Recent months have witnessed incredible activity within the housing sector. Improved economic conditions have bolstered housing prices and inventory levels are returning to normal. However, a recent report has acknowledged a temporary lull for the month of August. According to the National Association of Home Builders/First American Improving Housing Market Index, 11 cities were removed from the list, indicating stagnation. Conversely, just three cities were added to the list.
“While the number of improving housing markets this August remains well ahead of the same month last year, the index is affected by seasonal softening in home prices just as we saw happen in 2012. The metros that fell off the list this month originally qualified with very small home price improvements that have since slipped back,” explained NAHB Chief Economist David Crowe. “As house prices return to more normal levels in fully recovered markets, further IMI advancements will be more modest.”
As its name suggests, the Improving Markets Index identifies cities that have shown improvement in housing permits, employment, and home prices for at least six consecutive months. The newest additions to the list are as follows:
- Kankakee, Ill.
- Atlantic City, N.J.
- Ocean City, N.J.
By comparison, the following 11 cities were removed from the list because of their failure to improve under current conditions:
- Huntington, W. VA.
- Parkersburg, W. VA.
- Las Cruces, N.M.
- Tyler, TX
- Lewiston, ID
- Lancaster, Pa.
- Bloomington, Ind.
- Champaign, Ill.
- Spartanburg, S.C.
- St. Cloud, Minn.
- Virginia Beach, Va.
Despite a decrease in the number of cities represented by the report, the data is still encouraging. According to the NAHB, in just one year, the number of cities represented on the list has tripled. The progression has witnessed approximately 70 percent of all U.S. metros find a place on the list, as the housing sector has received a boost.
“In all, 244 metros that were listed as improving in July retained that status in August, and this is an encouraging sign of the continuing housing recovery,” says NAHB Chairman Rick Judson. “That said, we know that the pace of improvement is being hampered somewhat by challenges that builders and buyers are experiencing with regard to the availability of credit, materials, lots for development and labor.”
