Two additional housing markets measured by the National Association of Homebuilders' Leading Markets Index reached or exceeded normal economic activity levels in February. Just 58 areas out of 350 national metropolitan areas now meet that standard. The national index increased by one percentage point from January to February; based on current permits, prices and employment data, the national market is running at 87 percent of normal economic and housing activity.

Markets in 58 metropolitan areas returned to or exceeded normal levels of economic and housing activity in February, according to the National Association of Home Builders/First American Leading Markets Index (LMI). This represents a net gain of two markets from January over about 350 metro areas in total, improving the index's nationwide score by a percentage point, to .87.

"Housing markets across the nation are continuing their slow and steady climb back to normal levels," said NAHB chairman Rick Judson. "As employment and consumer confidence slowly improves, this is spurring pent-up demand among potential buyers."

Baton Rouge, La., once again tops the list of major metros on the LMI, with a score of 1.41 – or 41 percent better than its last normal market level. Other major metros at the top of the list include Honolulu, Oklahoma City, Austin and Houston, Texas, as well as Harrisburg, Pa. and Pittsburgh – all of whose LMI scores indicate that their market activity now exceeds previous norms.

"Firming home prices are hastening the return of normal economic and housing activity in an increasing number of markets," said NAHB Chief Economist David Crowe. "The healthiest markets continue to be centered in smaller metros that boast???(R)???AE'?N????e'?N,A+strong local economies, particularly in the oil and gas producing states of Texas, North Dakota, Louisiana and Wyoming."

Looking at smaller metros, both Odessa and Midland, Texas, boast LMI scores of 2.0 or better, meaning that their markets are now at double their strength prior to the recession. Also at the top of the list of smaller metros are Bismarck, N.D.; Casper, Wyo.; and Grand Forks, N.D., respectively.

The LMI scores each metro area by taking the average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period; for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market and the national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.