Fifty-six out of approximately 350 metro areas nationwide returned to or exceeded their last ‘normal’ levels of economic and housing activity in December, according to the National Association of Home Builders (NAHB)/First American Leading Markets Index (LMI).
Interestingly, 48 of these metro markets are communities with populations fewer than 500,000, indicating that the recovery is currently stronger in smaller communities compared to big cities.
‘More markets are slowly returning to normal levels, and we expect this upward trend to continue as an improving economy and pent-up demand brings more home buyers back into the marketplace,’ says Rick Judson, a home builder from Charlotte, N.C., and chairman of the NAHB, in a release. ‘Policymakers must be careful to avoid actions that would harm consumer confidence and impede the ongoing recovery.’
Based on current permits, prices and employment data, the nationwide average is running at 86% of ‘normal’ (i.e., pre-crisis) economic and housing activity.
Some smaller communities are faring better due to strengthening of the energy industry, which, in turn, is producing solid job and economic growth, the report finds.
‘More than 35 percent of all the markets on this month's LMI are operating at a capacity of 90 percent or better of previous norms, which is a good sign that the housing recovery will continue to pick up steam in 2014,’ says Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report.
Metropolitan areas where market activity now exceeds previous norms include Baton Rouge, La.; Honolulu; Oklahoma City; Austin, Texas; Houston; Harrisburg, Pa.; Pittsburgh; Odessa, Texas; Midland, Texas; Casper, Wyo.; Bismarck, N.D.; and Grand Forks, N.D., according to the report.