A greater number of housing markets are showing signs of normalizing, as 70 of the markets tracked by a Freddie Mac index now move to positive momentum.
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Freddie Mac’s latest Multi-Indicator Market Index (MiMi) showed a reading of 74.5 nationwide, which still indicates a weak housing market overall but shows signs of improvement from September to October and an improvement year-over-year.
The index’s all-time high was set in June 2006 when it reached 122.5. Its lowest point was 60.3 in September 2011. Since then, the housing market has made a 23.5 percent rebound, Freddie Mac notes.
The index monitors the stability of the nation’s housing market using Freddie Mac and local market data to gauge the performance of single-family housing markets relative to a long-term stable range. The index tracks home purchase applications, payment-to-income ratios, on-time mortgage payments, and the local employment picture.
In October, 29 of the 50 states and 41 of the 50 metros tracked were showing an improving three-month trend.
“Housing markets continue to heal across the country with those hardest hit showing the biggest improvement,” Freddie Mac Chief Economist Frank Nothaft notes. “Low mortgage rates have helped, but we also need better household income growth. The employment picture needs to improve more to strengthen wage growth. The good news is we’re slowly starting to see this happen in areas like Denver, San Jose, Nashville, and Pittsburgh to name a few, where we’re also seeing better purchase application activity on a monthly basis.”
Thirteen of the 50 states, plus the District of Columbia, now have MiMi values in the stable range. The top five are: North Dakota, the District of Columbia, Montana, Wyoming, and Hawaii. Eight of the 50 metro areas tracked also have MiMi values in the stable range, led by San Antonio, Austin, Houston, Los Angeles, and Salt Lake City.
The states showing the most improvement in their housing markets year-over-year are: Nevada, Illinois, Florida, Rhode Island, and Colorado. On a metro level, the markets showing the largest year-over-year improvement are: Las Vegas, Chicago, Miami, Denver, and Riverside, Calif.
Source: Freddie Mac