According to the National Association of Home Builders/First American’s Leading Markets Index (LMI) released this morning, housing markets throughout the country are back to an average of “normal economic and housing activity”.
Although the index’s individual sections, including price, permit, and employment data, have grown at different rates, they have all reached new levels of economic recovery. More specifically, employment has climbed to 98 percent of normal activity, while home price levels have reached 150 percent (significantly higher than normal) and single-family permits have risen to 53 percent.
Single-family permits have been slow to grow due to a low homebuilder supply this year. Instead of booming like the other components of the index, they’ve “inched up slowly as builders continue to face supply-side headwinds such as ongoing price hikes in building materials, a lack of buildable lots and labor shortages,” reported Robert Dietz, Chief Economist of NAHB.
Even with the slow growing permits component, this month’s LMI proves that the nation’s overall housing market is expanding. In fact, 183 of the roughly 340 metro areas have restored or exceeded their last normal levels of economic and housing activity. According to the NAHB, that is an annual net gain of 67 markets.
Baton Rouge, LA, has remained high on the LMI’s list, with a 76 percent increase above its normal market level. Behind Baton Rouge, Austin Texas; Honolulu, HI; Provo, Utah; and San Jose, CA top off the list.
“This is the first time the LMI has reached this key milestone and it shows how much our industry has improved since the depth of the Great Recession,” stated Granger MacDonald, NAHB chairman.
With housing markets hitting new milestones throughout the country, it’s a great time to discuss your housing options with a local lender. For more information about this month’s leading markets index, or to learn more about home financing, contact one of our mortgage specialists today.