Friday
August 22, 2014

Housing Market Shows Mixed Picture

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Housing Market Shows Mixed Picture

Most housing markets remain weak due to a low number of home purchase mortgage applications, even at a time of falling mortgage delinquencies, improving local employment, home price gains, and competitive mortgage rates, according to the latest reading on Freddie Mac’s Multi-Indicator Market Index or MiMi.

The index measures the stability of the nation’s housing market and identifies how each single-family housing market is doing relative to its long-term stable range, measured via home purchase applications, payment-to-income ratios, proportion of on-time mortgage payments, and the local employment market. 

The latest national MiMi value stands at -3.01 points, which indicates a weak housing market overall (the nation’s all-time MiMi low was -4.49 in November 2010). However, on a year-over-year basis, the housing market has improved by 0.65 points.

"With the latest release of MiMi we're seeing very slow improvement on the housing front with most markets still trying to move beyond stall speed,” says Freddie Mac’s Chief Economist Frank Nothaft. “The MiMi indicators that are improving across the board show the local jobs picture getting better and seriously delinquent rates continuing to come down. Both indicators are critical to decreasing distress in local markets, but that's also putting more pressure on markets with thinning inventory, especially where short sales have fallen off dramatically. However, as you look at each of the individual markets MiMi tracks, they have their own unique dynamics and show housing markets recovering at different paces."

At a state-level, 10 of the 50 states plus the District of Columbia are considered in their “stable” range:

  1. North Dakota
  2. Wyoming
  3. Washington, D.C.
  4. Louisiana
  5. Alaska
  6. Montana
  7. Texas
  8. Hawaii
  9. Vermont
  10. West Virginia
  11. South Dakota

At the metro-level, four cities are labeled in “stable” range:

More data on rebounding cities:

10 Biggest Rebound Cities Since the Recession

  1. San Antonio
  2. Houston
  3. Austin
  4. New Orleans

"Texas is clearly a standout with three of its metros claiming the top five MiMi spots,” says Len Kiefer, Freddie Mac’s deputy chief economist. “However, states like South Carolina, Rhode Island, and Ohio have showed marked improvement since just the beginning of the year. In fact, those metro areas that are closest to joining the handful of markets that have already achieved their stable range of housing activity are Pittsburgh and Oklahoma City, as is the state of Oklahoma. And solid jobs gains, attractive mortgage rates and good affordability will help this trend spread to even more markets. However, income growth and greater inventory is just as important if we're going to sustain any type of meaningful housing recovery."

The following five states have shown the most improvement in the past year, according to the MiMi:

  1. Florida
  2. Nevada
  3. Texas
  4. South Carolina
  5. California

The five most improving metros year-over-year are:

  1. Miami
  2. Orlando
  3. Las Vegas
  4. Tampa
  5. Riverside, Calif.

Source: Freddie Mac