Eighty Markets Show Housing Improvement, “Fragile” Recovery

There are now 80 housing markets showing improvement, as measured by the National Association of Home Builders (NAHB) in its monthly housing report. 

The NAHB/First American Improving Markets Index (IMI) lists 28 entrants to the list of improving metropolitan areas, despite the list declining from 100 metros in May to 80 in June. Of the new entrants, NAHB lists Tuscaloosa, Ala., Grand Juntion, Colo., Fargo N.D., Knoxville, Tenn., and Dallas as notable. 

“The shifting of some markets off the IMI in June underscores the fragile nature of the housing recovery as well as the fact that many locations that previously made the list had recorded only marginal house price gains, which were easily wiped out by small downward changes,” noted NAHB Chief Economist David Crowe. “However, the fact that multiple new areas are showing up on the list each month is encouraging, and highlights the degree to which local economic and job market conditions are what drive individual housing markets.”

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Market volatility and uncertainty are still factors, and fundamentals continue to improve, said First American Title Insurance vice chairman Kurt Pfotenhauer. 

View the full market index from NAHB.  

Written by Elizabeth Ecker

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  • This outlook shows a teetering housing recovery in a significant number of US communities. As a realist this is a good sign but not hardly the robust recovery needed to significantly raise consumer confidence in the housing market nationally. The tight mortgage underwriting standards now in place seem to be a barrier to a better housing outlook.

    The home building industry is a barometer of how soon the home buying segment of the population will be substantially reentering the market. Right now it seems the outlook is very, very local and could fluctuate greatly over the next few months.

    A huge indicator of the potential for home appreciation is spring home buying. Most agree the results were mixed and not conclusive but mixed is somewhat of an improvement. Home sales in the next 60 to 90 days will be analyzed over and over to find any glimmers of opportunity. Most prognosticators look for once again a mixed result.

    The Sword of Damocles is hanging over the entire housing recovery which is the shadow and pent up inventories and homes in significant default. Until these homes get flushed through the system, questions about home appreciation will hang over any potential recovery in consumer confidence in home appreciation. The location of the Sword is know more accurately and as is its size but the thread by which it is held is barely understood.

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