Housing Gains Advance Leading Index; Experts Urge Caution

The housing market accounts for much of the gain, but it's unclear which houses are most responsible.

House for rent

Photo: Indiana Public Media

Realtors say they're not sure whether new or existing home sales will play a larger role in the state's economy.

The Leading Index for Indiana – which attempts to show how the state’s economy is faring by focusing on those metrics which matter most to Indiana — saw a slight increase in August.

Indiana Business Research Center Director Tim Slaper says the slight increase is due to a rise in “homebuilder sentiment.”

“And as it happens, the Midwest component of that index really shot up as well. So one might think that the Midwestern homebuilders are feeling a little bit more optimistic about their prospects for the future,” said Slaper.

But Slaper adds most other components of the index were essentially flat.  Greg Cooper with Prudential Realty in Indianapolis urges caution when examining the housing sector.

“It‘s not that I don‘t want the homebuilders to do well, it‘s not that we don‘t understand how important homebuilders are to creating jobs in our economy, it‘s just that I don‘t think we know yet where exactly it‘s going to fall as far as new home construction versus resale homes as to what the biggest proponent of our economy is going to be right now,” Cooper says.

Cooper does say sales of previous occupied homes in the Indianapolis area have increased dramatically in the last two years.

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