The NAHB’s Improving Markets Index (IMI) held steady at 100 in May, the second month in a row of triple-digit totals for the index.
First released last summer, the IMI has grown by wide margins in the months since, and for May, 83 metropolitan areas maintained their place on the list, while 17 new ones, including Phoenix, Ariz. and Lubbock, Texas, gain addition to the list.
Barry Rutenberg, the NAHB’s chairman, said that the index reinforces the powerful local presence in real estate.
“The fact that there are 100 markets in 34 states and the District of Columbia represented on the improving list illustrates that all housing markets are local, and that the national headlines often don’t apply to what’s happening in a specific metropolitan area,” Rutenberg said. “In places where employment is firming up along with demand for new homes, the main factors weighing down the housing market continue to be access to credit (for both builders and buyers) and the difficulty of obtaining accurate appraisals on new construction.”
David Crowe, the NAHB’s chief economist, highlighted some of the nuances of the latest index, many of which derived from the seasonal economic trends that impact many of the nation’s metro areas.
“The overall number of markets on the IMI continued to plateau this month, with more than a quarter of all U.S. metros still showing signs of improvement,” Crowe said. “Many of these are relatively small markets in terms of their population and building volume, which is why their improvement is barely registering on the national scale as of yet. Moreover, we are seeing some shifting of markets on and off the list primarily due to small seasonal house price changes in areas that have had flat, stable prices rather than a boom-and-bust cycle.”
Designed to track housing markets throughout the country that are showing signs of improving economic health, the index (which can be read in its entirety here) measures 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 in its assessments of metropolitan areas. Some of the areas mentioned include Longview, Texas, Nashville, Tenn. and Tampa, Fla.
Kurt Pfotenhauer, the vice chairman of First American Title Insurance Company, said the index offers clear proof of a returning housing market.
“The fact that the number of improving metros continued to hold its own with 100 entries in May shows that there are many places across the country where confidence and consumers are returning to the housing market,” he said.