The recently released NAHB/First American Leading Markets Index (LMI) rose to .98 in the third quarter of 2016, indicating that the U.S. is nearing recovery.
NAHB Eye on Housing reports that the index is up .01 from last quarter and .05 from a year ago. A score of 1.0 means the market is back to the last level of normality.
The index, which is calculated for the nation as a whole and for 337 separate local markets, is based on single-family housing permits, employment, and home prices. Four out five metro areas have an LMI Score at or above .87, and three-fifths have a value at or above .95.
However, the three underlying components of the LMI are at widely different stages of recovery. Nationwide, house prices have surpassed normal levels, employment is near normal, but permits are the laggard.