Markets in 56 out of the about 350 metro areas across the United States returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders/First American Leading Markets Index (LMI).
This represents a net gain of two from the previous month. The index’s nationwide score of .86 indicates that, based on current permits, prices and employment data, the nationwide average is running at 86% of normal economic and housing activity.
“More markets are slowly returning to normal levels and we expect this upward trend to continue as an improving economy and pent-up demand brings more home buyers back into the marketplace,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “Policymakers must be careful to avoid actions that would harm consumer confidence and impede the ongoing recovery.”
“45% of metro areas are recovering at a faster pace than the nation as a whole, with smaller markets leading the way,” said NAHB Chief Economist David Crowe. “Of the 56 markets that are at or above normal levels, 48 of them have populations that are less than 500,000, and many of these local metros are fueled by a strong energy sector, which is producing solid job and economic growth.”
“More than 35% of all the markets on this month’s LMI are operating at a capacity of 90% or better of previous norms, which is a good sign that the housing recovery will continue to pick up steam in 2014,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report.
Baton Rouge, LA, tops the list of major metros on the LMI, with a score of 1.42—or 42% better than its last normal market level. Other major metros at the top of the list include Honolulu, Oklahoma City, Austin, and Houston, as well as Harrisburg, PA, and Pittsburgh. LMI scores for all these markets exceed previous norms.
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