As the U.S. housing market improves, it’s taking the broader U.S. economy with it.
According to National Association of Homebuilders (NAHB), 255 U.S. metropolitan areas are “improving” — more than triple the tally from 12 months ago — as rising home prices, strong job growth, and new home construction propel the economy forward.
Mortgage rates and home prices are rising. The trend may continue into 2014.
Improving Market Index : “Measurable And Sustained Growth”
Each month, the National Association of Homebuilders publishes its Improving Market Index (IMI), a report which attempts to identify U.S. metropolitan areas in which economic growth is ongoing.
By contrast, the Improving Market Index focus on home prices solely. Using three distinct data series, the IMI gauges whether the economy of a given metropolitan area is expanding or contracting. If all three data points show measurable and sustained growth, the area is labeled “improving”.
The three series used by the Improving Market Index are :
- Employment Statistics from the Bureau of Labor Statistics
- Home Price Growth from Freddie Mac
- Single-Family Housing Growth from the U.S. Census Bureau
To “make” the NAHB Improving Market Index list, a given metropolitan area must show growth in each series on a month-to-month basis, and at least six months must have passed since each of the three series’ most recent “bottom”.