Nationwide, the economy and housing market are functioning at a level about 87 percent of their pre-crisis normal levels, according to the National Association of Home Builders (NAHB) and First American’s Leading Markets Index released this week, which measures metro markets based on housing permits, home prices, and employment.
Fifty-nine of the 350 metro markets are at or above their pre-crisis norms, according to the index, up from 58 metros last month. At the same time, 130 markets are at least 90 percent of their pre-crisis levels, according to NAHB.
A little less than half—about 45 percent—of the normalized markets are located in areas benefitting from strong employment in the energy sector.
"The strong energy sector is at the forefront of the recovery and centered in many small and mid-sized markets in Texas, Louisiana, North Dakota, and Wyoming," said David Crowe, chief economist at NAHB. He also pointed out that eight of the top 10 markets in NAHB’s index are located in these four states.
A look at the unemployment rates in these states supports NAHB’s findings. Texas' unemployment rate is 6 percent; Wyoming’s is 4.4 percent; and North Dakota’s is a meager 2.7 percent, according to December data from the Bureau of Labor Statistics.
Among major metros, Baton Rouge, Louisiana, ranked highest on NAHB’s Leading Markets Index with a score of 1.41, indicating the market is "41 percent better than its last normal market level." Honolulu, Hawaii; Oklahoma City; Austin, Texas; Houston, Texas; Harrisburg, Pennsylvania; and Pittsburgh, Pennsylvania, also ranked near the top.
A few smaller markets outranked the best of the larger metros. Odessa and Midland, Texas, both scored at least 2.0, indicating their markets are performing twice as well as they did before the economic downturn, according to NAHB.
"Despite the cold weather that has constrained economic and housing activity across much of the nation this winter, markets are returning to normal levels," said Kevin Kelly, chairman of NAHB. "As the job and housing markets continue to mend and the onset of spring releases the pent-up demand for new homes, this will bode well for the remainder of 2014."