(from our Leading Indicator Watch from March 5th, 2015)
Our leading indicator for US house prices is supportive of an improvement in price growth.
One of the inputs that drives our leading index is the number of months’ supply of new homes. The continued fall in months’ supply of homes is very positive for house prices. The US has worked off the excess supply of homes following the housing crisis, and months’ supply are now in a normal range of less than five months.
(Post Script: Just released today was the Case-Shiller Composite-20, showing a greater than expected 5.03% YoY growth in US house prices.)