WASHINGTON, DC-The National Association of Home Builders/ First American Improving Markets Index (IMI) made its largest month-over-month improvement since the index value turned positive in December 2010. It found that 23 individual housing markets now qualify as "improving", which nearly double the 12 housing markets that made the list last month. The index measures improvement for at least six months in housing permits, employment and housing prices.

"Both the number and geographic diversity of improving housing markets expanded this month, with Iowa, Illinois and South Carolina all newly represented by one entry or more on the list," says National Association of Home Builders Chairman Bob Nielsen, in a statement.

"This is further evidence that, despite the tough conditions that persist in many cities, pockets of improvement are emerging in local housing markets across the country."

Cities in this months index include Pittsburgh and New Orleans, which have been the two largest improving markets, NAHB Chief Economist David Crowe, says. Other markets on the list tend to be smaller cities in which energy and agriculture are the primary economic drivers and where the effects of the recession have been less pronounced, he said - with Texas in particular standing out for its seven entries. 

The index can also serve as a defacto leading indicator for commercial real estate development. “Improvement in residential construction is usually a harbinger of improvement in the commercial space, Crowe tells GlobeSt.com. “Once the homes are built, then new retail and other commercial development becomes necessary to serve those homes.”

What is not likely to happen, though, he says is a return of the RMBS market. Such issuances have been scarce to non-existent since the crash. Crowe doesn’t anticipate their return any time soon due to the uncertainty around Fannie Mae and Freddie Mac. “Investors wont be comfortable competing against them until they know what they will look like.”

The following metros were listed in the October index:

  • Alexandria, LA
  • Amarillo, TX
  •  Anchorage, AK
  • Bismarck, ND
  • Casper, WY
  • Fairbanks, AK
  • Fayetteville, NC
  • Houma, LA
  • Iowa City, IA
  • Jonesboro, AR
  • Kankakee, IL
  • McAllen, TX
  • Midland, TX
  • New Orleans, LA
  • Odessa, TX
  • Pine Bluff, AR
  • Pittsburgh, PA
  • Sherman, TX
  • Sumter, SC
  • Waco, TX
  • Waterloo, IA
  • Wichita Falls, TX
  • Winston-Salem, NC
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