The NAHB/First American Leading Markets Index remained at .88 for the nation from May to June but was up 6 points from .82 in June 2013. The index measures progress back to and beyond normal economic and housing markets for 351 metropolitan areas. Three out of ten metros did see a monthly increase in their individual indexes and 83 percent have seen an increase in the past year.

Markets already past their last level of normal are concentrated in energy producing markets where jobs are plentiful, house prices have risen beyond the levels of the early 2000s and housing construction has surpassed early 2000 levels when markets were more stable. At the other end of the spectrum, markets still only two-thirds of the way back to normal are located in the industrial Midwest or in the sand states most devastated by the boom and bust.

The slow progress back to normal is primarily the result of the slow single-family housing market. Of the three components in the index, house prices are 26 percent above their early 2000s levels; the last time housing markets were in reasonable balance. Employment levels are within 5 percent of their normal levels last seen in 2007. The ingredient left behind is single-family housing permits, which are at 43 percent of their last normal market in early 2000s. Only 7 percent of the markets measured have experienced improvement in housing permits that is better than the other two measures, employment and house prices.

Tags: economics, home building, housing, Leading Markets Index