By Vicki Needham - 11/06/14 01:15 PM EST
The housing market is inching back toward its full potential, a new survey showed on Thursday.
A new housing index shows that the market ran at 90 percent of it normal economic and housing activity in the third quarter, up from 89 percent in the April-June period, according to the National Association of Home Builders/First American Leading Markets Index (LMI).
"Continued job creation, economic growth and increasing consumer confidence should help spur pent-up demand for housing."
The index's score is based on current permit, price and employment data.
Housing markets in 59 of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of activity in the third quarter, a year-over-year net gain of seven markets.
Meanwhile, 66 percent of markets have shown an improvement year-over-year.
Baton Rouge, La., continues to top the list of major metros, with a score of 1.39, or 39 percent better than its last normal market level.
Other major metros leading the list include Austin, Texas; Honolulu; Oklahoma City, Okla., and Houston.
Rounding out the top 10 are Los Angeles; San Jose, Calif.; Salt Lake City; New Orleans and Charleston, S.C. — all with scores indicating that their market activity now equals or exceeds previous norms.
"An uptick in the number of single-family permits, which is currently only 44 percent of normal activity, is the key to a full-fledged housing recovery," said David Crowe, NAHB’s chief economist.
“In the 17 metros where permits are at or above normal, the overall index shows that these markets have fully recovered."
Looking at smaller metros, both Midland and Odessa, Texas, boast index scores of 2.0 or better, meaning their markets are now at double their strength prior to the recession.
Also leading the list of smaller metros are Grand Forks, N.D; Bismarck, N.D.; and Casper, Wyo., respectively.