Freddie Mac Index Shows Deterioration in some Energy Dependent Markets

Freddie Mac’s Multi-Indicator MarketrnIndex (MiMi) rose nationally this month for the third consecutive time. This,rnalong with improving three month trends in thirty-four states and the Districtrnof Columbia and 37 of 50 metropolitan areas shows, the company said, that thernU.S. housing market is continuing to stabilize. rn The same time last year, 34rnstates plus the District of Columbia, and 41 of the top 50 metro areas werernshowing an improving three month trend. </p

Len Kiefer, Freddie Mac Deputy ChiefrnEconomist said, “Housing markets are stabilizing. Low mortgage rates helprnto keep affordability in-check across many markets. Labor markets arernstrengthening, but generally have room for improvement. We’re keeping an eye onrnmarkets with deep ties to energy. We’ve noticed some deterioration on arnmonth-over-month basis in some of these energy markets, especially smallerrnmarkets with less diversified economies. Overall MiMi has improved for thernthird consecutive month showing housing markets are getting back onrntrack.” </p

The MiMi combines Freddie Mac data withrnlocal information regarding home purchase mortgage applications,rnpayment-to-income ratios, proportion of on-time mortgage payments and local employmentrndata to create a composite value for each market.  This is used to show where each market standsrnrelative to its own stable range of housing activity and how a market isrntrending, whether toward or away from its stable range.</p

The current MiMi stands at 74.1rnnationally.  This indicates a weakrnhousing market overall but is slightly improved (0.35 percent) from October tornNovember and has a positive three month trend of 1.07 percent.  The MiMi is up 3.94 percent from a yearrnearlier.  The peak for the MiMi wasrn122.5, reached in June 2006 and its low was 60.3 in September 2011.  Since then the housing market has reboundedrnby 23.9 percent.</p

Fifteen states and the District ofrnColumbia are in a stable range as are eight metropolitan areas.  The top five states are North Dakota (95.8)rnthe District of Columbia (94.3), Montana (91.4), Wyoming (91.2), and Hawaiirn(89.1). . Top metro are San Antonio (89.5), Austin (87.0), Houston (85.3), LosrnAngeles (84.1) and Salt Lake City (83.6). </p

Georgia, North Carolina, Michigan,rnMaryland, and Delaware were the most improved states on a month-over-monthrnbasis with each gaining between 1.12 and 1.32 percent.   On anrnannual basis the strongest gains were in Nevada (+17.45%), Illinois (+10.15%),rnRhode Island (9.65%) Colorado (+8.63%) and Ohio (+8.45%) </p

Metropolitan areas most improved month-over-monthrnwere Atlanta (+1.64), Detroit (+1.40%), Charlotte (+1.35%), Birmingham (+1.32%)rnand Cleveland (1.20%). On a year-over-year basis the top five were Las Vegasrn(+20.14%), Chicago (+12.37%), Denver (+10.68%), Miami, (+10.57%), andrnProvidence (+9.45%).

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