Housing Barrels Forward in First Half of Year, Leaving Permits Behind

Housing barreled forward from the first quarter to the second quarter of 2017, with gains recorded in roughly 300 markets measured in the latest National Association of Home Builders (NAHB)/First American Leading Markets Index (LMI). Markets overall are at an average 102 percent of normal activity, with “normal” tied to activity recorded from 2000 to 2003. Employment is at 98 percent of normal activity, and home prices are at 152 percent of normal activity. Single-family permits are only at 54 percent of normal activity.

“This report shows that the housing and economic recovery is widespread across the nation and that housing has made significant gains since the Great Recession,” said Granger MacDonald, chairman of the NAHB, in a statement. “However, the lagging single-family permit indicator shows that housing still has a ways to go to get back to full strength.”

The market with the highest score, or most improvement, in the Index is Baton Rouge, La. Austin, Texas; Honolulu, Hawaii; Provo, Utah; and Spokane, Wash., also showed significant progress.

“The overall Index is running above 100 percent of normal largely due to healthy home price appreciation,” says Robert Dietz, chief economist of the NAHB. “At the same time, the reason why single-family permits are barely halfway above normal is because builders continue to face persistent supply-side headwinds, including rising material prices and a shortage of buildable lots and skilled labor.”

Source: National Association of Home Builders (NAHB)

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