ADA, Okla.--(BUSINESS WIRE)--Released today, the August 2020 LegalShield Law Index, a suite of leading indicators of U.S. households and small business, saw its two primary real estate indices measuring homebuilding and home sales reach all-time or near record highs, respectively, consistent with the “V-shaped” recovery seen in residential housing this year and pointing to housing strength for several more months. LegalShield has measured consumer demand for various legal services for almost 16 years.
“Housing remains one of the few bright spots in an otherwise troubled economy and our predictive data suggest that the sector should remain healthy into next year,” said Jeff Bell, CEO of LegalShield. “Mortgage rates are at record lows and builders are having trouble keeping up with the demand, as the pandemic drives families out of cities and into the suburbs and exurbs. The price of lumber, however, needs to be watched. In August, it soared to an all-time high and remains more than double its mid-April level, and there is the additional concern now of uncontrolled fires in the West, which could further limit supply, driving prices even higher. If the cost of hiring construction workers or price of building products rises too far, too fast, then we could see a weakening in housing demand. And we certainly don’t need residential housing following the path of commercial real estate such as malls, hotels and offices.”
The LegalShield Law Index is comprised of five sub-indices that tend to lead an existing economic indicator that sheds light on the health of the U.S. economy. The LegalShield Housing Activity Index, for example, tends to lead U.S. Census data on housing starts by 1-2 months; the LegalShield Real Estate Index tends to lead monthly existing home sales as published by the National Association of Realtors. Since LegalShield's member intakes are logged in real-time rather than through surveys, there is no lag in compiling the data and, therefore, are viewed as predictive and actionable.
- In August, the LegalShield Housing Activity Index surged nearly 10 points to 138.2, the highest level on record. Housing starts spiked 22% in July and are 8.6% above last year's level. These improvements can be partly attributed to improved building prospects in the suburbs and exurbs.
- The LegalShield Real Estate Index improved 4.3 points in August to 111.8, its strongest reading since late 2005. After dropping this spring, existing-home sales increased 25% in July and are 8% above last year's levels. Demand for single-family homes has increased significantly this year—fueled by sub-3.0% mortgage rates.
The data show that the housing and real estate markets are rebounding from the coronavirus- induced shutdown of this spring quicker than many other sectors of the economy. However, this increase has also driven prices up 8.5% from July 2019 to July 2020, meaning that a house in the suburbs may not be as affordable to everyone.
The LegalShield Law Index reflects the demand for legal services among the company’s provider 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, including the LegalShield Foreclosure Index in addition to the Consumer Financial Stress Index, Housing Activity Index, Real Estate Index, and the Bankruptcy Index. For full LegalShield Law Index findings visit https://www.legalshield.com/law-index.
About LegalShield and IDShield
A trailblazer in the democratization of affordable access to legal protection, LegalShield is North America’s leading provider of online legal subscription plans covering more than 4.4 million people. Its IDShield identity theft solution for individuals and families has more than one million members. LegalShield and IDShield serve more than 141,000 businesses. In addition, over 40,000 companies offer LegalShield and IDShield plans to their employees as a voluntary benefit. Both legal and identity theft plans start for less than $25 per month. For more information about LegalShield, visit: https://www.legalshield.com/ or for more information about IDShield, visit: https://www.idshield.com/.