The number of housing markets in the U.S. showing sustained improvement in three key measures dropped down slightly to an index score of 258 in May from 273 in April, according to the National Association of Home Builders/First American Improving Markets Index.
The index includes entrants from all 50 states and the District of Columbia and identifies metropolitan areas that have improved from their respective troughs in housing permits, employment and home prices for at least six months in a row.
In May, four new markets were added to the list and 19 fell from it. Those added were Dothan, Ala.; Elizabeth, Ky.; Salisbury, Md.; and Salem, Ore.
"The fact that over 70% of all U.S. metros are holding onto their spots on the improving list is definitely good news, and representative of the generally brightening outlook for housing markets nationwide," said NAHB Chairman Rick Judson, who added that the industry’s progress on the road to recovery is being slowed by rising challenges related to the availability of credit, building materials, labor and lots for development.
"While seasonal trends in home prices resulted in an overall decline in the IMI this month, the index remains at a very strong level and continues to represent markets in every state," noted NAHB Chief Economist David Crowe.
Crowe added that some metropolitan areas that had previously charted marginal home-price gains dropped off the list this time as a result of typically softer prices seen in the winter months, which is similar to what the index showed in this same period last year.
"Today's report shows that the majority of U.S. metros are experiencing strengthening house prices, employment and permitting activity, which is a much more positive picture than the one we were seeing a year ago," observed Kurt Pfotenhauer, vice chairman of First American Title Insurance Company. "That's the big picture on which consumers need to focus."
A complete list of all 258 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in May, can be found here.