Indexing the Improvement

You think all housing markets are in the tank? Think again.

The number of housing markets showing measurable improvement nearly doubled in January with the addition of 40 new metro areas to the National Association of Home Builders/First American Improving Markets Index.

The index identifies metropolitan areas that have shown improvement from their respective low points in housing permits, employment and house prices for at least six consecutive months.

The IMI now boasts 76 improving markets, up from 41 in December, with 31 states and the District of Columbia represented by at least one entry.

The five metro areas that dropped from the NAHB/First American Improving Markets Index in January were Anchorage, Alaska; Fort Wayne, Ind.; Canton, Ohio; Scranton, Pa.; and Charleston, W. Va. A full list of all 76 metropolitan areas currently on the IMI is available at: www.nahb.org/imi.

The additions to the IMI followed news from the National Association of Realtors at the end of December that showed pending home sales had reached their highest level in 19 months.

The NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 7.3 percent to 100.1 in November (the most recent month for which data is available) from an upwardly revised 93.3 in October and is 5.9 percent above November 2010 when it stood at 94.5. The October upward revision resulted in a 10.4 percent monthly gain. The last time the index was higher was in April 2010 when it reached 111.5 as buyers rushed to beat the deadline for the federal housing tax credit. The index, which measures housing contract activity, is based on signed real estate contracts for existing single-family homes, condos and co-ops. A signed contract is not counted as a sale until the transaction closes. The data reflects contracts but not closings.