Skepticism Continues Amid Reports of Improving Markets
The index is comprised of 361 metro areas ranked on improvement in housing permits, employment and house prices. In order to make the list, markets need to improve on all three markets for six consecutive months in a row.
“While there is still plenty of room for growth, this is an excellent indication of how the housing recovery has begun to take hold across more geographical areas,” said Rick Judson, chairman of the NAHB.
While many reports point to a continuing market recovery, others point to fears of another housing bubble. There has been a significant slowdown in home price gains, which some say point to an emerging housing bubble. Investor activity has fallen off nearly one-fifth over the last four months, according to Capital Economic’s latest edition of US Housing Market Analyst.
Investor sales have dropped from 23% to 18% as inventory of heavily discounted distressed homes continue to decline. Reports of skepticism have been matched with news of sellers reentering the market, which continues to contribute to improving markets throughout the country.
Even as prices continue to rise, metrics from the National Association of Realtor’s Affordability Index show housing still remains on the cheap side where the median household has 178% of the income required to buy a median-priced home.
Another housing public or true market recovery?