The number of housing markets designated as improving by the National Association of Home Builders (NAHB) took a huge jump in December, increasing by 76 to 201 metropolitan areas. This means that over half of all metropolitan areas tracked by NAHB are now considered to be improving and 44 states plus the District of Columbia now have at least one city on the list, up from 38 in November. Eight cities were dropped from the list and 84 were added.
Improving markets are those which have had six consecutive months of improvement from their respective low points in each of three independent measures, employment, home prices, and housing construction. NAHB uses the issuance of housing permits tracked by the U.S. Census Bureau; employment growth from the Bureau of Labor Statistics, and housing price appreciation from Freddie Mac.
Among the metropolitan areas added to
the list in December were Atlanta, Ann Arbor, Bloomington, Illinois, and Green
Bay, Wisconsin. Seven cities were added
in California and four each in Washington, North Carolina, New York, and
Virginia. Texas also added two cities
while two others dropped from the list.
"The big gain in improving markets this December indicates that key
measures of housing and economic strength have now been holding steady or
improving in metros across the country for six months or more, which is an
important signal of stability amidst the slowly emerging recovery," said
NAHB Chairman Barry Rutenberg. "The
main thing that's limiting the progress we're seeing right now is the
difficulty that potential buyers continue to experience with regard to overly tight
mortgage qualifying standards."
"This fourth consecutive month of expansion in the IMI, coupled with the
fact that well over half of all metro areas are now represented on the list, is
in keeping with the upward trends that we've been seeing all year in terms of
housing starts and sales, builder confidence and other measures," noted
NAHB Chief Economist David Crowe. "In general, we expect the overall
housing recovery to continue expanding in 2013. However, that is absent a major
policy change of the kind that some policymakers have been discussing with
regard to the mortgage interest deduction."