Improving Markets Index Shows Volatility in June: NAHB

After reaching 100 in May, the list of metropolitan areas with improving housing markets fell to 80 in June, according to the ""National Association of Home Builders (NAHB)/First American Improving Market Index."":http://www.nahb.org/news_details.aspx?sectionID=2223&newsID=15362

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While the number of metros on the index dropped, a closer look shows high volatility, not a straightforward decline in improving markets. About half of last month's improving markets ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô 52 metros ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô maintained their improving status in June.

The other 48 metros listed as improving markets in May fell off the list, and 28 new markets made their way onto the index.

The Improving Markets Index measures three major indicators and considers a metro ""improving"" if it shows growth in all three

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areas for at least six months from their each category's respective trough.

The three indicators considered are housing permit growth measured by the ""U.S. Census Bureau,"":http://www.census.gov/ house price appreciation measured by ""Freddie Mac,"":http://www.freddiemac.com/ and employment growth measured by the ""Bureau of Labor Statistics."":http://www.bls.gov/

""The volatility of this index mirrors the uncertain economic conditions in some of our nation's individual markets,"" said Kurt Pfotenhauer, vice chairman of ""First American Title Insurance Company."":http://www.firstam.com/ ""The fact remains, however, that real estate fundamentals are still improving in many areas across the country.""

NAHB's chief economist, David Crowe, agrees that the fact that new markets are making their way onto the list is ""encouraging, and highlights the degree to which local and economic conditions are what drive individual housing markets.""

The 80 metros listed in this month's index are dispersed throughout 31 different states, including the District of Columbia.

""Though today's IMI reflects a decline in the number of improving markets from May, the list continues to show significant geographic diversity, with 31 states represented and roughly one quarter of all U.S. metros included,"" said ""NAHB"":http://www.nahb.com/ chairman and Florida homebuilder, Barry Rutenberg.

The state with the highest number of metros considered improving this month is Texas, with 10 metros on the index. The second-highest was Florida with seven metros on the index.