56 Metros Reach 'Normal' Housing Levels
June 10, 2014
About 16 percent of U.S. housing markets are at or above their normal levels this month, according to the National Association of Home Builders/First American Leading Markets Index.
In June, 56 of about 350 metro markets nationwide had reached their previous "normal" levels, a gain of about nine metros year-over-year.
More than one-third of the housing markets are operating at a level of at least 90 percent of their previous norms, says Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report.
About 30 percent of the metro areas saw their scores rise in June, and 83 percent have shown an improvement over the past year, NAHB reports. The LMI measures 350 metros for whether they’re approaching or exceeding their previous normal levels of economic and housing activity.
"Markets are gradually returning to normal levels of housing and economic activity," says NAHB Chairman Kevin Kelly. "When we see more sustainable levels of job growth, this will unleash pent-up demand and bring more buyers into the marketplace."
Baton Rouge, La., continues to top the list of major metros on the LMI, with a housing market that is performing at a rate of 40 percent better than its last normal market level. Other top-performing housing markets, where activity now equals or exceeds previous norms, include Honolulu; Oklahoma City; Austin, Texas; Houston; Los Angeles; San Jose, Calif.; Harrisburg, Pa.; Pittsburgh; and Salt Lake City.
"Of the three components in the LMI, the one lagging is single-family housing permits, which is only 43 percent of the way back to normal, while home prices are 26 percent above their last normal level and employment is at 95 percent of its previous norm," says NAHB chief economist David Crowe. "In the 22 metros where permits are at or above normal, the overall index indicates that these markets have fully recovered."
For smaller metros, Odessa and Midland, Texas, boast markets that are double their strength prior to the recession. Other small-market leaders are Bismarck, N.D.; Casper, Wyo.; and Grand Forks, N.D., NAHB reports.
Updated: August 16, 2019