The NAHB's index of improving housing markets shed eight metro areas in August, the index's second consecutive month of decline, according to an August 6 report. The index has declined by 27 markets following a high-water mark in March, but the year-over-year trend remains unambiguously positive, with 247 improving markets in August 2013 compared to just 80 in August 2012.

A total of 247 metropolitan areas qualified for the National Association of Home Builders/First American Improving Markets Index (IMI) in August. Three new markets were added to the list and 11 were dropped, across 49 states and the District of Columbia; newly added metros include Kankakee, Ill., along with Atlantic City and Ocean City, N.J.

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. While the total is eight metros shy of the number listed on the IMI in July, it is roughly three times the number of metros that qualified for the list in August 2012.

"While the number of improving housing markets this August remains well ahead of the same month last year, the index is affected by seasonal softening in home prices just as we saw happen in 2012. The metros that fell off the list this month originally qualified with very small home price improvements that have since slipped back," said NAHB chief economist David Crowe. "As house prices return to more normal levels in fully recovered markets, further IMI advancements will be even more modest."

The IMI measures three sets of independent monthly data to get a mark on the top metropolitan statistical areas: 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 being included on the improving markets list.

A complete list of all 247 metros currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in August, is available at nahb.org/imi.