The number of markets listed on the ""National Association of Home Builders'"":http://www.nahb.org/default.aspx (NAHB) Improving Markets Index (IMI) continued to decline in August, though the index still sits well ahead of where it was last year, the association reported.[IMAGE]
The index, compiled by NAHB and ""First American"":http://www.firstam.com/, tracks three major indicators--employment, home prices, and housing permits--across the United States to determine which metro areas have shown growth (from their respective troughs) for at least six straight months.
""While the number of improving housing markets this August remains well ahead of the same month last year, the index is affected by seasonal softening in home prices just as we saw happen in 2012. The metros that fell off the list this month originally qualified with very small home price improvements that have since slipped back,"" explained NAHB chief economist David Crowe. ""As house prices return to more normal levels in fully recovered markets, further IMI advancements will be more modest.""
According to NAHB, a total of 247 markets across 49 states and the District of Columbia qualified for the list in August, eight short of July's total but nearly three times the number reported in August 2012. Three new metros made August's list: Kankakee, Illinois; and Atlantic City and Ocean City, both in New Jersey. Eleven markets were dropped, including Lancaster, Pennsylvania; Tyler, Texas; and St. Cloud, Minnesota.
Connecticut was the only state not to be represented on the list in August.
""In all, 244 metros that were listed as improving in July retained that status in August, and this is an encouraging sign of the continuing housing recovery,"" said NAHB chairman Rick Judson. ""That said, we know that the pace of improvement is being hampered somewhat by challenges that builders and buyers are experiencing with regard to the availability of credit, material, lots for development and labor.""