WASHINGTON – Dec. 7, 2012 – The number of housing markets considered “improving” in the National Association of Home Builders (NAHB)/First American Improving Markets Index (IMI) surged by 76 – to a total of 201 metros – in December. The number of states (plus the District of Columbia) represented by at least one metro increased from 38 to 44.
For the index to consider a city “improving” for the index, it must have shown growth from its respective trough in housing permits, employment and house prices for at least six consecutive months.
While the list grew by 76, a total of 84 new metros were added. The number was offset by eight cities that dropped off the list, though none were in Florida.
“The big gain in improving markets this December indicates that key measures of housing and economic strength have now been holding steady or improving in metros across the country for six months or more, which is an important signal of stability amidst the slowly emerging recovery,” says NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “The main thing that’s limiting progress … is difficulty that potential buyers continue to experience with overly tight mortgage qualifying standards.”
The index has improved for four consecutive months, and over half the cities are now “improving.”
“In general, we expect the overall housing recovery to continue expanding in 2013,” says NAHB Chief Economist David Crowe. “However, that is absent a major policy change of the kind that some policymakers have been discussing with regard to the mortgage interest deduction.”
The IMI measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas (MSAs). The three indicators are employment growth from the Bureau of Labor Statistics, housing price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. An MSA must improve in all three measures before it’s included on the improving markets list.
A complete list of all 201 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in December, is available at http://www.nahb.org./imi.
© 2012 Florida Realtors®