Improving Housing Markets Hold Steady in May

Washington - The latest reading of the NAHB/First American Improving Markets Index shows the list holding fairly steady at 100 metros in May. This list counts representatives from 34 states and the District of Columbia, including such geographically diverse newcomers as Phoenix; Bowling Green, Ky.; Bend, Ore.; and Lubbock, Texas. In all, 83 markets held onto their spots on the IMI this time around, while 18 metros dropped from the list and 17 were added, for a net loss of one from April's total of 101.

According to NAHB Chief Economist David Crowe, “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. 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.”

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. 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 100 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in May is available at www.nahb.org/imi.

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