take back sloppily underwritten loans that later go bad, which banks argued made them wary of borderline borrowers. This adds some risk to the banking system, as critics argue, but up to a point, risk is good. Ask Ford or General Motors . Third, wages need to rise. While affordability is good by historic standards, small wage gains have been cutting into buyers' confidence, deRitis says. Fatter raises would help housing -- a lot. That said, wages have picked up in recent months. The Labor Department said Friday that median weekly earnings for workers climbed 2.5% in the last year, outpacing inflation by nearly a percentage point. The best reason to think they will accelerate more is that unemployment rates are now below 5.5%, the working definition of full employment, in 18 states. That translates into spot labor shortages and more leverage for workers, economist Joel Naroff says. Faster job growth will make wages rise faster, too. Must Read: Solar Economics May Be Too Good for BP to Pass Up in 2015 What does this mean for investors? It means that housing should keep improving next year. It may not be dramatic, though. DeRitis says new-home construction will rise about 10% in each of the next two years, staying way below prerecession peaks. In the short term, housing's continued softness means interest rates will rise slowly, if at all, so bond prices will stay high for a while. But 2015 data should improve for homebuilders such as PulteGroup and Ryland Group , which reported earnings last week. Some analysts says it's too soon to buy the builders, but the logjams holding back pent-up demand are being cleared. Buying is, on average, 38% cheaper than renting a place to live, Kolko says. Fundamentals like thoseapoint to a good 2015 for homebuilding stocks, which have dropped about 7% this year, as the labor market tightens. Maybe even a better 2015 than Wall Street thinks.a Must Read: A Visit to the Vanguard Mothership With the 'Bogleheads' At the time of publication, the author held no positions in any of the stocks mentioned. Follow @tim mullaney // 0;if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs"); // ]]> This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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