Markets have gained modestly even as permits fall

Housing markets and economic activity continue to post modest gains according to a new report from the National Association of Home Builders

Markets have gained modestly even as permits fall
Housing markets and economic activity continue to post modest gains according to a new report from the National Association of Home Builders.

Its Leading Markets Index in association with First American shows that the fourth quarter of 2017 saw a continued gradual upward trajectory, even though permit issuance remained weak.

“While the home price appreciation and employment components of the LMI are at healthy levels and continue to expand, we are concerned with the sluggish permit activity,” said NAHB Chief Economist Robert Dietz. “The weak permit numbers indicate that builders may be hesitant to start projects as they contend with supply-side hurdles, such as rising material prices and labor shortages.”

Overall, 195 of the 337 metros nationwide were at or above their normal levels of economic activity in the last three months of 2017, rising from 170 metros a year earlier. There was year-over-year improvement in 82% of markets.

With home price indicators soaring to 158% of normal activity and employment at 98%, permits are well behind at just 56%.

“The number of markets on this quarter’s LMI at or above 90% has risen to 274 — more than 81% of all metro areas,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company, which co-sponsors the LMI report. “This shows that the overall market continues to make modest, but consistent gains.”

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