Report: Housing Sector Should Remain Growth Source

The coronavirus outbreak is disrupting economic activity, but the national Leading Index of Healthy Housing Markets projects the housing sector should remain a growth source for the economy.

In its Health of Housing Markets report, Nationwide, Columbus, Ohio, said the positive Leading Index of Healthy Housing Markets outlook is due to strong underlying housing demand factors, including above-trend household growth, solid job gains and low mortgage rates. [The report was completed before the coronavirus threat worsened in recent days.]

The national LIHHM equaled 106.1 at year-end 2019, the sixth straight quarterly gain for this metric. Demand factors driving the positive outlook included low mortgage rates, above-trend household formations, the lowest unemployment rate in 50 years and rising incomes. The serious delinquency rate has declined in each of the last six quarters to below 2.0 percent. House price gains accelerated in response to homebuyer demand with existing home sale supply levels very tight.

“Still, price growth remains near the long-term average and, with low mortgage rates, is keeping housing affordability positive,” the report said.

Regionally, well over half of the LIHHM performance rankings were positive. Household formations have increased regionally while unemployment rates remain low, supporting housing demand in most metros across the country.