The amount of improving metro area housing markets nearly doubled in January to 76 cities, according to an index monitored by First American Financial Corp. (FAF) and the National Association of Homebuilders.

The index tracks growth in employment, home prices and single-family building permits. The list of 76 markets showing signs of improvement grew from 41 last month. In January, five metros fell off the list, while 40, including Philadelphia, Dallas, Indianapolis and Denver, were added.

In the U.S., 31 states have at least one city on the list.

“The fact that the list of improving housing markets nearly doubled this month shows that a significant, positive trend is developing, and is even more relevant when you consider the expanding geographic distribution of the list,” said NAHB Chairman Bob Nielsen.

The trade group’s Chief Economist David Crowe said smaller markets continue to dominate the list, but the major metros added in January is a good sign.

“This is an encouraging sign that gradually strengthening economic conditions are starting to take hold across a broader swath of America,” Crowe said.

Nationwide, unemployment dropped to 8.5% in December. And while national home prices dipped another 4.3% in November, according to data analytics firm CoreLogic (CLGX), it’s widely believed a bottom should be reached this year.

A still growing inventory of distressed homes and tightened lending requirements are still holding back more accelerated growth, but Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., said the mood is finally looking up for housing.

“The substantial gain in the number of improving housing markets in January shows that more consumers are looking favorably at a home purchase in light of today’s historically low interest rates and attractive prices, particularly in areas where job growth has picked up,” Pfotenhauer said.

Write to Jon Prior.

Follow him on Twitter @JonAPrior.