The LegalShield Housing Activity Index, a leading indicator of housing starts and a component of the broader LegalShield Law Index, ticked down in March, but remains up 2.8% compared to a year ago.
While housing starts declined in February after surging to their highest level in a decade the previous month, they remain near post-recession highs. At the same time, new housing unit authorizations expanded 18% and housing permits are up 6.5% over the last 12 months.
“While rising interest rates may constrain new home construction to some extent, the combination of low inventories and high prices of existing homes for sale and the underlying strength of the U.S. economy point to stronger building activity in the near term,” explained James Rosseau, LegalShield’s chief commercial officer. “However, a key development to monitor is the growing likelihood of trade actions by the United States and its trading partners, particularly China, that could raise the prices of steel, aluminum, and lumber. If this occurs, it could lead to weaker construction investment and cause the LegalShield Housing Activity Index to stagnate or decline.”
The LegalShield Law Index reflects the demand for legal services among the company’s law firms in all 50 states. The Law Index is a suite of leading indicators of the economic and financial status of U.S. households and small businesses, and it also includes the Consumer Financial Stress Index, Real Estate Index, Bankruptcy Index, and the Foreclosure Index.
“Overall, consumers are in a good position right now,” added Rosseau. “Although rising consumer debt levels are a potentially worrisome trend in the medium term, LegalShield data, which are based on actual consumer behavior rather than perception, indicate that consumer financial health should remain robust in the months ahead.”
