1 in 6 Housing Markets Back to Pre-Recession Levels

“Housing markets across the nationrnare continuing their slow and steady climb back to normal levels,” NationalrnAssociation of Home Builders (NAHB) Chairman Rick Judson said today.  Judson announced that the NAHB/First AmericanrnTitle Insurance Leading Markets Index hit .87 this month, indicating that the nationrnis now running at about 87 percent of normal economic and housingrnactivity.  In addition, 58 metropolitanrnareas made the NAHB list of leading markets, meaning they have returned to orrnexceeded their last normal levels of economic and housing activity. </p

The Leading Markets Index is based onrndata from the U.S. Census, Freddie Mac, and the Department of Labor Statisticsrnon permits for housing construction, home prices, and employment.   More than 350 metro areas are scored byrntaking their average number for each of the three types of information over thernprevious 12 months and dividing each by their annual average over the lastrnperiod of normal growth; 2000-2003 for single-family permits and home prices,rnand 2007 for employment.  The nationalrnscore is calculated based on national measures of the three metrics.</p

NAHB says the index serves to identifyrnthose areas that are now approaching and/or exceeding their previous normalrnlevels of economic and housing activity.  There are two more metro areas on this month’srnlist than last and the nationwide score is up from .86 January. </p

The highest score on the index for majorrnmarkets was for Baton Rouge at 1.41. rnThis indicates that the area is performing 41 percent above its last normalrnmarket level. Other major metros at the top of the list include Honolulu,rnOklahoma City, Austin and Houston, as well as Harrisburg and Pittsburgh – allrnof whose LMI scores indicate that their market activity now exceeds previousrnnorms.<br /<br /Looking at smaller metros, both Odessa and Midland, Texas, boast LMI scores ofrn2.0 or better, putting them at more than double their strength prior to thernrecession. Also at the top of the list of smaller metros are Bismarck, North Dakota;rnCasper, Wyoming; and Grand Forks, North Dakota, respectively.</p

“Firming home prices are hasteningrnthe return of normal economic and housing activity in an increasing number ofrnmarkets,” said NAHB Chief Economist David Crowe. “The healthiestrnmarkets continue to be centered in smaller metros that boast strong localrneconomies, particularly in the oil and gas producing states of Texas, NorthrnDakota, Louisiana and Wyoming.”<br /<br /"We are pleased about the continued market trends, highlighted by the factrnthat eighty-five percent of all metropolitan areas have shown signs ofrnimprovement over the past year,” said Kurt Pfotenhauer, vice chairman ofrnFirst American Title Insurance Co., which co-sponsors the LMI report.</p

The improving market levels are goodrnnews for the housing industry Judson says. rn”As employment and consumer confidence slowly improves, this isrnspurring pent-up demand among potential buyers.”

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