Number of Improving Housing Markets Surges to 201 in December

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."