The NAHB/First American Financial Improving Markets Index (IMI) rose to 76 in January from a December level of 41. Forty metropolitan areas were added to the list and five dropped off. The additions continued the trend of mostly smaller metropolitan areas recovering enough to make the list, although some notable large metros also joined.
To be listed on the IMI, a metropolitan area must see a six month improvement in single-family permits, house prices and employment. The index was initiated in September 2011 and has risen every month but the January increase was the largest.
Two-thirds of the metropolitan areas have populations below one-half million and over 80 percent have populations under one million. Thirty-one states and the Washington DC metropolitan area are represented on the list (which expands the state list to 32 since the metro area includes counties in Maryland). The dominance of smaller places and the geographic spread is compelling evidence that the current economic and housing recovery is diverse. While a few larger metropolitan areas were on the list and more were added in January, improvements in diverse and relatively small locations have been insufficient to show similar positive changes in national trends.
The expansion in the number of places and increase in larger places has helped to show some slim but positive improvements in national housing indicators and NAHB expects the trend to continue.
Large metro areas added this month include Dallas, joining 10 other Texas metropolitan areas; Philadelphia, joining the state’s second largest metro Pittsburgh; Minneapolis, the largest metro in Minnesota and the first entry from Minnesota; Denver, the largest Colorado metro and joining Boulder and Fort Collins; and Cincinnati, the third largest metro in Ohio and joining Toledo on the list.
The five places that fell off the list were: Anchorage, Scranton and Charleston WV because house prices dipped below their previous trough and Canton OH and Fort Wayne IN because permits dipped below their previous trough.