Getting Stronger Each Month
by Carla Hill
The latest National Association of Home Builders/First American Improving Markets Index (IMI) numbers show that a total of thirty-five states are now represented.
In order to be considered an improving market these metro areas must have shown improvement in housing permits, employment, and home prices for the last six months straight. This data is comprised from reports employment growth reports from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau.
“While housing markets across the country continue to struggle under the weight of overly tight lending conditions and other challenges, the April IMI indicates that at least 101 individual metros are showing measurable and consistent signs that they are headed in the right direction,” said NAHB Chairman Barry Rutenberg. “A total of 35 states are now represented on the list, with 10 states having four or more entries. This positive news is in line with what our builder members have observed regarding firming conditions and improved buyer interest in certain locations.”
Each month new markets have been joining this list.
The newest entrants this month included 13 new metro areas. Some of these new to the list areas are Rome, Ga.; Coeur d’Alene, Idaho; Greenville, N.C.; Brownsville, Texas; St. George, Utah; and Huntington, W.Va..
What do these latest rankings tell us about housing across the nation? We are currently entering the Spring selling season, a typically robust time of year for real estate. “The fact that the number and geographic distribution of improving housing markets continued to expand beyond the 100 mark in April bodes well for the start of the spring home buying season, and should be an encouraging sign for those who are considering a home purchase,” added Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.
Additionally, there appears to be a stabilizing in many markets, with the Index beginning to plateau. “After five consecutive months of gains, the IMI recently began to plateau, with many markets holding steady and a few experiencing the ups-and-downs that are typical in a choppy recovery,” observed NAHB Chief Economist David Crowe. “The IMI is designed to highlight markets that are showing consistent improvement, and those markets that have registered the smallest gains are more susceptible to dropping off the list due to a minor setback in prices, permits or employment,” he explained. At the same time, “as stronger markets approach stability, it will get harder for them to keep charting improvement, which will also limit the expansion of the IMI.”