As the question of affordability looms over homebuyers’ heads, recent reports by economists generally agree that the housing market is weighed down by economic and global constraints—though a new report offers some near-term reasons for optimism.
The latest monthly Leading Economic Index (LEI) by nonprofit The Conference Board highlighted slight growth in many forward-looking metrics, but was significantly reduced by still-dour consumer expectations.
The Conference Board found that the LEI index increased by 0.2% month-over-month, bringing the index to 99.5 for July. The index compares current conditions to those in 2016, which is benchmarked at 100. This marks its fourth increase in the last six months, beating out June’s revised downturn of 0.1% (June’s LEI fell 0.2% before being revised).
Justyna Zabinska-La Monica—The Conference Board’s senior manager of business cycle indicators—stated that “most components were positive in July except consumer expectations, which continued to be a notable drag on the overall index.”
Her conclusion is supported by the University of Michigan in its latest consumer sentiment survey, which reported a nearly 8% drop in consumer sentiment for the first half of August. Keller Williams Co-Founder Gary Keller also noted the uncertainty of the labor market in a recent speech at Keller Williams’ Mega Camp on Aug. 19. There he described an “anemic” increase in jobs and inflation as cutting into household budgets, likely contributing to the declines in consumer sentiment.
Breaking down component contributions, most categories saw slight increases from June to July including average weekly initial claims of unemployment insurance (0.16%), building permits for new private housing units (0.15%) and interest rate spread (0.11%). These categories also saw gains in contributions in the last six months (0.1%, 0.11% and 0.52% respectively).
The average consumer expectations for business conditions, however, declined on both a month-over-month basis and in the past six months. Between June and July, consumer expectations fell 0.19%. On a six-month scale, it fell 1.26%.
Zabinska-La Monica described the ways in which economic growth is expected, but also its shortfalls.
“The economy should keep expanding, but growth is expected to be driven by business investments in AI, while the higher cost of living may reduce consumer spending, especially by lower- and middle-income households,” she said. “Consequently, The Conference Board continues to forecast real GDP growth of 1.9% in 2026 and 1.9% in 2027.”
The Coincident Economic Index (CEI), measuring current conditions, also continued its upward trend by increasing the same amount for July at 0.2%, bringing the index to 114.8. The CEI is made up of four main components: payroll employment, manufacturing and trade sales, personal income and industrial production. For July, payroll employment was the only component to make negative contributions.
The Lagging Economic Index (LAG) also increased by 0.2% month-over-month, bringing the index to 120.4. The report notes that although this is an increase on a monthly basis, it still sits below June’s index of 120.5. The Conference Board attributes this to the downward revisions made for the months between April 2025 and June 2026. Currently, the LAG is 0.8% higher for the last six months since July 2026.
For the full report, click here.
