The National Association of Home Builders (NAHB)/ First American Improving Markets Index (IMI) continued its trend of marked monthly improvements in January, according to a release from the NAHB.
The index rose for the fifth consecutive month in January to reach 242, once again achieving a record high. The index measured 201 in December.
The IMI measures the relative growth (from their respective troughs) of markets across the country, using employment, housing permits, and home prices as a gauge. Markets showing at least six straight months of improvement make the list.
According to the NAHB, the list of improving markets now includes entrants from 48 states and the District of Columbia. The only states not represented are Kansas and New Mexico.
Forty-seven new metros were added to January’s list, while six were dropped. New entries include Los Angeles, California; Auburn, Alabama; Des Moines, Iowa; Richmond, Virginia; and Cleveland, Ohio.
“We created the improving markets list in September of 2011 to spotlight individual metros where—contrary to the national headlines—housing markets were on the mend,” said NAHBchairman Barry Rutenberg. “Today, 242 out of 361 metros nationwide appear on that list, including representatives from almost every state in the country. The story is no longer about exceptions to the rule, but about the growing breadth of the housing recovery even as overly strict mortgage requirements hold back the pace of improvement.”
While the IMI has shown remarkable growth since its inception—reaching approximately 20 times its starting total—NAHBchief economist David Crowe warns that the list might slip in coming months as winter sales data comes in.
“The IMI has almost doubled in the past two months as stronger demand during prime home buying season boosted prices across a broader number of metropolitan areas,” Crowe said. “Similar home price gains, and hence the IMI, may be tempered in the future as we see data from typically slower months for home sales.”