A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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May 08 2014

Home Price Cycle Clarified

Over a year ago, based on a cyclical downturn in the growth rate of our U.S. Leading Home Price Index (USLHPI), we concluded that real home price growth prospects had dimmed, and therefore, real home price growth would moderate in the months ahead. In contrast, only in recent months has this prospect dawned on the consensus, along with the realization that, given the slowing pace of home price growth, housing might not provide as much support for the economy as earlier hoped.

Going forward, to avoid being taken by surprise, it is crucial to monitor the USLHPI to anticipate changes in the home price outlook.

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