Only 2 in 5 Housing Markets are Improving -Freddie Mac

Freddie Mac’s new Multi-Indicator MarketrnIndex (MiMi) continues to show a weak housing market overall.  The national MiMi value is flat compared tornlast month and has improved only slightly year-over- year.</p

MiMi monitors and measures thernstability of the nation’s housing market, as well as the housing markets of allrn50 states, the District of Columbia, and the top 50 metro markets. MiMirncombines proprietary Freddie Mac data with current local market data to assessrnwhere each single-family housing market is relative to its own long-term stablernrange by looking at home purchase applications, payment-to-income ratios, proportionrnof on time mortgage payments in each market, and the local employment picture. </p

These indicators are combined into a compositernMiMi value for each market. The MiMi value ranges between -12 and 12 andrnhelps determine if a housing market is Weak, In Range, or Elevated relative tornits own stable range of housing activity and whether the market is trendingrntoward or away from that range   A market can fall outside its stable range byrnbeing too weak to generate enough demand for a well-balanced housing market orrnby overheating to an unsustainable level of activity.</p

ThernMiMi for March stands at -3.06 point, a 0.03 point improvement from February.  Thernthree month trend for March is +0.05. rnThat value must move by at leastrnone-tenth of a point or the associated directional trend for that market’srnthree month period is considered flat.  </p

On a year-over-year basis, the U.S.rnhousing market has improved by 0.66 points. The nation’s all-time MiMi low ofrn-4.49 was in November 2010 when the housing market was at its weakest. </p

Most of the states and metro areas arerncalled “weak and flat” or “weak and declining” in the MiMi narrative.  Ten of the 50 states and the District ofrnColumbia are in their stable range as are four of the 50 metro areas.  The top five states are North Dakota, Wyoming, the District of Columbia, Alaska, andrnLouisiana, all unchanged from last month and the four metros are San Antonio,rnNew Orleans, Austin, and Houston.  </p

Thernstates that were most improved from February to March were Ohio, Rhode Island,rnIllinois, Texas, and South Carolina while those that improved the most fromrnMarch 2013 were Florida, Nevada, South Carolina, California, and Texas.  Improved metros on a month-over-month basisrnwere Cincinnati, Columbus, Houston, Riverside, and San Antonio while year overrnyear they were Miami, Orlando, Las Vegas, Tampa, and Riverside. Freddie Macrnnotes that most of the markets that are improving or in a stable range arernareas currently in the midst of an energy boom.</p

Overall,rnin March, 13 of the 50 states plus the District of Columbia are improving basedrnon their three month trend, and 20 of the 50 metros show an improving trend. </p

Freddie Mac Chief Economist FrankrnNothaft said, “Less than half of the housing markets MiMi covers arernshowing an improving trend, whereas at this same time last year more than 90rnpercent of these same markets were headed in the right direction. We’re hopefulrnthat many of these markets that have stalled will start moving again now thatrnmortgage rates have eased over the past month and the spring home buying seasonrnis upon us. House price gains are a double-edged sword at this stage of thernrecovery. They help those hard-hit markets where prices are still low and manyrnhomeowners are underwater, but in areas where supply is constrained, they’rerncreating an imbalance and pricing out many first-time homebuyers.”</p

The National Mimi and interactivernindices for each of the states and metro areas can be accessed at http://www.freddiemac.com/mimi/.

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