The number of U.S. housing markets improving rose by five to a total of 263 in June, according to the National Association of Home Builders/First American Improving Markets Index (IMI). The list includes entrants from the District of Columbia and every state but Connecticut.

"This is the fifth consecutive month in which the IMI has designated more than 70 percent of U.S. metros as improving," said NAHB Chairman Rick Judson. "While that's a good sign that the housing recovery is on solid footing, we know that various challenges are slowing its progress - including continuing issues with credit availability for builders and buyers, as well as appraisals that aren't keeping up with the rising cost of construction."

The IMI identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. The three indicators analyzed are 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. The index shed 15 markets in February, but the overall growth trend has continued since the end of 2012.

"As market conditions improve across most of the country, some metros have moved onto the IMI list, while marginal seasonal fluctuations have nudged others off of it," said NAHB Chief Economist David Crowe. "This is to be expected as the recovery expands. Meanwhile, it's worth noting that the number of improving markets is now more than three times what it was in June 2012."

A complete list of all 263 metros currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in June, is available at nahb.org/imi.