Leading Markets Index Shows Housing Market Improvement

The National Association of Home Builders released their Leading Markets Index (LMI) yesterday, revealing that “recovery continues to spread” as 59 metro markets nationwide returned to (or exceeded) their normal levels of housing activity. CF Funding is happy to share that the nationwide average is at 88 percent of normal economic and housing activity, based on current permit, price, and employment data. As CF Funding mentioned yesterday in the lender’s daily news feed, consumer attitudes are increasing per the Fannie Mae National Housing Survey, and 68 percent of respondents said it is a good time to buy a home. The LMI confirms these consumer attitudes to be true, as the market continues to recover.

According to the NAHB, 28 percent of metro areas (out of 350 nationwide) saw their score rise this month and 83 percent of them have shown improvement over the past year. Chief Economist David Crowe shared an optimistic perspective, “It’s a promising sign to see areas like Los Angeles and San Jose joining the top ten largest MSAs showing a recovery. We still expect 2014 to be a strong year for housing and to aid in the overall recovery. The job market continues to mend and with that we will see a steady release of pent up demand of buyers.”

One continuously promising metro is Baton Rouge, LA, which scored 1.42 (42 percent better than its normal market levels). Honolulu, Oklahoma City, and Austin also topped the list. As the weather improves this Spring, CF Funding expects to see more metro areas reaching and exceeding their normal economic levels.

In other housing news, The Bureau of Labor Statistics has shared employment data revealing an increase in construction employment. The most recent report showed a 2.6 percent increase nationwide for February on a year-over-year basis. 73 percent of states had year-over-year increases as of February. Corelogic stated recently on their blog, “94 percent of states had increases in construction employment [during the housing boom], but that share fell to zero in the depths of the housing and financial crisis in 2009… while these year-over-year increases look tepid, they are strong when compared to the period of double-digit increases in construction employment from January 2009 to March 2010.” The state of Florida showed the largest year-over-year increase this February, improving by 11 percent. West Virginia showed the least improvement, with a 6.5 percent decrease in construction employment.

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