Metro Housing Markets Improve

According to the National Association of Home Builders (NAHB)/First American
Improving Markets Index (IMI), a total of 247 metropolitan areas across 49 states
and the District of Columbia qualified for inclusion to the IMI list for the month of

The NAHB says that, “While this is eight metros shy of the number listed on the
IMI in July, it is approximately three times the number of metros that qualified for
the list in August of 2012.”

The IMI identifies metropolitan areas that have shown improvement from their
respective troughs. To qualify for the IMI list a metropolitan area must show
improvements for at least six consecutive months in regards to housing permits,
employment and home prices. Added to the list for August were Kankakee, Ill.,
along with Atlantic City and Ocean City, N.J. Eleven metro areas were dropped.
NAHB data shows that 244 metros that were listed as improving in July retained
that status in August. NAHB analysts see this an “encouraging sign of the
continuing housing recovery.” NAHB Chairman Rick Judson, however, explains
that “the pace of improvement is being hampered somewhat by challenges that
builders and buyers are experiencing with regard to the availability of credit,
materials, lots for development and labor.”

The NAHB noted that though there was a small decline in the IMI for August,
nearly 70 percent of all U.S. metropolitan areas are represented on the list, with
the geographic distribution of entrants continuing to be “very widespread.”
Reassuring news for prospective homebuyers, says the NAHB.

NAHB Chief Economist David Crowe stated that, “While the number of
improving housing markets this August remains well ahead of the same
month last year, the index is affected by seasonal softening in home prices
just as we saw happen in 2012. The metros that fell off the list this month
originally qualified with very small home price improvements that have
since slipped back. As house prices return to more normal levels in fully
recovered markets, further IMI advancements will be more modest.”