Twenty-three metropolitan areas are now listed on the National Association of Home Builders (NAHB)/First American Improving Markets Index (IMI) released on Thursday. This is nearly double the 12 markets listed as improving when the first index was released in September.
NAHB defines an improving market as one that has shown improvement for at least six months in housing permits, employment, and housing prices using indicators from the Bureau of Labor Statistics, Freddie Mac and the U.S. Census Bureau. A metropolitan area must see improvement in all three areas for at least six months after the respective trough for each indicator to be designated improved.
September's initial list consisted of twelve cities, Alexandria, New Orleans, and Houma Louisiana; Midland, Sherman, and Waco, Texas; Anchorage and Fairbanks Alaska; Bangor, Maine; Bismarck, North Dakota; Casper, Wyoming; Fayetteville, North Carolina; and Pittsburgh, Pennsylvania. Bangor was dropped from the list in October because of a decline in building permits and 12 cities were added; Jonesboro and Pine Bluff, Arkansas; Amarillo, Wichita Falls, McAllen, and Odessa Texas; Kankakee, Illinois, Sumter, South Carolina, Iowa City and Waterloo, Iowa, and Winston-Salem, North Carolina.
"Both the number and geographic diversity of improving housing markets expanded this month, with Iowa, Illinois and South Carolina all newly represented by one entry or more on the list," said NAHB Chairman Bob Nielsen. "This is further evidence that, despite the tough conditions that persist in many cities, pockets of improvement are emerging in local housing markets across the country."
"While Pittsburgh and New Orleans remain the two largest improving markets, the October IMI is heavily weighted by smaller cities in which energy and agriculture are the primary economic drivers and where the effects of the recession have been less pronounced," said NAHB Chief Economist David Crowe. "In particular, Texas stands out for its seven entries on the improving markets list."
The strongest growth in employment was recorded in Midland and Odessa, Texas which were up 9 percent and 8.8 percent respectively from their troughs in August 2009. The largest home price increases were in Pittsburgh, up 7.3 percent and Kankakee, Illinois with prices up 6.9 percent from their respective troughs in late 2010 and early 2011. Housing permits which bottomed out last February are up a stunning 60.6 percent in Sherman, Texas and 14.8 percent in Jonesboro, Arkansas.