National Association of Home Builders economist Michael Neal reports that countrywide economic and housing recovery continues at a slow but steady pace, according the NAHB/First American Leading Markets Index (LMI), which the NAHB released today.
The index uses single family housing permits, employment, and home prices to measure proximity to a normal economic and housing market. The LMI rose to .94 in the fourth quarter of 2015, which is up .01 from the third quarter of that year, and up .04 year over year. A value of 1.0 indicates that the market or country has returned to its last recorded level of normalcy.
Nationally, all three components of the LMI contributed to the 4-quarter growth in the nationwide score, .04 point to .94, but only house prices and permits contributed to the quarter-over-quarter increase, .01 point, as the employment component of the LMI was unchanged over the last 3 months. Over the year, the house prices component increased from 1.32 to 1.38, 1.37 to 1.38 over the quarter, the permits portion rose from .44 to .48, .47 to .48 over the quarter, and employment rose from .95 to .96, remaining unchanged over the quarter. Regionally, 117 of the 337 markets, 35%, have an LMI Score that is greater than or equal to 1.0 and are considered normal.