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September 13, 2011

NAHB Hits a HomeRun With A New Comprehensive Index

Welcome Back,

   As you all know, from time to time, I break down the Housing numbers that are released to help you check the pulse of the Real Estate Market on a National basis. Along with these updates, I add an occasional rant (such as a rant about the need for an Index measuring Rent to Own activity). So far, though, that one has fallen on deaf ears, but something else has been created that I think is fantastic.

   Let me give you an example; if you take a photo of someone standing by the side of a building, you really can only see the person. If you back up a few steps and take the photo, you can see the building. If you step back a little more, you can also see the background, and perhaps the sky/clouds/weather. This example leads us to the newly created NAHB/First American Improving Markets Index (IMI), which was just launched by the NAHB (National Association of Home Builders), and includes three important factors to paint the big picture of the Housing market.

   According to an article by Claire Easley from Builder Magazine ("NAHB Launches New Index to Track Improving Markets"), the new index will be released monthly and will be "dedicated entirely to tracking metropolitan areas that have consistently shown signs of improvement".

   How can a Metropolitan area make the list? The area must have shown "at least six months of improvement from its trough" in the three factors that make up the index; housing permits, employment, and home prices. The Big Picture, basically!

   All 3 factors were deemed by the NAHB to be "key to determining the pulse of the housing market", will be drawn data from the "Bureau of Labor Statistics for employment growth numbers, house price appreciation data from Freddie Mac, and single-family permit numbers from the U.S. Census Bureau".

   In the article, the NAHB Chairman, Bob Nielsen, was quoted as saying that "Housing conditions are local and do not always reflect the national picture", and that they created the new index to "shine a light on those housing markets across the country that have stabilized and have begun to show signs of recovery."

   Who made the first release of the Index? The 12 Metro area that made it were: Alexandria, La.; Anchorage, Alaska.; Bangor, Maine; Bismarck, N.D.; Casper, Wyo.; Fairbanks, Alaska.; Fayetteville, N.C.; Houma, La.; Midland, Texas; New Orleans; Pittsburgh; and Waco, Texas".

   As an interesting side note, in the same article, the Chief Economist for NAHB (David Crowe), said that last year at this time "there was not a single market that showed improvement using these criteria." What are your thoughts on this composite index? Do you think they hit the target, or there should be more than these three factors?

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Have a Great Week, and Happy Rent-to-Owning !
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com
TAGS: #NAHB #ImprovingMarketsIndex #IMI #RealEstateMarket #housingpermits #employment #homeprices

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