Following seven consecutive months of gains, the list of improving U.S. housing markets remained virtually unchanged in April, with 273 metros on the National Association of Home Builders/First American Improving Markets Index (IMI). This total reflects a net reduction of one market since March and again includes entrants from all 50 states and the District of Columbia. The IMI identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. Five new markets were added to the list and six markets were dropped from it this month. Newcomers included the geographically diverse locations of Macon, Ga.; Portland, Maine; Rocky Mount, N.C.; Eugene, Ore.; and Jackson, Tenn.
"The stability in the improving markets list this month is encouraging, with three quarters of all metros tracked by our index considered on the upswing as the housing recovery spreads to parts of every state," said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. "In some markets, the main thing that's holding back a recovery is a relatively thin inventory of homes for sale, which could be resolved if builders had easier access to credit for building homes and putting people back to work."
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three measures for at least six consecutive months following those measures' respective troughs before being included on the improving markets list.
"After a strong run-up through late 2012 and early 2013, the number of improving markets is holding steady at a high level," said NAHB Chief Economist David Crowe. "We can expect to see more gradual gains going forward as challenges related to increased demand kick in - including everything from tightened supplies of developable lots and labor to the rising cost of building materials."
"With 75 percent of the country seeing measurable improvement in housing market conditions, the outlook is definitely brightening for local economies this spring," noted Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.