56 out of approximately 350 metro areas across the nation met or exceeded their most recent normal levels.
Chicago, IL (PRWEB) August 14, 2014
The Federal Savings Bank was intrigued by the latest National Association of Home Builders/First American Leading Market Index which revealed that the housing recovery is moving forward albeit at a slow pace.
For August, the nationwide LMI was at a reading of 0.89, an increase from a score of 0.88 in June and 0.84 in August 2013. This score means that based on current employment, price, and building permit data, the nationwide average score is operating at 89 percent of normal housing market activity. Additionally, 78 percent of housing markets showed year-over-year improvement, and 56 out of approximately 350 metro areas across the nation met or exceeded their most recent normal levels of housing and economic activity. Compared to August 2013, this current data represented a gain of seven new markets reaching normal activity.
"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. "This finding shows the impact that an uptick in permits can have on the overall health of markets."
Baton Rouge, Louisiana, had the highest LMI score among major metro areas, reaching a reading of 1.39. This indicates the city is operating at 39 percent above its last normal levels of economic and housing activity. Here are the top 10 major metro markets:
- Baton Rouge
- Oklahoma City
- Austin, Texas
- Los Angeles
- San Jose, California
- Salt Lake City
- Des Moines, Iowa
- New Orleans
Among smaller markets, Odessa and Midland, Texas both had scores greater than 2. The cities were followed by Bismarck, North Dakota; Grand Forks, North Dakota; and Casper, Wyoming.
Employment is Boosting the Housing Recovery
Improvements in the job market have pushed developments in the housing market. NAHB Chairman Kevin Kelly said pent-up demand of home buyers should be released as employment continues to expand.
"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," said NAHB Chief Economist David Crowe.
According to the U.S. Bureau of Labor Statistics, there was a slight increase in national job openings in June, which rose to 4.7 million from 4.6 million in May. There was also year-over-year growth for total nonfarm, private, and government job openings and across various industries. Hires also saw a small change, rising from 4.7 million in May to 4.8 million in June.
While national employment and housing figures are doing well, the Financial Times reported some job and housing markets are still lagging behind, particularly Sacramento, California. Arora Wheeler, a stay-at-home mother and Sacramento resident, told the news source she believes many people cannot afford to buy a home because they cannot find jobs, and her daughter, a recently graduated pharmacist technician, is among those on the job hunt.
June produced employment gains, but some consumers are waiting for stronger economic growth before they start their home search.
Contact the Federal Savings Bank, a veteran owned bank, for information about first-time home buyer programs that can help you get the home you desire while the housing and economic recoveries continue at a more moderate pace.