A total of 247 metropolitan areas across 49 states and the District of Columbia qualified for inclusion on the National Association of Home Builders/First American Improving Markets Index (IMI) for August. While this is eight metros shy of the number listed on the IMI in July, it is approximately three times the number of metros that qualified for the list in August 2012.
The IMI identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment, and house prices for at least six consecutive months. Three new markets were added to the list and 11 dropped from it in August. Newly added metros this month include Kankakee, Ill., along with Atlantic City and Ocean City, N.J.
"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," said NAHB chief economist David Crowe. "As house prices return to more normal levels in fully recovered markets, further IMI advancements will be more modest."
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau.
NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three measures for at least six consecutive months following those measures' respective troughs before being included on the improving markets list.
A complete list of all 247 metros currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in August, is available at www.nahb.org/imi