The list of U.S. housing markets showing measurable and sustained improvement rose by four to include 84 metros in July, according to the National Association of Home Builders/First American Improving Markets Index (IMI), released recently. This number includes representatives from 32 states plus the District of Columbia.
The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. This month’s IMI includes 73 metros that held their positions on the list from June, as well as 11 newly added markets. Notable new entries include such geographically diverse places as Prescott, Ariz.; Springfield, Mass.; St. Cloud, Minn.; and Houston, Texas.
“The geographic diversity and growing number of metros on the latest IMI help spotlight the improvements we have begun to see in terms of home prices and job market conditions across certain parts of this country, which in turn are spurring more demand for new homes,” says NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “That said, our members continue to assert the need for more reasonable credit standards and more accurate appraisal methods to perpetuate this positive momentum.”
“The modest increase in the July IMI is encouraging because it indicates that individual housing markets continue to regain their footing despite some recent reports of weakening in the broader economy,” adds NAHB Chief Economist David Crowe. “This is evidence that the housing recovery is slowly but surely taking root, one market at a time.”
“The positive takeaway from today’s report is that an increasing number of consumers are looking at better conditions to both buy and sell homes, which should help spur greater activity in certain markets going forward,” notes Kurt Pfotenhauer, vice chairman of First American Title Company.
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 metropolitan area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.
A complete list of all 84 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in July, is available at www.nahb.org/imi.