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Housing Markets Continue to Make Progress 08-18-16 | Economic News
Housing Markets Continue to Make Progress
Uplifting Data in Q2 Leading Markets Index


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Markets in 146 of 340 metro regions "have returned to or exceeded their last normal levels of economic and housing activity in the second quarter of 2016," the National Association of Home Builders said. This is a gain of 66 markets on a year-over-year basis.


The U.S. housing market continues to make strong strides on its road to recovery, as evidenced by second-quarter developments in 340 metro regions monitored by the National Association of Home Builders.

Markets in 146 of those metro areas have "returned to or exceeded their last normal levels of economic and housing activity in the second quarter of 2016," the NAHB said.

This represents a year-over-year gain of 66 markets, the NAHB said, data that the association has derived from its First American Leading Markets Index (LMI).

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"The index's nationwide score ticked up to .97, meaning that based on current permit, price and employment data, the nationwide average is running at 97 percent of normal economic and housing activity," the NAHB said. "Meanwhile, 91 percent of markets have shown an improvement year over year."

"This gradual uptick is in line with NAHB's forecast for a slow but steady recovery of the housing market," said Ed Brady, chairman of the NAHB. "With a strengthening economy, solid job growth and low mortgage interest rates, the market should continue on an upward trajectory throughout the rest of the year."

The LMI examines metro areas to identify those that are approaching and exceeding their previous normal levels of economic and housing activity, the NAHB said. Scores are applied to all 340 metro areas by taking average permit, price and employment data for the past 12 months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison.

Baby Boomers: A Group Not To Be Ignored
Dave Lowman, of Freddie Mac's Executive Perspectives blog, looked closely at the data from a survey of 4,900 homeowners age 55 and older, and a questionnaire in which respondents were asked about their financial confidence and housing plans.

From his analysis, he reached these conclusions: The Baby Boomer group is 67 million strong, 25 million of them plan to move at least one more time in their lives, and nine million plan to make such a change within the next four years.

"It's important that we, as an industry, better understand the changing face of those who are 55-plus because the decisions they make over the next five years will have a significant impact on the demand for housing and mortgage credit," Lowman said.

"Some of the strategies that can be used to address upcoming housing needs include providing flexibility to use retirement accounts as monthly income, making it easier to originate and sell condo loans, and reaching out to lenders to improve mortgage offerings," Lowman added.







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