Housing markets in 52 out of the approximately 350 metro areas across the United States have returned to or exceeded their pre-recessionary levels of activity, according to a newly created housing index.
The National Association of Home Builders/First American Leading Markets Index (LMI) was released for the first time in October 2013. It shows a nationwide score of .85, that means that--based on current permits, prices, and employment data--the nationwide housing market is running at 85% of normal activity.
Baton Rouge, LA, was the top major metros on the LMI, with a score of 1.41, which puts this market at 41% better than its last normal market level.
Other major metros at the top of the list in the first release of the index:
* Oklahoma City
* Austin, TX
* Houston, TX
* Harrisburg, PA
All these markets had LMI scores indicate that their housing markets now exceed previous norms.
In terms of smaller metros: Odessa, TX and Midland, TX both had LMI scores of 2.0 or better, indicating their housing markets at double their strength prior to the recession. Other top small metros:
* Casper, WY
* Bismarck, ND
* Florence, AL
"This index helps illustrate how far the U.S. housing recovery has come, and also how much further it has to go as we continue to face some significant headwinds in terms of credit availability, rising costs for lots and labor, and uncertainties regarding Washington policymaking," said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C.
The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of activity.
"Smaller metros are leading the way to a housing recovery, accounting for 43 of the top 50 markets on the current LMI," said NAHB Chief Economist David Crowe. "This is very much in keeping with the results of our previous index for improving markets, and is an indication of the extent to which local economic conditions dictate the strength of individual housing markets."
"The housing markets of 118 metros scored by the LMI this month show activity levels of at least 90% of their previous norms - a very encouraging sign of things to come," said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report.
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