Data from the National Association of Home Builders released this week show that 56 out of about 350 metropolitan areas in the United States experienced a return to normal levels, or exceeded these levels of economic and housing activity in the recently-concluded June quarter of 2014.
Overall, the nationwide First American Leading Markets Index (LMI) improved a bit to .89 – this means that the United States is operating at 89 percent of what could be considered normal economic and housing activity. While only a small percentage of markets returned to or exceeded normal levels, 78 percent of markets reported an improvement on a year-over-year basis, according to the NAHB’s data.
“Things are gradually improving,” posited NAHB Chairman Kevin Kelly. “As the job market grows, we expect to see a steady release of pent up demand of home buyers.” NAHB chief economist David Crowe, however, acknowledged that single-family housing permits are still the main variable dragging against the LMI’s growth.
Conversely, Crowe added that employment was the main variable that drove improvement, saying that the number of metro markets which reported normal or above-normal employment statistics increased from 26 last year to 46 as of the latest report.
A closer look at the NAHB’s analytic report shows that Baton Rouge, La. Is still the leading metro on the LMI, with a score of 1.39 , or 39 percent higher than the metro’s previous normal market level. Other leading metros on the index included Honolulu, Oklahoma City, Houston and Austin, Tex., Los Angeles and San Jose, Calif., Salt Lake City, Des Moines, and New Orleans.
The NAHB culls data from the Bureau of Labor Statistics, as well as housing stats from Freddie Mac and the U.S. Census Bureau in order to calculate the LMI, which is published on a quarterly basis.