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HOUSING
MARKET
RUNNING AT
85% OF NORMAL,
PRE-RECESSION
ACTIVITY
A new index from First American and
the National Association of Home Builders
(NAHB) suggests that about one in seven
housing markets have returned to or surpassed
their pre-recessionary levels of activity.
The new Leading Market Index (LMI),
released for the first time last month, measures
employment growth data from the Bureau of
Labor Statistics, home price appreciation data
from Freddie Mac, and single-family housing
permit growth from the Census Bureau to
measure overall improvements in each market.
While the LMI helps illustrate how far
the recovery has come in the last several years,
NAHB chairman Rick Judson said it also
measures "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."
According to the association, the index
registered a score of 0.85 nationwide,
indicating that the national housing market is
running at 85 percent of normal activity.
Of the nearly 350 metro markets examined,
52 have reported levels of activity at least
equal to those before the recession hit. What's
more, housing markets in 118 metros scored
0.9 or higher, which Kurt Pfotenhauer, vice
chairman of First American Title Insurance
Co., described as "a very encouraging sign of
things to come."
Baton Rouge, Louisiana, ranked highest
on the list of improved major markets, posting
an index score of 1.41—41 percent better
than its last normal market level. Widening
the scope to include smaller metros, both
Odessa and Midland, Texas, scored 2.0 or
better, meaning their markets have doubled in
strength compared to pre-recession years.
"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."
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A F F I L I A T I O N S :
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