Improving Markets Index Shows Modest Increase

The NAHB/First American Improving Markets Index (IMI) increased in July to 84 from the June level of 80. The modest net increase was the result of an addition of 11 new metropolitan areas and a loss of seven areas. Six of the seven MSAs that were dropped from the list were because house prices fell back below their previous low and one because single-family building permits dropped below their former low point. Up to June, the average house price increases for the six dropped had been 0.2% compared to a 3.1% average increase for the MSAs remaining on the list. Harrisonburg VA fell off the list because permits fell below their last trough in October 2011.

The MSAs on the list represent 33 states and the District of Columbia and continue to show broad geographic distribution. House prices remain the most fragile of the three components of the IMI. Average permit growth was 4.1% from their respective troughs; average price growth was 3.1% and average employment growth is 4.8% from the respective troughs. National house price indexes have shown some positive movements in the past two months and these results should begin to show up in individual metropolitan areas as well.

NAHB expects the housing recovery to continue to be best shown through individual markets experiencing modest but continued growth in house price, building permits and employment.


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0 replies

  1. Thanks for the data. Can’t wait to see MY county (Citrus, FL) to go “green” (smile)

  2. I’m not a resident of the USA. Would you mind telling me your thoughts on why your residential sector is not coming back as strongly as one would expect. Why aren’t people buying? Is it because they are unable to access credit? Are they unwilling to take a risk due to job security, or has the idea of home ownership become so damaged that people just don’t want a home of their own and renting has become more popular?

  3. There is certainly significant pent-up demand, as we have tracked on Eye on Housing. These are households, both possible owners and renters, who have not formed but were expected to do so due to population growth. Recent polling data suggest that the aspirational goal of homeownership remains strong. So the relative weakness of housing demand related to homebuyers is due to job market weakness and tight credit for prospective homebuyers. And certainly policy uncertainty is not helping. Rental demand is growing, as are rents. Finally, new home sales are be held back by lack of access for credit to home builders, who if they can’t obtain AD&C credit, can’t build and sell a home, even where housing demand is improving.


  1. 84 U.S. Markets Improving In July : Greenway Asbury Blog
  2. Eye on the Economy: Can Housing Improvement Persist in a Slowing Economy? « Eye on Housing
  3. Eye on the Economy: Can Housing Improvement Persist in a Slowing Economy? | Wood on Fire – Topics of Lumber Industry
  4. Craig Kamman — NAHB's Improving Markets Index for July 2012

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