Housing Prices Lead Recovery, but Permits Still Lag

Housing prices led overall U.S. economic health at the end of 2016 on the NAHB/First American Leading Markets Index (LMI), but that recovery is uneven in its underlying components, the report found. In Q4 2016, when the overall LMI score reached .99, house prices were the only component considered recovered, at 1.47. The level considered normal is 1.0. The component closest to being recovered is employment, at .98, but single-family permits are furthest from normal, at .52, the report found. The Q4 overall index of .99 was .01 higher than its level in the Q3, and up .05 from Q4 of 2015. But, as it has done steadily since its doldrums in early 2012, when the index was at .78, the index of overall U.S. economic health is improving.

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