The Composite Index of Leading Economic Indicators is composed of 11 data sets, one of which is new housing permits data. Because of the delayed transactions, many housing statistics are considered lagging indicators, yet building permits are largely assessed by economic leaders because they can identify key patterns and trends for forecasting market activity.
WHY IS HOUSING MARKET DATA IMPORTANT?
There is no place like home to analyze the economy! According to industry reports, the U.S. housing market is worth more than $43 trillion as of 2022. Because homes are a large investment, they cause a ripple effect in economic activity including labor/employment as well as general construction, energy, technology, and many other key industries. Housing trends are directly connected to consumer spending, which accounts for nearly 70 percent of the economy. All to say – our industry is a vital piece of our economic health.
NATIONWIDE TRENDS
- New home sales are up 23.8% from a year ago
- The value of new residential construction projects in the United States were an estimated $881 billion in 2022, a 12% increase from 2021.
- In March 2023, 12.9% more housing units were completed compared to March 2022.
- Builder confidence increased for the seventh straight month, posting a one-point gain to 56 in July.
BRINGING DATA TO THE LOCAL LEVEL
So, what does all this data mean for our local homebuilding industry? We shared the first State of the Industry (SOI) Letter in the fall of 2021 with the hope that it would serve as a valuable resource as our members faced supply chain issues, price increases, and other systemic challenges. Since then, we’ve continued to craft and provide updated SOI letters to address the current home building landscape and industry sentiment to be a leader and beneficial asset for our membership and consumers in our market. These letters, and the initiatives that have followed, have seen outstanding results and solidify the significant impact and value these resources have for our organization.
The high level of engagement with BAGI’s State of the Industry letters, along with the market updates and presentations, demonstrates the importance of fostering an environment where industry professionals can exchange valuable information – a movement we are proud to be at the forefront of. This is vital information that our members and local Hoosiers need to read and we are proud to see that they are actively engaging with it. It is these efforts that will help lead us to see continued growth, strength, and success as the market landscape continues to change.
SCAN THE QR CODE to read our June State of the Industry letter for information on the underlying causes of this market slowdown, including the impact of interest rate spikes and consumer hesitation in purchasing new homes.
