LegalShield Index: Housing Market Poised For Rebound--But Potential Tariff Battle And Rising Interest Rates Could Weaken Construction Investment

ADA, Okla., April 9, 2018 /PRNewswire/ -- Released today, the LegalShield Housing Activity Index, a leading indicator of housing starts and a component of the broader LegalShield Law Index, ticked down in March, but remains up 2.8 percent compared to a year ago, suggesting there is reason for optimism regarding housing construction momentum in 2018. While housing starts declined in February after surging to their highest level in a decade the previous month, they remain near post-recession highs. At the same time, new housing unit authorizations expanded 18 percent and housing permits are up 6.5 percent over the last 12 months.

"While rising interest rates may constrain new home construction to some extent, the combination of low inventories and high prices of existing homes for sale and the underlying strength of the U.S. economy point to stronger building activity in the near term," explained James Rosseau, LegalShield's chief commercial officer. "However, a key development to monitor is the growing likelihood of trade actions by the United States and its trading partners, particularly China, that could raise the prices of steel, aluminum, and lumber. If this occurs, it could lead to weaker construction investment and cause the LegalShield Housing Activity Index to stagnate or decline."

The LegalShield Law Index reflects the demand for legal services among the company's law firms in all 50 states. The Law Index is a suite of leading indicators of the economic and financial status of U.S. households and small businesses, and it also includes the Consumer Financial Stress Index, Real Estate Index, Bankruptcy Index, and the Foreclosure Index.

The LegalShield Consumer Financial Stress Index edged down (improved) 1.0 point in March to 72.3, its lowest point ever, indicating that consumer financial health is strong and likely to remain so throughout the first half of 2018. Meanwhile, the Conference Board's Consumer Confidence Index decreased by 2.3 points in March to 127.7, falling off slightly after reaching an 18-year high the previous month. The decline was likely driven in part by recent tariffs on steel and aluminum and the increased threat of a trade war, but confidence remains historically strong. Other measures of consumer sentiment, including the University of Michigan's Consumer Sentiment Index, are also at or near multi-year highs, as one might expect in light of a strong labor market, upward wage pressures, improved global economy, and a likely boost to economic growth from recently-passed tax legislation.

"Overall, consumers are in a good position right now," added Rosseau. "Although rising consumer debt levels are a potentially worrisome trend in the medium term, LegalShield data, which are based on actual consumer behavior rather than perception, indicate that consumer financial health should remain robust in the months ahead."

Additional predictive takeaways based on the data through March:

• The LegalShield Real Estate Index, a leading indicator of existing home sales, suggests that home sales will likely remain muted in the short term.
• The LegalShield Foreclosure Index, an advance measure of foreclosure activity, suggests that foreclosures should remain muted in the short term.
• The LegalShield Bankruptcy Index, a leading indicator of monthly bankruptcy filings, continues to suggest that bankruptcies will remain subdued in the near term.

The five LegalShield indices closely track a handful of key economic indicators, such as the Consumer Confidence Index (developed by the Conference Board), Housing Starts (reported by the U.S. Census Bureau), and Foreclosure Starts (reported by the Mortgage Bankers Association). Each LegalShield index has undergone a battery of statistical tests to validate its relationship to an existing economic indicator that sheds light on the health and direction of the U.S. economy. LegalShield publishes the Law Index monthly, on the sixth business day of each month. Please contact Jacob Freedman at [email protected] for a copy of the economic assessment.

LegalShield Law Index Reoptimization

In advance of the one-year anniversary of the LegalShield Law Index, this month LegalShield reoptimized the Law Index using the latest intake data. This process included a reexamination of the statistical relationship between each of the LLI's five sub-indices and the macroeconomic indicators they were designed to track using the data through March 2018.

Based on this reoptimization process, LegalShield updated the standardization factors used in the Consumer Financial Stress Index and Housing Activity Index, as well as the seasonal adjustment factors used in the Housing Activity Index and Real Estate Index. In addition, LegalShield incorporated new areas-of-law related to consumer lending and billing inquiries into the Consumer Financial Stress Index, which, as demonstrated through rigorous statistical testing, strengthened the index's relationship with Consumer Confidence.

About LegalShield

A pioneer in the democratization of affordable access to legal protection, LegalShield is one of North America's leading providers of legal safeguards and protection against identity theft for individuals, families and small businesses. The 45-year-old company has more than 1,753,000 members that are covered by its legal and identity theft plans. IDShield provides identity theft protection to one million individuals. LegalShield and IDShield serve more than 141,000 businesses. Both legal and identity theft plans start for less than $25 per month.

LegalShield's legal plans provide access to attorneys with an average of 22 years of experience in areas such as family matters, estate planning, financial and business issues, consumer protection, tax, real estate, benefits disputes and auto/driving issues. Unlike other legal plans or do-it-yourself websites, LegalShield has dedicated law firms in 50 states and four provinces in Canada that members can call for help without having to worry about high hourly rates.

IDShield provides identity monitoring and restoration services and is the only identity theft protection company armed with a team of licensed private investigators on call to restore a member's identity.

For more information, call press and corporate relations at 580-436-1234.

SOURCE LegalShield