The National Association of Home Builders' Leading Markets Index (LMI) gained another point in April, improving to a .88 score, according to a recent report from the trade group. The index improved on a .87 result in March, and rose from a .82 reading in April 2013.

The LMI score, published by the NAHB/First American Title Insurance on May 6, indicates that the U.S. has reached about 88 percent of what is considered its normal level of economic and housing activity. Forty-nine of the 351 metro markets tracked by the index have reached or exceeded their last normal levels of economic and housing activity, and 300 of the metro areas have improved their index numbers year-over-year.

"We have always said this recovery would be a slow but steady one, and I think the index continues to prove this," said NAHB chief economist David Crowe. "The year started a bit slower than anyone could have anticipated, but we still expect housing to play a greater role in aiding the overall economic recovery this year. The job market continues to mend, and that should spur a steady release of pent up demand among home buyers."

Areas benefiting from growth in energy production continue to lead the index, and Baton Rouge, La., remained the top performer among major metros with a LMI of 1.41 – 41 percent better than its last normal market level. The most improved small cities continue to include Odessa and Midland, Texas, with scores of 2.0 or better, double their strength prior to the recession.

Other major metros with scores above 1.00 include Honolulu, Oklahoma City, Austin and Houston, Los Angeles, San Jose, Calif., and Harrisburg. Top small metros include Bismarck, North Dakota, Casper, Wyoming, and Grand Forks, North Dakota, all of which were impacted the energy boom.

"Our builder members tell us they are starting to see more optimism in the field," said NAHB chairman Kevin Kelly. "Mortgage rates are low, home prices are affordable and with the harsh winter behind us, our latest surveys show builders are feeling more bullish about future sales conditions."

The LMI identifies market strength relative to normal, pre-recession activity levels. NAHB takes each area's average employment, housing permits, and home price levels for the past 12 months and divides each by its annual average during the last period of normal growth. For single-family permits and home prices, 2000-2003 is the control period used, and for employment, the year 2007 is used as the baseline. The three components are then averaged to provide an overall score for each market. National data on the three index components are measured in the same fashion.