The list of improving U.S. housing markets expanded for a seventh consecutive month in March to include Birmingham, Ala. as one of the 274 metros on the National Association of Home Builders/First American Improving Markets Index (IMI), released today. This total amounts to a net gain of 15 markets since February and includes entrants from all 50 states and the District of Columbia.
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. Thirty-four new markets were added to the list and 19 were dropped from it this month. In addition to the Birmingham market, other notable additions include such diverse locations as Santa Barbara, Calif.; Colorado Springs, Colo.; and Bloomington, Ind.
The Greater Birmingham Association of Home Builders (GBAHB) Executive Vice President Matt Morrow said today's news only confirms what local builders and other real estate professionals have seen firsthand.
"The Birmingham housing market has experienced a steady increase in the number of new homes under construction with decreasing inventory of finished unoccupied homes," said Morrow. "These numbers prove that we have reached a steady recovery."
"This is the second consecutive month in which every state is represented by at least one metro on the improving list," observed NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. "The expanding housing recovery is energizing communities nationwide by generating jobs and local tax revenues -- and it could be an even more potent force for economic growth if credit for building and buying homes was more readily available."
This news is consistent with recent reports from the Alabama Center for Real Estate (ACRE): "February residential sales in the Birmingham Metro Area* market were 2.8 percent above the same period from the prior year. There were 776 residential closings in February, 21 more units than last February. Year-to-date through February, closed transactions are up a healthy 8.4 percent." ACREalso reported: "In January, sixty percent of Alabama metro areas experienced an increase in new home sales compared to 2012 with Birmingham up by 14.3 percent."
"With just over 75 percent of the 361 metros covered by the IMI now seen as improving, the housing market is on considerably more solid footing than it was at this time last year," said NAHB Chief Economist David Crowe. "While we expect this positive momentum to continue, it's important to understand that many markets are just beginning the recovery process, and that numerous issues - from credit availability to the rising cost of building materials and emerging lot shortages - are slowing the pace of that advancement."
"Today's IMI results show that conditions have brightened considerably across much of the country, and bode very well for the spring home buying season," added Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are 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. NAHB uses the latest available data from these sources to generate a list of improving markets. 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 274 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in March, is available at www.nahb.org/imi.