The number of improving housing markets continued to expand for a fourth consecutive month in December, rising from 30 to 41 on the latest National Association of Home Builders/First American Improving Markets Index (IMI). The December list featured 20 new additions, including several major markets such as Washington, D.C.; San Jose, Calif.; and Toledo, Ohio. Meanwhile, nine smaller markets dropped off the list, primarily due to softer house prices.
The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months.
"The increases we continue to see in the number and geographic diversity of improving metros are quite encouraging, and evidence of the fact that all housing markets are dependent on uniquely local factors," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. He noted that as of December, a total of 21 states and the District of Columbia are represented on the improving markets list -- up from 14 states represented in November.
"The December IMI results are very much in keeping with the latest government housing data and our own builder surveys, which have shown modest signs of improvement in certain individual markets where employment is gaining and distressed properties are not as numerous," said NAHB Chief Economist David Crowe. "These gradual improvements are now becoming evident not just in small, energy-producing metros that have previously dominated the IMI, but also in several larger markets and areas with more diverse economies."
The nine markets that dropped off the IMI in December include Alexandria, La.; Fairbanks, Alaska; Hinesville, Ga.; Houma, La.; Jonesboro, Ark.; Lima, Ohio; Pine Bluff, Ark.; Sumter, S.C. and Waco, Tex. All but two of these metros fell from the list due to softening house prices. The exceptions to the rule were Jonesboro and Waco, where declines were registered in employment and single-family housing permits, respectively.
The total list of improving housing markets in December, as defined by the IMI, includes the following 41 entries (listed alphabetically by state): Anchorage, AK; San Jose, CA; Boulder, CO; Fort Collins, CO; Washington, DC; Athens, GA; Davenport, IA; Waterloo, IA; Kankakee, IL; Fort Wayne, IN; Muncie, IN; Monroe, LA; New Orleans, LA; Ann Arbor, MI; Muskegon, MI; Jackson, MS; Fayetteville, NC; Winston-Salem, NC; Bismarck, ND; Grand Forks, ND; Lincoln, NE; Canton, OH; Toledo, OH; Pittsburgh, PA; Scranton, PA; Williamsport, PA; Kingsport, TN; Amarillo, TX; Corpus Christi, TX; Laredo, TX; McAllen, TX; Midland, TX; Odessa, TX; Sherman, TX; Tyler, TX; Danville, VA; Winchester, VA; Burlington, VT; Charleston, WV; Casper, WY; and Cheyenne, WY.
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.
Visit www.nahb.org/imi for additional data, tables and a list of future economic release dates.