Improving Market Index Leaps To Include 291 U.S. Housing Markets
As the housing market goes, so goes the broader U.S. economy.
The housing market bottomed in October 2011 and has since shown steady, consistent growth. It's no surprise, therefore, that the U.S. economy has done the same, creating a definitive end to last decade's recession.
According to the National Association of Home Builders (NAHB), the economic revival is spreading from city-to-city. 80% of the country's major metropolitan areas are now "improving" -- a term reserved for cities meeting specific growth metrics. It's a near 3-fold improvement versus one year ago.
Improving Market Index : "Measurable And Sustained Growth"
Each month, the National Association of Homebuilders publishes its Improving Market Index (IMI), a report which highlights metropolitan area in which general general economic growth is occurring.
In this way, the IMI is not a housing market metric, nor it is home valuation tracker as one might classify the S&P Case-Shiller Index or the Federal Home Finance Agency's Home Price Index; which may report such housing market facts as "home prices are rising in Seattle, Washington".
Rather, the NAHB's Improving Market Index pools three separate data series for each of its 361 U.S. metropolitan areas and determine whether the local economy of is currently expanding or contracting. Only when each of the three data points can demonstrate measurable and sustained growth will the NAHB deem the area "improving".
The Improving Market Index uses the following three data series :
- Employment data from the Bureau of Labor Statistics
- Home Price Growth from Freddie Mac
- Single-Family Housing Growth from the U.S. Census Bureau
To be considered "improving" and to be included on the NAHB Improving Market Index list, a given metropolitan area must show growth in each of the three series from the immediate month prior, and at least six months must have passed since each of the series' most recent troughs.
Los Angeles, California; Chicago, Illinois Improving
The number of U.S. metropolitan areas on the NAHB Improving Markets Index list climbed by 44 in September to 291 overall. This marks the second-largest monthly gain since the index launched two years ago.
Newly-added cities to the IMI for September include :
- Bloomington, Indiana
- Raleigh, North Carolina
- Cincinnati, Ohio
- Charlottesville, Virginia
- Milwaukee, Wisconsin
The inclusion of these 5 cities on the Improving Market Index list is significant because each was hit during last decade's housing market downtown, as were the following five cities which have maintained their "improving" classification for September :
- Phoenix, Arizona
- San Francisco, California
- Las Vegas, Nevada
- Philadelphia, Pennsylvania
- Seattle, Washington
The September 2013 Improving Market Index includes cities from all 50 states for the first time, and from the District of Columbia. 49 new metropolitan areas were added to the index for January. Just 5 dropped off.
Those five cities were Kankakee, Illinois; Burlington, Jacksonville, and Winston, North Carolina; and, Danville, Virginia.
Get Today's Mortgage Rates
For bona fide real estate investors and today's active home buyers, the Improving Market Index can serve as a real estate opportunity roadmap. It lists cities experiencing broad-based economic growth which, not surprisingly, may also be good cities in which to invest in real estate.
Home prices are rising in most U.S. markets and mortgage rates have followed. If your 2013 housing plans include buying new property, you may find your best mortgage rates and lowest long-term costs by acting sooner rather than later. Get started with a rate quote. See how today's mortgage rates can fit your household budget.