One Of The Great Leading Indicators For Housing Is Finally Breaking Out

las vegas housing

Photo: deror_avi, Wikimedia Commons

One of our favourite things to reach each weekend is New Deal Democrat’s roundup of the prior week’s high-frequency economic indicators. You should check it out here.In the past week we saw some concerning news on jobs (but not terrible), mixed rail traffic, decent consumer spending numbers, and perhaps good news on gas.

The most interesting part is what New Deal Democrat said about housing:

This week the monthly and weekly indicators together showed an important transition in the real estate market. Housing permits are THE leading indicator for that sector, and they have broken out of a 3 year bottom to the upside, now more than 200,000 units on an annual basis above their 2009 lows. The rapid turnaround in real estate loans by banks to the upside is also a leading indicator, confirming the story told by permits. That more and more price index series have turned up lends even more credence to the (relative) firming of the real estate market.

Here’s the chart that shows what he’s talking about here:


Photo: FRED

What’s interesting is that we’ve actually seen a lot of mediocre housing data lately.

For example, NAHB homebuilder sentiment was down in the last reading. Housing starts also badly missed expectations.

Same too with March: Just about every housing datapoint for the month was weak.

But that housing permitting chart is looking nice, and hopefully it augurs good things for the market as by definition permits lead actual activity.

Now for some ugly news on housing, see here >

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