The Improving Markets Index from the NAHB, which started out 16 months ago with just 12 cities, now features 242, with Chicago being one of the newest additions.

The National Association of Home Builders’ (NAHB) Improving Markets Index, a key measure of the housing markets in the U.S.’ largest metropolitan areas, rose for the fifth consecutive month in January, increasing to a total of 242 cities – one of which is now Chicago.

That’s up from 201 markets in December, and according to the NAHB, it now includes 48 states and the District of Columbia.

Chicago Added to Improving Markets Index

The Improving Markets Index was first introduced in September 2011, and as the NAHB explained at the time, it was crafted for one central purpose – to highlight the housing markets in the U.S. that were in recovery. And since then, the Improving Market Index’s growth has been nothing short of exponential, sprouting from the initial 12 metropolitan areas in September 2011 to the current 242.

And Chicago, as it turns out, was one of the newest cities featured in the Improving Markets Index, joining other such new recruits as Los Angeles, Calif.; Auburn, Ala.; Des Moines, Iowa; Nashville, Tenn.; Richmond, Va.; and Cleveland, Ohio.

In addition to Chicago, other Illinois cities on the list include: Bloomington; Champaign; Peoria; and Springfield.

Barry Rutenberg, the NAHB’s chairman, said the Improving Markets Index is no longer a fringe measure of the housing market, and has instead become the norm.

“We created the improving markets list in September of 2011 to spotlight individual metros where – contrary to the national headlines – housing markets were on the mend,” Rutenberg said. “Today, 242 out of 361 metros nationwide appear on that list, including representatives from almost every state in the country. The story is no longer about exceptions to the rule, but about the growing breadth of the housing recovery even as overly strict mortgage requirements hold back the pace of improvement.”

The NAHB analyzes a number of factors when adding cities to the Improving Markets Index, including housing permits, employment and home prices, all of which need to have shown improvement for at least six consecutive months.

David Crowe – “IMI has almost doubled”

David Crowe, the NAHB’s chief economist, said that the progress of the Improving Markets Index has been particularly impressive the last two months, as the housing recovery has picked up more and more steam.

“The IMI has almost doubled in the past two months, as stronger demand during prime homebuying season boosted prices across a broader number of metropolitan areas,” Crowe said. “Similar home price gains, and hence the IMI, may be tempered in the future as we see data from typically slower months for home sales.”

Finally, here is a great map from the NAHB showing all the Improving Market Index’s cities: