Housing Indicator Continues to Stabilize; Energy States at Risk

FreddiernMac said on Wednesday that its Multi-Indicator Market Index (MiMi) still shows that,rnat the national level, housing is continuing to stabilize.  Thirty-eight of the 50 states plus thernDistrict of Columbia are now showing an improving three-month trend as are 40rnof the 50 largest metro areas. However, at the same time last year, 47 states plus the District ofrnColumbia, and 47 of the top 50 metro areas were showing an improving threernmonth trend. </p

MiMi monitors andrnmeasures the 50 state and 50 metro areas by looking at home purchasernapplications, payment-to-income ratios (changes in home purchasing power basedrnon house prices, mortgage rates and household income), proportion of on-timernmortgage payments in each market, and the local employment picture. From thisrnthe company creates a composite MiMi value for each market to show, at arnglance, where each stands relative to its own stable range of housing activityrnand whether it is moving closer to, or further away from, its stable range. Arnmarket can fall outside its stable range by being too weak to generate enoughrndemand for a well-balanced housing market or by overheating to an unsustainablernlevel of activity.</p

The national MiMi increased by 0.37 percent from November tornDecember to stand at 74.9 percent.  Therernis a positive 3-month trend of 1.09 percent and the national market hasrnimproved by 4.41 percent on a year-over-year basis.  </p

The nation’s all-time MiMi high ofrn121.7 was April 2006; its low was 57.2 in October 2010, when the housing marketrnwas at its weakest. Since that time, the housing market has made a 31 percentrnrebound. </p

Sixteen states and the District ofrnColumbia are now in a stable range led by the District (97.6), North Dakotarn(97.2), Montana (91.1), Hawaii (89.9) and Wyoming (89.1).  Three new metropolitan areas, Buffalo,rnBoston, and Nashville entered their stable ranges, bringing that total to 11rnled by Los Angeles (86.4), Austin (86.3), SanrnJose (83.9), Houston (83.3), and Pittsburgh (83.3). </p

Nevada improved its standing by nearlyrn20 percent year-over-year followed by Colorado, Rhode Island, Illinois, andrnOhio all of which improved by between 9 to 12 percent.  The most improved metro areas on an annual basisrnwere Las Vegas which nearly matched its state’s performance, Denver, Chicago, andrnProvidence, all improving by low double digits.</p

Freddie Mac noted that it is continuingrnto keep an eye on markets with deep ties in energy and have seen somerndeterioration from the previous month in some of those markets.  Louisiana, for example, as seen employmentrnworsen over the last several months which has caused the states MiMi score tornmove from 86.7 in April 2014 to a current 80.2</p

Freddie Mac Deputy Chief Economist LenrnKiefer said, “Housing markets are getting back on track. The national MiMirnimproved for the fourth consecutive month. Nearly 80 percent of the state andrnmetro housing markets MiMi tracks are improving or in their stable range ofrnactivity. We’ve even seen the MiMi purchase application indicator increase 0.07rnpercent on a year-over-year basis. Low mortgage rates and moderating housernprice growth are helping to keep payment-to-income ratios favorable for therntypical family in most of the country. In fact, Los Angeles is the onlyrnmetro market with an elevated MiMi payment-to-income indicator whereas mostrnother markets remain quite affordable. And of course, labor markets arerngenerally improving.

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