The National Association of Home Builders (NAHB) added 11 more metropolitan areas to its Improving Markets Index for October, a measure of the nation’s housing markets that are showing definite signs of recovery.
A measure of specific housing markets’ housing permits, employment and home prices, the Improving Markets Index now totals 103 metropolitan areas and 33 states, and has been growing steadily since it was first introduced a year ago.
Improving Markets Index – Looking on the Bright Side
For October, the NAHB added 11 markets to the Improving Markets Index, including Santa Cruz, Calif., Abilene, Texas and Savannah, Ga., and Barry Rutenberg, the association’s chairman, said such additions are an encouraging sign for the housing market.
“This is an encouraging sign that the housing recovery is proceeding at a steady pace, as firming prices and employment help spur new building activity, which in turn generates new jobs and more home sales,” Rutenberg said.
And indeed, as we’ve been covering, construction spending in the residential homebuilding sector has been growing robustly in recent months; as of August, residential construction is up 18 percent from last year and 23 percent from the post-bubble low.
David Crowe – Housing Recovery “Solidifying”
David Crowe, the NAHB’s chief economist, said that the latest Improving Markets Index suggests that the housing recovery, as several economists have now argued, is here to stay.
“The fact that most markets are maintaining their spots on the improving list from month to month is an important indication that the recovery trend is solidifying,” Crowe said.
In order to track housing markets that show sustained improvement, the NAHB uses three sets of monthly data – employment data from the Bureau of Labor Statistics, home price appreciation from Freddie Mac and single-family housing permit growth from the Census Bureau. A metropolitan area must show improvement for six straight months to be included in the Improving Markets Index.