The University of San Diego Burnham-Moores Center for Real Estate’s Index of Leading Economic Indicators rose 0.4 percent in February, compared to the month before, to reach the highest level in 11 years, Professor Alan Gin said Thursday.
The increase, the fourth in a row, was led by strong gains in consumer confidence and the outlook for the national economy, Gin said.
The index reached 142.6 last month, the highest since a 142.7 was recorded in March 2006. By comparison, the recession-era low was 100.7 in March 2009.
The only negative of six components in February was the number of residential building permits issued by local governments, which fell sharply for the second month in a row.
The overall index has gone up four straight months.
The professor said five components performing well “suggests that the local economy is picking up steam and is expected to do better than what had previously been expected.”
A potential trade war or further interest rate hikes by the Federal Reserve could raise questions, he said. He pointed out that the Fed is expected to increase rates by a further 50 basis points by the end of the year.
“While this will put more money into the hands of savers, a big question is how this will affect borrowers, particularly in the housing market,” Gin said. “Local building permit activity is already down considerably this year, and an increase in interest rates is expected to slow the single-family (housing) market.”
Only 193 multi-family units have been authorized this year compared to the 1,545 that were permitted last January and February, he said.
—City News Service
