Markets in 119 of the approximately 340 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity in the first quarter, according to the NAHB/First American Leading Markets Index (LMI) released today. This represents a year-over-year net gain of 45 markets.
The index’s nationwide score ticked up to .95, meaning that based on current permit, price and employment data, the nationwide average is running at 95% of normal economic and housing activity. Meanwhile, 86% of markets have shown an improvement year over year.
“Housing markets continue to recover gradually, edged along by a firming economy, solid job creation and low mortgage interest rates,” said NAHB Chairman Ed Brady. “We expect to improve at a slow, but steady pace throughout the year.”
“Among the LMI components, house prices continue to make the most widespread gains, with 324 markets having returned to or exceeded their last normal levels. Meanwhile, 66 metros have reached or exceeded normal employment activity,” said NAHB Chief Economist Robert Dietz. “Single-family permits have inched up to 49% of normal activity, but remain the lagging part of the index.”
Baton Rouge, La., continues to top the list of major metros on the LMI, with a score of 1.54 – or 54% better than its last normal market level. Other major metros leading the list include Austin, Texas; Honolulu; Houston; and San Jose, Calif. Rounding out the top 10 are Oklahoma City; Los Angeles; Nashville, Tenn.; Charleston, S.C.; and Salt Lake City.
Among smaller metros, both Midland and Odessa, Texas, have LMI scores of 2.0 or better, meaning that their markets are now at double their strength prior to the recession. Also at the top of that group are Manhattan, Kansas; Walla Walla, Wash.; and Wheeling, W.Va.; respectively.
Here are more details on LMI methodology and history.