Housing Recovery Continues at Slow Pace According to Latest Leading Markets Index

Markets in 56 of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders/First American Leading Markets Index (LMI), released today. This represents a year-over-year net gain of seven markets.

The index’s nationwide score moved up slightly to .89, meaning that based on current permit, price and employment data, the nationwide average is running at 89 percent of normal economic and housing activity. Meanwhile, 78 percent of markets have shown an improvement year-over-year.

In The Upstate, Greenville is at 89, up from 86 at the beginning of the year.  Continuing to hold back the Greenville market is permits, which remain at 57.  House prices are at 117, largely a function of lack of supply caused by sluggish starts.  Jobs are at 94 percent.  Spartanburg is at 84, down slightly and also being held back by slow starts.  Anderson is not longer tracked as a separate market and is included in the Greenville data.

“Things are gradually improving,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “As the job market grows, we expect to see a steady release of pent up demand of home buyers.”

Baton Rouge, La., continues to top the list of major metros on the LMI, with a score of 1.39 – or 39 percent better than its last normal market level. Other major metros leading the list include Honolulu; Oklahoma City; Houston and Austin, Texas. Rounding out the top 10 are Los Angeles; San Jose, Calif.; Salt Lake City; Des Moines; and New Orleans.

“With the national tally only reaching 43 percent of normal, single-family housing permits continue to be the lagging component of the index,” said NAHB Chief Economist David Crowe. “The big bright spot is employment, where the number of metro areas having reached or exceeded their norms grew from 26 to 46 in a year.”

“In the 22 metros where permits are at or above normal, the overall index indicates that these markets have fully recovered,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report. “This finding shows the impact that an uptick in permits can have on the overall health of markets.”

Looking at smaller metros, both Odessa and Midland, Texas, boast LMI scores of 2.0 or better, meaning their markets are now at double their strength prior to the recession. Also leading the list of smaller metros are Bismarck, N.D.; Grand Forks, N.D; and Casper, Wyo., respectively.

The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of economic and housing activity. More than 350 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.

Editor’s Note:

In calculating the LMI, NAHB utilizes employment data from the Bureau of Labor Statistics, house price appreciation data from Freddie Mac and single-family housing permits from the U.S. Census Bureau. The LMI is published quarterly on the fourth working day of the month, unless that day falls on a Friday — in which case, it is released on the following Monday.

For historical information and charts, please go to nahb.org/lmi.

Economic Index Shows Metro Markets Continuing on Path to Normalcy

Greenville Holds Steady at 88 Percent of Normal, Spartanburg is at 85 percent

Of the 351 metro markets measured, 300 have seen year-over-year economic gains, according to the National Association of Home Builders/First American Leading Markets Index (LMI), released today. The index shows that 59 metros have fully returned to or even exceeded their last normal levels of economic and housing activity.

The nationwide economic score rose slightly to .88 from a revised April reading of .87. This means that based on current permit, price and employment data, the nationwide average is running at 88 percent of normal economic and housing activity. The index showed an overall reading of .82 a year ago.

In Greenville, permits are at 54 percent of normal, jobs are at 93 percent of normal, and housing prices are at 116 percent of normal.  “This data indicates that Greenville, like many markets in the country, has an insufficient supply of new housing to meet demand,” Mike Freeman, GMB, President of the Home Builders Association of Greenville, said.  Greenville was at its lowest, in relation to normal, in the fourth quarter of 2011 at 78 percent.  Greenville peaked at 111 percent of normal in the third and fourth quarter of 2006.

Spartanburg, which is a separate market in the study, is at 85 percent of normal.  Permits in Spartanburg are at 54 percent, jobs are at 96 percent, and housing prices are at 105 percent.  Spartanburg peaked higher than Greenville, at 115 percent of normal, also in 2006.  Spartanburg also dropped further than Greenville, to 73 percent of normal, where it remained for most of 2011.  Spartanburg has been a “most improved” market, rising rapidly over the last year.

“We have always said this recovery would be a slow but steady one, and I think this index continues to prove this,” said NAHB Chief Economist David Crowe. “The year started a bit slower than anyone could have anticipated but we still expect housing to play a greater role in aiding the overall economic recovery this year. The job market continues to mend and that should spur a steady release of pent up demand among home buyers.”

Keeping its top position of major metros on the LMI was Baton Rouge, La. with a score of 1.41 – or 41 percent better than its last normal market level. Other major metros whose LMI scores indicate that their market activity now exceeds previous norms include Honolulu, Oklahoma City, Austin and Houston, Texas, as well as Los Angeles and San Jose, Calif. and Harrisburg, Pa.

“Our builder members tell us they are starting to see more optimism in the field,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “Mortgage rates are low, home prices are affordable and with the harsh winter behind us our latest surveys show builders are feeling more bullish about future sales conditions.”

“We keep waiting for the economy to get into a higher gear,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report. “This report, along with other recent economic news, may mean we are finally there.” Smaller metros experiencing an energy boom continue to lead the recovery. Odessa and Midland, Texas boast LMI scores of 2.0 or better, with their markets now at double their strength prior to the recession. Also at the top of the list of smaller metros are Bismarck, N.D.; Casper, Wyo.; and Grand Forks, N.D., respectively.

The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of economic and housing activity. More than 350 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.

Leading Markets Index Edges Higher in February as More Markets Recover


Markets in 58 out of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders/First American Leading Markets Index (LMI), released today. This represents a net gain of two from the previous month. The index’s nationwide score ticked up a percentage point to .87. This means that based on current permits, prices and employment data, the nationwide average is running at 87 percent of normal economic and housing activity.

In the Upstate, Greenville ranks 150 among the nation’s housing markets, down from 145 in December.  It’s overall score is .87, or 87 percent of normal and equal to the national average.  Holding our market back is permits, which are 55 percent recovered, down slightly from January.  However, prices are 115 percent of normal, an indication that demand is now exceeding supply.  Employment remains at 92 percent of normal.

Spartanburg is ranked 191 with a score of .84.  Permits are 54 percent recovered, and housing prices are at 104 percent of normal and rising quickly.  Employment is at 93 percent of normal. 

Anderson is not ranked because housing price data is not currently available.  However, permits in Anderson are at 42 percent of normal and employment is at 91 percent of normal.

Click here to view data on all 350 housing markets.

“Housing markets across the nation are continuing their slow and steady climb back to normal levels,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “As employment and consumer confidence slowly improves, this is spurring pent-up demand among potential buyers.”

“Firming home prices are hastening the return of normal economic and housing activity in an increasing number of markets,” said NAHB Chief Economist David Crowe. “The healthiest markets continue to be centered in smaller metros that boast strong local economies, particularly in the oil and gas producing states of Texas, North Dakota, Louisiana and Wyoming.”

“We are pleased about the continued market trends, highlighted by the fact that eighty-five percent of all metropolitan areas have shown signs of improvement over the past year,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report.

Baton Rouge, La., tops the list of major metros on the LMI, with a score of 1.41 – or 41 percent better than its last normal market level. Other major metros at the top of the list include Honolulu, Oklahoma City, Austin and Houston, Texas, as well as Harrisburg, Pa. and Pittsburgh – all of whose LMI scores indicate that their market activity now exceeds previous norms.

Looking at smaller metros, both Odessa and Midland, Texas, boast 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 the list of smaller metros are Bismarck, N.D.; Casper, Wyo.; and Grand Forks, N.D., respectively.

The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of economic and housing activity. More than 350 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.

Editor’s Note: In calculating the LMI, NAHB utilizes employment data from the Bureau of Labor Statistics, house price appreciation data from Freddie Mac and single-family housing permits from the U.S. Census Bureau. The LMI is published on the fourth working day of each month, unless that day falls on a Friday — in which case, it is released on the following Monday.

Housing Markets Continue to Show Gradual Improvement


Markets in 56 out of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders/First American Leading Markets Index (LMI), released today. This represents a net gain of two from the previous month. The index’s nationwide score of .86 indicates that, based on current permits, prices and employment data, the nationwide average is running at 86 percent of normal economic and housing activity.

“More markets are slowly returning to normal levels and we expect this upward trend to continue as an improving economy and pent-up demand brings more home buyers back into the marketplace,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “Policymakers must be careful to avoid actions that would harm consumer confidence and impede the ongoing recovery.”

“Forty-five percent of metro areas are recovering at a faster pace than the nation as a whole, with smaller markets leading the way,” said NAHB Chief Economist David Crowe. “Of the 56 markets that are at or above normal levels, 48 of them have populations that are less than 500,000, and many of these local metros are fueled by a strong energy sector, which is producing solid job and economic growth.”
 

In the Upstate, Greenville ranks 145 among the nation’s housing markets, up from 150 in December.  It’s overall score is .87, or 87 percent of normal and better than the national average.  Holding our market back is permits, which are 56 percent recovered.  However, prices are 114 percent of normal, an indication that demand is now exceeding supply.  Employment is at 92 percent of normal.

Spartanburg is ranked 186 with a score of .84.  Permits also are 55 percent recovered, and housing prices have just exceeded normal.  Employment is at 93 percent of normal.  Spartanburg is among of the fastest-recovering markets in the nation.

Anderson is not ranked because housing price data is not currently available.  However, permits in Anderson are at 43 percent of normal and employment is at 91 percent of normal.

Click here to view data on all 350 housing markets.

“More than 35 percent of all the markets on this month’s LMI are operating at a capacity of 90 percent or better of previous norms, which is a good sign that the housing recovery will continue to pick up steam in 2014,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report. Baton Rouge, La., tops the list of major metros on the LMI, with a score of 1.42 – or 42 percent better than its last normal market level. Other major metros at the top of the list include Honolulu, Oklahoma City, Austin and Houston, Texas, as well as Harrisburg, Pa. and Pittsburgh – all of whose LMI scores indicate that their market activity now exceeds previous norms.

Looking at smaller metros, both Odessa and Midland, Texas, boast 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 the list of smaller metros are Casper, Wyo.; Bismarck, N.D.; and Grand Forks, N.D., respectively.

The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of economic and housing activity. More than 350 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.

Editor’s Note: In calculating the LMI, NAHB utilizes employment data from the Bureau of Labor Statistics, house price appreciation data from Freddie Mac and single-family housing permits from the U.S. Census Bureau. The LMI is published on the fourth working day of each month, unless that day falls on a Friday — in which case, it is released on the following Monday.

Housing Markets Continue Slow Climb Back to Normal


Markets in 54 out of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders/First American Leading Markets Index (LMI), released today. The index’s nationwide score of .86 indicates that, based on current permits, prices and employment data, the nationwide market is running at 86 percent of normal economic and housing activity.

In the Upstate, Greenville ranks 150 among the nation’s housing markets.  It’s overall score is .87, or 87 percent of normal and better than the national average.  Holding our market back is permits, which are 55 percent recovered.  However, prices are 114 percent of normal, an indication that demand is now exceeding supply.  Employment is at 92 percent of normal.

Spartanburg is ranked 181 with a score of .84.  Permits also are 55 percent recovered, and housing prices have just exceeded normal.  Employment is at 93 percent of normal.

Anderson is not ranked because housing price data is not currently available.  However, permits in Anderson are at 42 percent of normal and employment is at 91 percent of normal.

Click here to view data on all 350 housing markets.

The LMI figures for November showed that 55 housing markets were operating at or above their last normal levels and the nationwide market was operating at 85 percent of normal growth.

LMI data for the two months were released simultaneously because of the delay in collecting data during the partial government shutdown in October.

“This index shows that most housing markets across the nation are continuing a slow, gradual climb back to normal levels,” said Chairman Rick Judson, a home builder from Charlotte, N.C. “Policymakers must guard against actions that could impede or even reverse the modest gains of the past year.”

Noting that smaller metros accounted for most of the 54 markets on the current LMI that are at or above normal levels, Chief Economist David Crowe said that “smaller markets are leading the way, particularly where energy is the primary economic driver. Nearly half of the markets in the top 54 are in the energy states of Texas, Louisiana, North Dakota, Wyoming and Montana.”

“The fact that more than 125 markets on this month’s LMI are showing activity levels of at least 90 percent of previous norms bodes well for a continuing housing recovery in 2014,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report.

Baton Rouge, La., tops the list of major metros on the LMI, with a score of 1.42 – or 42 percent better than its last normal market level. Other major metros at the top of the list include Honolulu, Oklahoma City, Austin and Houston, Texas, as well as Pittsburgh – all of whose LMI scores indicate that their market activity now exceeds previous norms.

Looking at smaller metros, both Odessa and Midland, Texas, boast 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 the list of smaller metros are Casper, Wyo.; Bismarck, N.D.; and Grand Forks, N.D., respectively.

The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of economic and housing activity. More than 350 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.

Editor’s Note: In calculating the LMI, employment data from the Bureau of Labor Statistics, house price appreciation data from Freddie Mac and single-family housing permits from the U.S. Census Bureau were used. The LMI is published on the fourth working day of each month, unless that day falls on a Friday — in which case, it is released on the following Monday.

For historical information and charts, please go to nahb.org/lmi.