A recent report released by the National Association of Home Builders (NAHB) revealed that the number of improving property markets in the U.S. has dropped to 258 from the 273 recorded in April.
NAHB' releases a monthly report of the number and rate of improving property markets in the country. It analyzes metropolitan cities from all the 50 states of America and the District of Columbia through "The First American Improving Markets Index (IMI)". The IMI tracks various metro areas of the country on the basis of construction employment, housing permits and home prices for the previous six months in the region.
For the month of May, four cities made their debut in the list while 19 existing cities were dropped from the same. The four new entrants included, Elizabethtown, Kentucky; Dothan, Alaska; Salisbury, Maryland and Salem, Oregon. Of the 19 cities dropped from the list three were from Georgia and Wisconsin each, two form Illinois and Pennsylvania and the rest from states like New Mexico, Texas, Los Angeles, Iowa, Idaho, Kentucky, North Carolina and Tennessee.
Check out the detailed list of improving cities for the month of May, here.
The slight dip in the number of improving markets was attributed to seasonal trends in home prices. However, experts believe that even though the list has lost a few cities, the property market is holding steady.
"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. 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," David Crowe, chief economist at NAHB said in a statement.
A survey conducted by Core Logic, a real estate intelligence firm, revealed that home prices rose by 10.5 percent in 2013 compared to a year earlier. According to the study, prices hiked in 46 states over the past 13 months, out of which 11 states posted double digit gains.
Prices hiked because more numbers of buyers are bidding for the limited homes available for sale. Supply has remained tights over the past few months as well. Credit availability is low and construction material prices remain high, which is leading to the price inflation.
"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. That said, 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," Rick Judson, chairman of NAHB said in the statement.
