The number of housing markets across the country evidencing signs of substantial improvement grew for the fourth month in a row in December, according to the National Association of Home Builders/First American Improving Markets Index (IMI). The list added 20 new markets for the month and dropped nine, bringing the total to 41.

The IMI follows employment growth, home price appreciation, and housing permits across MSAs; a metro area is designated as "improving" once it has produced gains in all three areas for at least six consecutive months.

December’s additions are notable for the breadth they add to the index, which has been heavily weighted toward small towns boasting economies with strong ties to the energy sector since the IMI’s inception four months ago. While the list continues to be dominated by smaller markets, this month saw an influx of larger metros with more diverse economic bases, such as Washington, D.C., San Jose, Calif., and Toledo, Ohio. However, Texas continues to be represented more than twice as often as any other state.

The number of states represented also improved for the month, with a total of 21 states and the District of Columbia making a showing on the list, compared to 14 states in November.

The markets that gained acceptance to the list in December included Ann Arbor, Mich.; Athens, Ga.; Boulder, Colo.; Burlington, Vt.; Canton, Ohio; Charleston, W.Va.; Danville, Va.; Fort Wayne, Ind.; Grand Forks, N.D.; Jackson, Miss.; Kingsport, Tenn.; Laredo, Texas; Lincoln, Neb.; Muncie, Ind.; Muskegon, Mich.; San Jose, Calif.; Scranton, Pa.; Toledo, Ohio; Washington, D.C.; and Winchester, Va.

The nine states dropped from the list were largely excluded due to weakening home prices.

Claire Easley is a senior editor at Builder.

Learn more about markets featured in this article: Ann Arbor, MI, Athens, GA, Boulder, CO, Burlington, VT, Canton, OH, Charleston, WV, Danville, VA, Fort Wayne, IN, Grand Forks, ND, Jackson, MS, Kingsport, TN, Laredo, TX, Lincoln, NE, Muncie, IN, Muskegon, MI, San Jose, CA, Toledo, OH, Washington, DC, Winchester, VA, Greenville, SC.