List of Improving Housing Markets Eclipses 100 in October
A total of 103 housing markets across the United States qualified to be listed on the National Association of Home Builders/First American Improving Markets Index (IMI) for October, released today. This is up from 99 markets listed as improving in September and is the largest number of metros on the IMI since it was created one year ago. A total of 33 states and the District of Columbia are represented on the October list.
The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. Markets added to the list in October include such geographically diverse locations as Santa Cruz, Calif.; Pocatello, Idaho; Abilene, Texas; and Savannah, Ga.
“While 11 new housing markets were designated as improving in October, 92 metros retained their spots on the IMI and just seven slipped from the list,” notes Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “This is an encouraging sign that Read the rest of this entry »
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Housing Outlook Continues to Brighten, Say Economists
Mirroring the uneven economic recovery, the housing market is expected to move in a slow, gradual upward path in 2012, while encountering its share of speed bumps along the road, according to economists participating in yesterday’s National Association of Home Builders (NAHB) construction forecast webinar on the housing and economic outlook.
While the latest monthly housing data have shown signs of a slight softening, NAHB Chief Economist David Crowe said this is more reflective of typical month-to-month volatility in the numbers and unusual seasonal factors than they are an indication of any significant downward trend in the broader housing market.
“The aggregate information suggests we’re just in a pause mode right now in terms of these measures,” said Crowe, who noted this could partly be the result of an early spring that brought much better weather than usual into the picture at the start of this year and pulled some housing activity forward.
Pointing out that less volatile quarterly data have continued to show modest improvement in key housing indicators such as builder sentiment, new-home sales and housing production, Crowe said the “housing outlook continues to slowly brighten.”
Crowe noted that numerous other fundamentals remain positive for housing at this time, including demographic factors (with pent-up household demand expected to ramp up and echo-boomers heading into their prime household formation ages), historically favorable mortgage rates that are not expected to move higher than 5 percent by the end of next year, more than 100 local markets currently listed on the NAHB/First American Improving Markets Index, and the fact that house price-to-income ratio has now returned to its historical average of about three-to-one versus the nearly five-to-one to which it had previously risen during the height of the housing boom.
However, he cautioned that housing still continues to face formidable challenges of its own such as rising foreclosures, persistently tight lending standards for homebuyers and builders and difficulties in obtaining accurate appraisals. Moreover, disappointing job growth numbers in March and uncertainty in the European economy are undermining prospects for a vigorous recovery.
“No one is anticipating that an upward path for housing will run in a straight-line trajectory,” said Crowe. “The economy is in an uneven recovery and Read the rest of this entry »
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