Housing Markets, Prices Show Continued Growth

The NAHB's index of improving housing markets grew to 242 in January, and includes entrants from 48 states and the District of Columbia, including Nashville, Tenn. (pictured). This is up from 201 improving markets in December, and corresponds with separate index that also shows increasing home prices.

The housing market is ringing in the New Year in proper fashion, as key metrics continue to indicate sustained growth. The Improving Markets Index (IMI) from the National Association of Home Builders rose for a fifth consecutive month to 242 in January, and CoreLogic's index of home prices returned positive results for the ninth straight month.

A total of 47 new metros were added to the list in January, while only six were dropped. Newly added metros include Los Angeles, Calif.; Auburn, Ala.; Des Moines, Iowa; Nashville, Tenn.; Richmond, Va.; and Cleveland, Ohio.

"The IMI has almost doubled in the past two months as stronger demand during prime home buying season boosted prices across a broader number of metropolitan areas," said David Crowe, the NAHB's chief economist. "Similar home price gains, and hence the IMI, may be tempered in the future as we see data from typically slower months for home sales."

The IMI identifies metro areas that have shown improvement from their respective troughs in housing permits, employment, and home prices for at least six consecutive months. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, housing price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau.

Supporting the improving HMI report is the CoreLogic Home Price Index (HPI), released January 15, which indicates home prices increased on a year-over-year basis for the ninth consecutive month in December. The November HPI was up 7.4 percent from its November 2011 level, representing the largest growth in nearly seven years. On a month-over-month basis, the HPI, which includes sales of distressed properties, was up 0.3 percent. CoreLogic said all but six states are experiencing year-over-year price gains.

CoreLogic's pending HPI indicates that December 2012 home prices, including distressed sales, can be expected to rise by 7.9 percent on a year-over-year basis from December 2011, despite a month-over-month fall of 0.5 percent from November 2012 reflecting a seasonal winter slowdown.

A complete list of all 242 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in January, is available at www.nahb.org/imi.