The NAHB/First American Improving Markets Index for May reported 258 improving metros which included a metro from each state in the nation. Four new markets were added this month, and 19 dropped from the list. Builders, real estate pros and economists alike remain positive regarding the U.S. housing market, and continue to cite limited availability of credit, lack of supply and limited lots for building as ongoing obstacles. Rick Judson, NAHB Chairman and a homebuilder based in North Carolina, pointed out that more than 70 percent of metropolitan areas surveyed have maintained a presence on the Improving Markets Index, and that’s a good sign.
Indeed, for a metropolitan area to be included in the Improving Markets Index it must experience growth in three areas—single family housing permits, jobs and price appreciation of local homes—for at least 6 consecutive months. While 19 metros were removed from the list this month, this change might be a result of seasonal factors. Some markets experience a seasonal downturn in home buying and construction during winter months, so this is not unusual.
In other positive news, for the third consecutive month every state in the nation has at least one metro included in the Improving Markets Index, and this is the eighth month in a row where new markets joined the list. Kurt Pfotenhauer, vice chairman of First American Title Insurance, reminds consumers to focus on “the big picture,” which is that most markets are experiencing rising home values. There are more jobs available and permits for new home construction are on the uptick. While the Improving Markets Index shows a slight drop in the total number of metros, the National Association of Realtors® reported a month-to-month increase of 1.5 percent in pending contracts, an indication that buyer demand is emerging.
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