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Housing Market Gradually Making Its Way Back to Normal

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Housing Market Gradually Making Its Way Back to Normal

The National Association of Home Builders recently released its latest NAHB/ First American Leading Markets Index (LMI), which showed both the economy and the housing market are slowly but surely working hard to reach a normal pace once again.

The index looks at each American metro area and measures how close it is to its last normal level across the following three components: single-family permits, employment and house prices. On a national level, the LMI saw an increase of .01 in Q3, up to .90 from .89 in Q2.

Out of the three components, two were responsible for the rise in activity. The single-family permit index increased from .43 to .44, which means total permits issued over the past quarter were at 44 percent of the last normal period, which was in 2000-2003. Home prices also increased to 1.3 from 1.27, meaning prices are 30 percent higher than the average in 2000-2003. Employment came in at .95 and was the only component that did not change, which means the past year’s average employment was at 95 percent of the highest employment levels of 2007.

Out of the 350 metro areas that are included in the LMI, 59 are valued at or over 1, meaning they have met and moved on from their last normal state. Seven metro areas were added to this list since the end of 2013.

Read the full article from NAHB here.

 

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