U.S. Housing Market Shows Positive Trends
MCLEAN, VA–(Marketwired – Apr 27, 2016) – Freddie Mac (OTCQB: FMCC) today released its Multi-Indicator Market Index® (MiMi®), showing that many of the nation’s housing markets continue to improve with one more state, Michigan, returning to its historical benchmark level of housing activity.
The national MiMi value stands at 83, indicating a housing market that’s on the outer range of its historic benchmark level of housing activity, and little changed with a +0.36 percent improvement from January to February and a three-month improvement of +1.05 percent. However, on a year-over-year basis, the national MiMi value has improved +7.46 percent. Since its all-time low in October 2010, the national MiMi has rebounded 40 percent, but remains significantly off from its high of 121.7.
Thirty-five of the 50 states plus the District of Columbia have MiMi values within range of their benchmark averages, with the District of Columbia (101.7), North Dakota (95.3), Hawaii (95.2), Montana (94.8) and Utah (94.6) ranking in the top five.
Fifty-nine of the 100 metro areas have MiMi values within range with Austin, TX (100.5), Denver, CO (100.8), Salt Lake City, UT (97.7), Honolulu, HI (97.4), and Los Angeles, CA (97.0) ranking in the top five.
The most improving states month over month were Tennessee (+1.93%), Mississippi (+1.46%), Texas (+1.11%), Oregon (+1.08%) and Nevada (+0.91%). On a year-over-year basis, the most improving states were Colorado (+15.54%), Florida (+15.33%), New Jersey (+14.37%), Oregon (+14.30%), and Nevada (+14.24%).
The most improving metro areas month over month were Youngstown, OH (+3.55%), Memphis, TN (+2.54%), Jackson, MS (+1.82%), Knoxville, TN (+1.58%) and Dallas, TX (+1.43%). On a year-over-year basis, the most improving metro areas were Orlando, FL (+19.88%), Denver, CO (+19.01%), Tampa, FL (+18.36%), Cape Coral, FL (+18.07%), and Portland, OR (+16.85).
In February, 36 of the 50 states and 68 of the top 100 metros were showing an improving three-month trend. The same time last year, 21 of the 50 states, and 69 of the top 100 metro areas were showing an improving three-month trend.
Quote attributable to Freddie Mac Deputy Chief Economist Len Kiefer:
“The U.S. housing market is poised to have its best year in a decade. The National MiMi currently stands at 83, the highest since September of 2008. And the trends are nearly all positive. Home purchase applications are headed higher, with the National MiMi purchase applications indicator increasing nearly 12 percent from one year ago. The mortgage delinquency crisis is not completely behind us, but delinquencies are generally trending down, with the National MiMi current on mortgage indicator at 85.5, the highest reading since August 2008. Robust employment growth has helped drive the National MiMi employment indicator above its historic benchmark, and stands at 106.5, up nearly 6 percent from a year ago. The National MiMi payment-to-income indicator did fall 2.76 percent from the previous month due to lower mortgage interest rates. Lower rates are helping to support homebuyer affordability across the country, for the moment outweighing the impact of higher house prices.
“The national trends largely hold up across the country. We still see pockets of weakness in the Midwest and South, while the Northeast and West are generally doing better. But most markets in the Midwest and South are improving according to MiMi. For example, Michigan’s MiMi reading increased 7.49 percent year-over-year in February, moving within range of its historic benchmark.”
The 2016 MiMi release calendar is available online.
MiMi monitors and measures the stability of the nation’s housing market, as well as the housing markets of all 50 states, the District of Columbia, and the top 100 metro markets. MiMi combines proprietary Freddie Mac data with current local market data to assess where each single-family housing market is relative to its own long-term stable range by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of on-time mortgage payments in each market, and the local employment picture. The four indicators are combined to create a composite MiMi value for each market. Monthly, MiMi uses this data to show, at a glance, where each market stands relative to its own stable range of housing activity. MiMi also indicates how each market is trending, whether it is moving closer to, or further away from, its stable range. A market can fall outside its stable range by being too weak to generate enough demand for a well-balanced housing market or by overheating to an unsustainable level of activity.
For more detail on MiMi see the FAQs. The most current version can be found at FreddieMac.com/mimi.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for approximately one in four home borrowers and is the largest source of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.