More than 80 percent of metropolitan areas surveyed by the National Association of Homebuilders reached the group's index of improving housing markets in September. The increase marks the index's highest level since its inception two years ago, and the NAHB has announced that the metric will be discontinued and replaced by a new report next month.

A total of 291 metropolitan areas nationwide now qualify as improving housing markets, according to September's National Association of Home Builders/First American Improving Markets Index (IMI), reflecting a gain of 44 markets from August.

"The dramatic increase in markets qualifying for the IMI in September was partly due to a recent improvement in the way that Freddie Mac measures home prices," said NAHB chief economist David Crowe. NAHB announced plans to phase out the IMI in October, replacing it with a new index to be released on the same schedule.

The IMI identifies improving metropolitan areas by analyzing employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. A metro area must see improvement in all three measures for at least six consecutive months following those measures' respective troughs before reaching the improving markets list.

"Just over 80 percent of the 361 metros tracked by our index are showing consistent growth in three key measures of housing market strength – prices, permits, and employment," said NAHB chairman Rick Judson. "While there is still plenty of room for growth, this is an excellent indication of how the housing recovery has begun to take hold across more geographic areas."

In September, 242 housing markets retained their existing positions on the IMI while 49 new markets were added. Five were dropped from the list. Recent additions include Macon, Ga.; St. Cloud, Minn.; Brownsville, Texas; Spokane, Wash. (pictured); and Milwaukee, Wis.

A complete list of all IMI metros and breakouts of newly added or dropped areas is available at nahb.org/imi.