WASHINGTON – Research from the National Association of Home Builders/First American Leading Markets Index (LMI) found that nearly 17% of roughly 350 U.S. metro markets returned or exceeded their last usual levels of economic and housing activity. The figure records a net gain of 11 metros year over year.
The index's national tally bumped to .88 from a reading in March of .87. The national average is operating at 88 percent of normal economic and housing activity, based on current permit, price and employment data. In addition, 28 percent of metro areas recorded growing scores this month, and 83 percent reported gains over the past year.
"I think the big news here is that regions outside of the energy states continue to gain ground," said NAHB Chief Economist David Crowe. "It's a promising sign to see areas like Los Angeles and San Jose joining the top ten largest MSAs showing a recovery. We still expect 2014 to be a strong year for housing and to aid in the overall economic recovery. The job market continues to mend and with that we will see a steady release of pent up demand of buyers."
Baton Rouge, LA, continues to top the list of major metros on the LMI, with a score 42 percent better than its last normal market level. Other top major metros include Honolulu; Oklahoma City; Houston; Austin, TX; San Jose, CA; and Harrisburg, PA. All of these cities’ LMI scores designate that their market activity now surpasses previous averages.
The LMI transfers the emphasis from identifying markets that have recently begun to recover, which was the goal 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 economic and housing activity. In calculating the LMI, NAHB uses employment data from the Bureau of Labor Statistics, house price appreciation data from Freddie Mac and single-family housing permits from the U.S. Census Bureau.
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