The number of improving housing markets remained relatively unchanged in May as national housing market and economic indicators continued to build momentum.
Real estate data from the National Association of Home Builders shows that a net of one metropolitan statistical area dropped off the list from the previous month, rounding the total out at 100. Meanwhile, the number of states represented on the list remained firm at 35, including Washington, D.C.
What makes an improving market?
The report recognized three key reports from different government agencies and companies to determine the improving metro areas. These include employment growth from the Bureau of Labor Statistics, home price gains from Freddie Mac and single-family housing permits from the Census Bureau. Once a city shows gains in all three areas for six consecutive months, they are considered an improving housing market.
"The fact that there are 100 markets in 34 states and the District of Columbia represented on the improving list illustrates that all housing markets are local, and that the national headlines often don't apply to what's happening in a specific metropolitan area," said NAHB chairman Barry Rutenberg.
Notable change yields little results
Specifically, the report noted that there was considerable change to the list, even though the outcome would indicate that activity was stable. Between April and May, 18 cities were dropped from the list, which were replaced by 17 new metro areas, netting the overall one city loss.
Geographical diversity was a key highlight to this month's report. Notable cities added to the list include markets in desert states, such as Phoenix, Northwestern cities in Oregon, and the fields of Bowling Green, Kentucky.
Lack of credit holding some market back
Markets that were added, and remained, on the list from the previous month were recognized for having stable job markets, as well as high demand for new and existing homes. However, Rutenberg noted that a lack of available credit for both builders and buyers is a major obstacle in allowing the list of improving housing markets to further grow.
"The fact that the number of improving metros continued to hold its own with 100 entries in May shows that there are many places across the country where confidence and consumers are returning to the housing market," said First American Title Insurance vice president Kurt Pfotenhauer regarding the findings.
Meanwhile, as the housing market enters its peak season for activity, a number of experts anticipate a surge in home buying activity to further bolster the improving housing markets list in the future.