Housing Market Continues Modest Recovery
The National Association of Home Builders (NAHB) recently released its third quarter indexes and reports have been fairly positive across the board. One of the most important measurements those in the home building industry look at is the National Association of Home Builders/First American Lending Markets Index (LMI).
The LMI studies metro areas across the country. Its goal is to figure out which markets are currently approaching or exceeding previous levels of economic activity in the housing market. There are roughly 340 different metro areas that are measured. The average price, employment and permit request levels are scored over the past 12 months. That is then compared against annual average over previous periods of standard growth.
In the third quarter of 2016, 162 of the metro markets analyzed in the LMI exceeded or at least returned to their last normal levels of activity. Nationwide, this represented an improvement of 98 percent. 91 percent of the markets have been showing improvements year over year.
Some of the major metro markets that were top performers in the third quarter LMI report were Baton Rouge, Austin, San Jose, Provo, Nashville, Spokane, Los Angeles, Charleston, Houston and Honolulu. Naturally, at QuickDraw Fund Control, we were most excited to see these positive results in the western states like California, Washington and Utah, since so much of our fund control business comes from lenders in this region.
When it comes to the smaller metro areas, the best results were found in Odessa (TX), Walla Walla (WA), Ithica (NY), Midland (TX) and Manhattan (KS).
Though the housing market gains are modest overall, it is still encouraging to see positive and consistent growth throughout the LMI. “These are strong indicators that the housing recovery remains steadily on an upward trajectory,” says, Kurt Pfotenhauer, vice chairman of First American Title Insurance Company.
At QuickDraw Fund Control, we’re excited to keep seeing good reports from the NAHB and their various housing market indexes. Because we are so dialed into the construction industry, it’s important to understand what’s happening in housing markets nationwide. We look forward to seeing what the final quarter of 2016 brings as we transition into 2017.