Despite a minor setback in May, the number of improving metropolitan housing markets rebounded slightly during June.
The number of U.S. housing markets on the mend rose by five to a total of 263 in June, according to the National Association of Home Builders (NAHB) First American Improving Housing Markets Index (IMI).
June is the fifth consecutive month in which the IMI has designated more than 70% of U.S. housing metros as improving, according to NAHB Chairman Rick Judson, a home builder from Charlotte, North Carolina.
“While that’s a good sign that the housing recovery is on solid footing, we know that various challenges are slowing its progress,” said Judson.
Such challenges continue to be issues with credit availability for both builders and buyers, as well as appraisals that are not keeping up with the rising costs of construction.
For June’s list, 29 additional metro markets shows improvement, while 24 were dropped from the list during the month.
New entrants included geographically diverse metros as Salinas, California; Sioux City, Iowa; Chicago, Illinois; Topeka, Kansas; Baton Rouge, Louisiana; Laredo, Texas; and Philadelphia, Pennsylvania.
“As market conditions improve across most of the country, some metros have moved onto the IMI list while marginal seasonal fluctuations have nudged others off of it,” said NAHB Chief Economist David Crowe.
Shifting presences of improving metros are expected as the recovery expands, adds Crowe, also noting that the number of improving markets is now more than three times what it was in June 2012.
The IMI identifies metro areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months.
The index is also designed to track housing markets throughout the country that are showing signs of improving economic health.
“The continued strength of the IMI is an indicator of the ongoing, positive momentum in housing markets nationwide as consumers move to take advantage of historically favorable interest rates and affordable home prices,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.
To compile its data, the IMI factors employment growth form the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau.
Written by Jason Oliva