Nearly 17% of metro markets across the nation have returned to or exceeded their last normal levels of economic and housing activity as the recovery marches forward, according to the National Association of Home Builders.
Out of approximately 350 metro markets, 59 are now back to—or better than—their pre-recession normal, indicates the First American Leading Markets Index (LMI), representing a net gain of 11 metros year-over-year.
Nationwide, the index ticked up from March’s .87 to .88. In other words, based on current permit, price, and employment data, the national average is now at 88% of normal economic and housing activity. More than eight in 10 (83%) metro markets have improved in the past year, with 28% seeing their index score increase in April.
Some smaller, mid-country metros are capitalizing on an energy boom. Odessa and Midland, Texas have LMI scores of 2.0 or higher, with their markets doubling their pre-recession strength. Smaller metros topping the index include Bismarck, N.D., Casper, Wyo., and Grand Forks, N.D., but the improvement isn’t limited to these regions.
“The big news here is that regions outside of the energy states continue to gain ground,” said NAHB Chief Economist David Crowe in a statement. “It’s a promising sign to see areas like Los Angeles and San Jose joining the top ten largest MSAs showing a recovery. We still expect 2014 to be a strong year for housing and to aid in the overall economic recovery.”
As the job market continues to improve, the housing market will see a steady release of buyers with pent-up demand, he adds.
Baton Rouge, La. tops the LMI with a score of 1.42, meaning it’s performing 42% better than its last normal market level. Honolulu, Oklahoma City, Austin, Houston, San Jose, Calif. and Harrisburg, Pa. are other major metros topping the index, with LMI scores indicating market activity that now exceeds previous norms.
“Things are getting slowly better overall,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “And with the housing market now entering the spring buying season, the fact that the nation’s economy is headed in the right direction is a very promising sign.”
Written by Alyssa Gerace