NAHB said third-quarter figures show gradual growth in housing across the US
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Economic and housing activity improved in more metro areas in the third quarter, with 197 of 337 markets returning to or exceeding previous normal activity levels, according to the Leading Markets Index (LMI) released by the National Association of Home Builders (NAHB) and First American.
The increase represents a net gain of 40 markets on a year-over-year basis.
The index score for the whole US rose to 1.03, which means that on average, markets are running at 103% of normal economic and housing activity. The figure is based on permit, price, and employment data.
NAHB and First American said individual components of the index show different stages of recovery. Employment and home price levels are at 99% and 155% of normal activity, respectively. However, single-family permits are only at 56% of normal activity.
In spite of weak permit activity across the nation, the index revealed improvements in the component. The number of markets at or above normal permit activity levels increased to 70, an increase of 6% from the previous quarter. According to index data, permits have recovered losses earlier in 2017, but continue to be the weakest index component.
“This report indicates that housing is growing at a gradual pace in markets nationwide, even as many parts of the country continue to recover from the recent hurricanes,” NAHB Chairman Granger MacDonald said. “Continued job growth and increasing household formation should help the housing market make additional gains as we begin to close out 2017.”
“Home-price appreciation remains the strongest component of the HMI, and strong employment numbers also bode well for the continued growth of the housing sector,” NAHB Chief Economist Robert Dietz said. “While permits continue to inch upward, they remain the weakest element of the index and show that builders need to manage supply-side hurdles, such as rising material prices and labor shortages.”
Related stories:
Single-family permit activity lags in housing activity index
Single family permits remain subdued despite recovery
The increase represents a net gain of 40 markets on a year-over-year basis.
The index score for the whole US rose to 1.03, which means that on average, markets are running at 103% of normal economic and housing activity. The figure is based on permit, price, and employment data.
NAHB and First American said individual components of the index show different stages of recovery. Employment and home price levels are at 99% and 155% of normal activity, respectively. However, single-family permits are only at 56% of normal activity.
In spite of weak permit activity across the nation, the index revealed improvements in the component. The number of markets at or above normal permit activity levels increased to 70, an increase of 6% from the previous quarter. According to index data, permits have recovered losses earlier in 2017, but continue to be the weakest index component.
“This report indicates that housing is growing at a gradual pace in markets nationwide, even as many parts of the country continue to recover from the recent hurricanes,” NAHB Chairman Granger MacDonald said. “Continued job growth and increasing household formation should help the housing market make additional gains as we begin to close out 2017.”
“Home-price appreciation remains the strongest component of the HMI, and strong employment numbers also bode well for the continued growth of the housing sector,” NAHB Chief Economist Robert Dietz said. “While permits continue to inch upward, they remain the weakest element of the index and show that builders need to manage supply-side hurdles, such as rising material prices and labor shortages.”
Related stories:
Single-family permit activity lags in housing activity index
Single family permits remain subdued despite recovery
