Metro Markets Improve
According to the National Association of Home Builders (NAHB) latest Leading Markets Index (LMI), national metropolitan housing markets are continuing a gradual return to normalcy from the low points of activity in the recent “great recession.”
The LMI shows that “markets in 56 out of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity.” Normal market levels in these 56 metro areas represent a net gain of two metro areas from the previous month. The index showed a nationwide score of .86, which indicates that the nationwide average is running at 86 percent of normal economic and housing activity, this is based on current permits, prices and employment data.
NAHB Chairman Rick Judson said that, “More markets are slowly returning to normal levels and we expect this upward trend to continue as an improving economy and pent-up demand brings more home buyers back into the marketplace.” However, he added that actions by policymakers need to avoid harming consumer confidence or impeding the current economic recovery.
Another NAHB official, Chief Economist David Crowe, said that, “Forty-five percent of metro areas are recovering at a faster pace than the nation as a whole, with smaller markets leading the way.” He added that, “Of the 56 markets that are at or above normal levels, 48 of them have populations that are less than 500,000, and many of these local metros are fueled by a strong energy sector, which is producing solid job and economic growth.”
Additionally the LMI data shows that even more markets are solidly on the way to full recovery with, more than 35 percent of the nearly 350 metro markets on the month’s LMI operating at a capacity of 90 percent or better of previous norms. The NAHB believes that this is a clear sign that the housing recovery will continue to pick up steam in 2014.