Housing performance continues creeping up
Gradually, the U.S. housing recovery continues in the approximately 360 U.S. metro markets.
Of those locations, the National Association of Home Builders/First American Leading Markets Index has identified 68 that have reached or exceeded normal housing and economic performance levels. Seven of those markets saw a year-over-year net gain.
Nationwide LMI score edges up
Based on current permit, employment and price data, the nationwide score inched up to .91, meaning on average housing and economic performance in the U.S. is at 91 percent of normal levels. Tom Woods, the chairman of the NAHB, noted that low interest rates and encouraging economic progress will help release “pent up demand,” and keep the housing market on the right path through 2015.
The score for the metro market areas nationwide is determined by taking permit, employment and price data in each location for the last 12 months, and dividing each by their annual average through the last stretch of normal performance. For the information on permits and prices, the last period of normal growth has been identified as 2000 to 2003. Employment data used for the base comparison was also collected from the last established duration of regular performance, 2007.
The top performing markets
If the index is higher than 1, it indicates growth at a normal level. Of the major metro areas, Baton Rouge, Louisiana, leads the way with a score of 1.43. This indicates the market is performing 43 percent better than it was during its last stretch of regular growth. The other top metro areas are San Jose, California; Los Angeles, California; Salt Lake City, Utah; Charleston, South Carolina and Nashville, Tennessee.
In Midland and Odessa, Texas, the LMI scores are 2.0 or better, meaning they are performing doubly well compared with their last respective periods of normal growth. Other small markets that are performing well are Manhattan, Kansas.; Grand Forks, North Dakota and Casper, Wyoming. Still, David Crowe, the NAHB’s chief economist, explained that only 7 percent of markets have reached or exceed normal performance levels. On the other hand, though, Kurt Pfotenhauer, vice chairman of First American Title Insurance Company, the co-sponsor of the LMI report, noted that 157 of the 360 markets are currently at or above 90 percent of their regular growth levels.
By: Equity National May 18, 2015 Title