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Improving Markets List Shrinks; Mortgage Rates 'Very Favorable'

by devteam July 9th, 2013 | Share

The number of metropolitan areas listedrnas “improving” by the National Association of Home Buildersrn(NAHB) and First American Title fell slightly in July. There werern255 markets that met the definition for inclusion on the ImprovingrnMarkets Index (IMI) compared to 263 in June. The new number stillrnremains more than triple the number on the list one year ago.</p

“This is the sixth straight monthrnin which at least 70 percent of all U.S. metros have qualified forrnthe Improving Markets Index,” observed NAHB Chairman RickrnJudson. “The relative stability of the IMI is representative ofrnthe broad recovery underway, which is much more extensive than whatrnwe were looking at one year ago.”</p

The NAHB/First American list isrncomprised of cities that have shown six consecutive months ofrnimprovement from their respective troughs in three economic areas,rnhousing starts, employment, and home prices. Six new markets werernadded to the list in July while 14 were dropped. New Markets arernCumberland, Maryland; Saginaw, Michigan; Farmington and Las Cruces,rnNew Mexico; Kingston, New York; and Olympia, Washington. Thirteen ofrnthe fourteen cities that dropped from the list (St. Joseph, Missourirnbeing the exception) were east of the Mississippi and there were tworncities each in Alabama, Georgia, and Ohio.</p

“Despite slight ups and downsrnin recent IMI levels, an overwhelming majority of U.S. metros –rnincluding those located in almost every state — remain solidly onrnthe path to recovery even as the pace of their improvement is slowed</bby ongoing challenges related to the availability of credit, labor,rnlots and certain building materials," added NAHB Chief EconomistrnDavid Crowe. "Based on recent trends in home prices, housingrnpermits and employment, the outlook for a continued housing expansionrnremains very positive for the remainder of 2013."

Despite growing concern that the recent spike in mortgage rates could hinder the housing recovery, First American’s Kurt Pfotenhauer framed them in a positive light. “Thernfact that more than two-thirds of all U.S. housing markets continuernto be represented on the improving list should be a boon to consumerrnconfidence at a time when many are looking to take advantage ofrntoday’s very favorable mortgage rates,” observed Pfotenhauer.</p

The IMI uses three sets of data asrnmeasures; employment growth from the Bureau of Labor Statistics,rnhouse price appreciation from Freddie Mac and single-family housingrnpermit growth from the U.S. Census Bureau.

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About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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