The latest National Association of Home Builders/First American Leading Market Index revealed the housing recovery is moving forward.
Based on current employment, price and building permit data, the nationwide average score is operating at 89 percent of normal housing market activity. Additionally, 78 percent of housing markets showed year-over-year improvement, and 56 out of approximately 350 metro areas across the nation met or exceeded their most recent normal levels of housing and economic activity. Compared with August 2013, this current data represented a gain of seven new markets reaching normal activity.
“In the 22 metros where permits are at or above normal, the overall index indicates that these markets have fully recovered,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co. “This finding shows the impact that an uptick in permits can have on the overall health of markets.”
Baton Rouge, La., had the highest LMI score among major metro areas, reaching a reading of 1.39. This indicates the city is operating at 39 percent above its last normal levels of economic and housing activity. Here are the top 10 major metro markets: Baton Rouge; Honolulu; Oklahoma City; Houston; Austin, Texas; Los Angeles; San Jose, Calif.; Salt Lake City; Des Moines, Iowa; and New Orleans.
Improvements in the job market have pushed developments in the housing market. National Association of Home Builders Chairman Kevin Kelly said pent up demand of home buyers should be released as employment continues to expand.
“The big bright spot is employment, where the number of metro areas having reached or exceeded their norms grew from 26 to 46 in a year,” said NAHB Chief Economist David Crowe.
June produced some employment gains, but some consumers are waiting for stronger economic growth before they start their home search.