Smaller Housing Markets Nearing ‘Normal’ Faster
The nationwide housing market is inching closer to “normal” levels and is operating at 85 percent of normal economic and housing activity, according to the the National Association of Home Builders/First American Leading Markets Index.
Nearly 16 percent – or 55 out of 350 metro areas – already have returned to or exceeded their last normal levels of housing and economic activity, according to the November index reading.
The LMI evaluates 350 metro areas to gauge how close the markets are to approaching or exceeding their previous normal levels of economic and housing activity. The index factors in average permits, home prices, and employment levels for the past 12 months.
“This index shows that most housing markets across the nation are continuing a slow, gradual climb back to normal levels,” says NAHB Chairman Rick Judson.
Smaller metros accounted for the majority of markets that are at or above normal levels, says David Crowe, NAHB’s chief economist.