The National Association of Home Builders (NAHB) and First American Leading Markets Index (LMI) was released today showing that the U.S. housing markets are steadily getting back to normal.
A total of 66 markets across the country saw a year-over-year net gain in the second quarter of 2016 with 146 of the approximately 340 metro areas returned to or exceeded their last normal levels of economic and housing activity.
The NAHB said that nationwide scores increased to .97, meaning that based on current permit, price and employment data, the nationwide average is running at 97% of normal economic and housing activity. Housing markets saw an improvement of 91%.
The market that saw the most improvement was Baton Rouge, La. which experienced 61% better than its last normal market level. Other major metros leading the list include Austin, Texas; Honolulu; and San Jose, Calif. Rounding out the top 10 are Houston; Provo, Utah; Spokane, Wash.; Nashville, Tenn.; Los Angeles; and Oklahoma City, according to the NAHB.
Smaller housing markets that were double their strength prior to the recession were both Odessa and Midland, Texas. Other cities that topped the list were Manhattan, Kansas; Walla Walla, Wash.; and Grand Forks, N.D.
NAHB Chairman Ed Brady had said this about the latest report, “This gradual uptick is in line with NAHB’s forecast for a slow but steady recovery of the housing market. With a strengthening economy, solid job growth and low mortgage interest rates, the market should continue on an upward trajectory throughout the rest of the year.”
“Among the LMI components, house prices are making the most far-reaching progress, with almost 97% of markets having returned to or exceeded their last normal levels. Meanwhile, 78 metros have reached or exceeded normal employment activity,” said NAHB Chief Economist Robert Dietz. “Single-family permits have edged up to 50% of normal activity, but remain the sluggish element of the index.”
“More than 85 percent of all metros saw their Leading Markets Index rise over the quarter, a signal that the overall housing market continues to move forward,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company, which co-sponsors the LMI report.