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Housing Index Loses 15 Markets in May

Four new markets were added to the list and 19 were dropped from it this month. Newcomers included the geographically diverse metros of Dothan, Ala.; Elizabethtown, Ky.; Salisbury, Md.; and Salem, Ore.

The index that tracks sustained improvement in metropolitan housing markets shed 15 of those markets in May, falling to 258 from 273 in May, according to the NAHB/First American Improving Markets Index (IMI) report released earlier this month.

"Some metropolitan areas that had previously charted marginal home-price gains dropped off the list this time as a result of typically softer prices seen in the winter months, which is similar to what the index showed in this same period last year," said NAHB chief economist David Crowe. "While seasonal trends in home prices resulted in an overall decline in the IMI this month, the index remains at a very strong level and continues to represent markets in every state."

The index increased for seven consecutive months before leveling off in April. While the housing market recovery has continued mostly unabated this year, recent indicators - including a drop in single-family home construction last month, and declining home ownership despite surging prices - may forecast a slowdown heading into the summer months, similar to last year.

"Our industry's progress on the road to recovery is being slowed by rising challenges related to the availability of credit, building materials, labor and lots for development," said NAHB chair Rick Judson. "That said ... the fact that over 70 percent of all U.S. metros are holding onto their spots on the improving list is definitely good news, and representative of the generally brightening outlook for housing markets nationwide."

The IMI identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. The three indicators analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau.

A complete list of all 258 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in May, is available at

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November 22, 2019, 1:14 pm PDT

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