Part 5/9:
After construction activities are underway, subsequent changes in home prices emerge, which are frequently misconstrued as leading indicators. It is essential to clarify that home prices typically lag behind construction and employment trends, often leading to confusion regarding their predictive power.
To summarize, building permits and new home sales are clear leading indicators, while the levels of residential construction activity and employment serve as reliable cyclical economy metrics. These data points are instrumental in predicting the onset of recessionary conditions and operate in tandem with manufacturing trends.