b'THE OFFICIAL NFBA MAGAZINEMay 2023 Published by ITR Economics A Closer Look: The US EconomyGreen Shoots in the Housing Market ALAN BEAULIEUWhat you need to know: Activity in the housing market bodes well for housing starts late this year and into 2024, and for macroeconomic recovery in 2025US New Homes Sold are recovering, potentially signaling a new rising trend in US Single-Family Housing Starts late this year. A rising trend ECONOMIC UPDATEin Single-Family Housing Starts in 2024 would be a strong signal for the late 2024/early 2025 macroeconomic recovery that ITR Economics is forecasting.GOING DEEPER1.Quarterly New Homes Sold are recovering.2.The seasonal rising trend is, thus far, about average.3.ITR Checking Points signal that the tentative February 2023 low in the annual rate-of-change may hold.4.Verification of the sustainability of the annual rate-of-change low is a month or more away; look for a confirmed low to signal theanticipated broader improvement in the housing industry.Improvement can also be seen in US Existing Home Sales, a dataset published by the National Association of Realtors. So far, the strength of rise in quarterly Existing Home Sales is about average. The quarterly rate-of-change has established a tentative low, but the annual rate-of-change remains in decline. SUPPORTING CASTUS Single-Family Housing Permitso The seasonal rising trend in Permits to date is stronger than the post-2000 norm.o The quarterly rate-of-change is in a nascent rising trend.US Existing Single-Family Home Inventoryo Monthly Existing Single-Family Home Inventory (dataset published by the National Association of Realtors), is at nearly half thepre-COVID five-year average.o Low inventory and improving sales should encourage builders.US New Homes for Saleo The first-quarter drop in New Homes for Sale was steeper than normal, and the quarterly rate-of-change is also moving lower.o A continuation of the declining trend will spur builders to action, given the encouraging input from New Homes Sold.US Pending Home Sales Indexo The Pending Home Sales Index, published by the National Association for Realtors, posted the third-best fourth-to-first-quarterrise on record.o The quarterly rate-of-change is in a rising trend off a probable low.o More rise is expected in the Pending Home Sales Index, which should boost new construction activity.o First-quarter rise was uneven across the country; the South posted a steeper-than-normal rise, the West posted a steep-but-still- normal rise, the Midwests rise was barely normal, and the Northeast had a milder-than-normal ascent. BOTTOM LINEThe housing market is showing early signs of recovery. A continuation of the positive trends discussed above, such as Permits and Pending Home Sales, bodes well for the housing industry in 2023-24 and therefore the general economy in 2025.ITReconomics.com 2023 All Rights Reserved 436 / FRAME BUILDER - MAY2023'