After falling in April and May, the National Association of Home Builders (NAHB)/ First American Improving Markets Index (IMI) resumed its upward trend in June,NAHB reported.

According to the association, the number of U.S. housing markets showing sustained growth in housing permits, home prices, and employment rose to 263 in June, five more than May’s total. The index grew for several months to a record high of 274 in March before falling to 273 in April and then 258 in May.

The list of improving markets includes entrants from 49 states and the District of Columbia, NAHB reported. For the June index, 29 new markets were added to the list, while 24 were dropped. New entrants include Salinas, California; Sioux City, Iowa; Topeka, Kansas; and Laredo, Texas.

“As market conditions improve across most of the country, some metros have moved onto the IMI list while marginal seasonal fluctuations have nudged others off of it,” noted NAHB chief economist David Crowe. “This is to be expected as the recovery expands. Meanwhile, it’s worth noting that the number of improving markets is now more than three times what it was in June 2012.”

While the most recent report shows only a slight recovery from May’s sizable drop, NAHB chairman Rick Judson said the index is still in good shape, though challenges remain.

“This is the fifth consecutive month in which the IMI has designated more than 70 percent of U.S. metros as improving,” Judson said. “While that’s a good sign that the housing recovery is on solid footing, we know that various challenges are slowing its progress—including continuing issues with credit availability for builders and buyers, as well as appraisals that aren’t keeping up with the rising cost of construction.”