Metropolitan Markets Improve Slightly

The April NAHB/First American Leading Market Index rose one point to .88 from .87 in March. The index measures how close individual markets and the US market are relative to their last normal market activity. A total of 153 markets or about half of all markets were at or above the national index and 59 markets’ indexes were at or above one, meaning those markets had met or exceeded the last period of normal market activity.

The index measures single-family permits, home prices and employment in the past 12 months and divides that by the last normal annual level. For permits and prices, the last normal period is 2000-2003 and for employment 2007.

The index has been moving steadily upward for two years from a low of .78 in April 2012. At the same time, the number of markets at or above their last normal level of activity increased from 34, with 19 in energy producing states, to 59, with 30 in energy producing states (Texas, Louisiana, Montana, North Dakota, Oklahoma and Wyoming). The slight broadening into states with other economic bases is consistent with broader economic growth in the US.

Most markets (308 or 88%) have seen a recovery back to normal in home prices but employment lags,; 40 markets or 11% are back or above normal employment levels. Housing is even further behind; only 24 markets or 7% are back to or above normal levels of single-family permit issuance.

LMI April



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