The country has now reached about 88
percent of what is considered its normal level of economic and housing activity
the National Association of Home Builders (NAHB) said on Tuesday. The NAHB/First American Title Insurance Leading
Markets Index (LMI) rose to .88 in April from .87 in March. In April 2013 the LMI was at .82.
49 of the 351 metro markets
tracked by the index have reached or exceeded 100 on the index indicating that
they have returned to at least their last normal levels of economic and housing
activity. Three hundred of the metro areas have improved their index numbers since
"We have always said this recovery
would be a slow but steady one, and I think this index continues to prove
this," said NAHB Chief Economist David Crowe. "The year started a bit
slower than anyone could have anticipated but we still expect housing to play a
greater role in aiding the overall economic recovery this year. The job market
continues to mend and that should spur a steady release of pent up demand among
The LMI identifies where markets are relative
to their previous normal levels of activity.
NAHB takes each area's average employment, housing permits, and home
price levels for the past 12 months and divides each by its annual average
during the last period of normal growth.
For single-family permits and home prices that would be 2000-2003 and
for employment the year 2007 is used.
The three components are then averaged to provide an overall score for
each market. U.S. Census Bureau provides
the information on housing permits, employment data comes from the Bureau of
Labor Statistics, and Freddie Mac is the source of home price information.
Cities at the forefront of the energy
boom continue to lead the LMI. Baton
Rouge remained the top performer among major metros with a LMI of 1.41 - or 41
percent better than its last normal market level and the best performing small
cities were Odessa and Midland, Texas with scores of 2.0 or better, double
their strength prior to the recession. Other major metros with scores above 100 include
Honolulu, Oklahoma City, Austin and Houston, Los Angeles, San Jose, Calif. and
Harrisburg while other top small metros are Bismarck, North Dakota; Casper, Wyoming,
and Grand Forks, North Dakota, all three beneficiaries of the energy boom.
"Our builder members tell us they
are starting to see more optimism in the field," said NAHB Chairman Kevin
Kelly. "Mortgage rates are low, home prices are affordable and with the
harsh winter behind us our latest surveys show builders are feeling more
bullish about future sales conditions."