BuildFax report suggests it could if conditions persist
An analysis of the US single-family homes market suggests potential for a wider economic downturn.
The BuildFax Housing Health Report for December 2018 found that the year-over-year rate of single-family housing authorizations, maintenance and remodeling volumes have all decreased.
“The potential for an economic downturn has been highly discussed over the past few months as more signals of a recession come into alignment,” said BuildFax CEO Holly Tachovsky. “We’ve been tracking single-family housing authorizations daily for a more granular understanding of whether a decline might be on the horizon.
The firm’s model uses 14 metrics to determine the likelihood of a recession and considered how those metrics have correlated to prediction of recession between 1961 and 2018.
It found that single-family housing authorizations have the highest recession correlation of the economic factors tested.
“We’ve also been monitoring interest rate activity, changes to home prices and housing supply growth to further gauge any impending shift in the economy. While this is only the second consecutive month of declining indicators, this shift is in stark contrast to the white-hot housing market that the U.S. has experienced since 2013,” added Tachovsky.
The key housing data
- Single-family housing authorizations decreased by 3.76% year-over-year.
- Existing housing maintenance volume decreased by 10.71% year-over-year.
- Existing housing remodel volume decreased by 15.64% year-over-year.