Improving Housing Markets Nearly Double, New Data Says

housing market
housing market

Data released today indicates that the number of improving housing markets nearly doubled in January, providing the latest evidence of a real estate turnaround.

Seventy-six markets are now on the upswing, according to the Improving Markets Index, a monthly release prepared by the National Association of Home Builders (NAHB) and the First American Financial Corporation. That represents an increase of 35 markets from the December release, which listed 41 markets as improving. The index classifies a market as improving if it posts an increase in jobs, home prices and single-family housing permits for at least six months.

"The substantial gain in the number of improving housing markets in January shows that more consumers are looking favorably at a home purchase in light of today's historically low interest rates and attractive prices," said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company. The average rate of a 30-year-fixed mortgage dropped to match the lowest on record last week, with Freddie Mac putting the number at 3.91 percent.

Most of the cities that joined the list are relatively small metropolitan areas, NAHB chief economist David Crowe notes. But a few major cities, including Dallas, Denver and Philadelphia, also made the cut.

Beyond just the general increase in the number of improving markets, the data is also encouraging because of the wide geographical distribution of the recuperating cities, NAHB Chairman Bob Nielsen said. The generous spread of improving cities suggests that a possible recovery is not concentrated only in certain pockets of the country.

The newly released data is the latest harbinger of good news for the housing market in 2012. Pending home sales hit a year and a half high in November, while total home sales rose 4.0 percent the same month, according to the National Association of Realtors. Residential construction ticked up 2 percent in November, The Commerce Department said earlier this month.

Despite the positive signs, the foreclosure crisis could continue to be a "lingering problem in 2012, NAHB senior economist Robert Denk told AOL Real Estate.

"Things are not great, but they are coming down," he said. "There's no imminent threat that things are going to get worse on that front."

While mortgage delinquencies have dropped 25 percent since January of 2010, 2 million Americans still face foreclosure, according to Lender Processing Services.

The National Association of Home Builders, which prepares the index with The First American Financial Corporation, is a trade group that represents more than 160,000 members involved in home building. The First American Financial Corporation provides title insurance and settlements services to the real estate and mortgage industries.

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