Running Out of Ways to Say 'Housing Weak but Improving'

Freddie Mac said that itsrnMulti-Indicator Market Index (MiMI) for March continues to indicate a weakrnhousing market overall but both monthly and quarterly improvement.  The Index was at 75.4 in March, a 0.69rnpercent gain from February and a three month improvement of 1.24 percent.  Since March 2014 the indicator has movedrnupward by 3.11 percent.</p

The company said that the U.S. housingrnmarket is continuing to stabilize and those markets showing the mostrnimprovement are also seeing stronger home sale demand in the spring market.  Even with strong home price growth lowrnmortgage rates are keeping homes affordable in most markets.</p

Freddie Mac Deputy Chief Economist LenrnKiefer said, “The nation’s housing markets are getting back on track.rnBetter employment prospects, rising home values and increased purchase activityrnare all driving improvements in housing markets across the country. In thisrnmonth’s MiMi three more states and seven metro areas moved within range ofrntheir benchmark level of activity. However, as we’ve mentioned before,rnwe’re likely to see bouts of affordability shock with mortgage rate swings forrnthe remainder of this year as market participants try to anticipate Fed timingrnaround rising short term interest rates and expectations for global growth waxrnand wane.”</p

Freddie Mac uses its proprietary datarncombined with local market data to measure housing markets nationally, in allrn50 states and the 100 top metro markets. rnThe MiMi assesses where each single-family housing market is relative tornits own long-term stable range by looking at home purchase applications,rnpayment-to-income ratios (measuring changes in home purchasing power), proportionrnof on-time mortgage payments in each market, and the local employment picture.rnThe four indicators are combined to create a composite MiMi value for eachrnmarket and whether it is moving closer to or further away from its stablernrange.</p

The nation’s all-time MiMi high ofrn121.7 was April 2006; its low was 57.4 in October 2010, when the housing marketrnwas at its weakest. Since that time, the national MiMi has made a 31.3 percentrnrebound. </p

Seventeen states and the District ofrnColumbia are now in a stable range led by North Dakota (95.8), the District ofrnColumbia (95.6), Hawaii (90.5), Montana (90), and Wyoming (85.7). Twenty-five metrornareas are also in a stable range including top five Honolulu, Fresno, Austin,rnLos Angeles, and McAllen, Texas.  </p

The most improving statesrnmonth-over-month were Washington, Oregon, Arizona, Tennessee and Michigan whilernyear-over-year improvement was greatest in Nevada, Oregon, Colorado, Florida,rnand Michigan. </p

In March, 36 of the 50 states and 77 ofrnthe 100 metros showed an improving three month trend compared to a year agornwhen 40 states plus the District of Columbia, and 82 metro areas were trendingrnup. </p

Kiefer continued, “The West andrnSouthwest areas of the country are showing some of the strongest housingrnactivity, especially markets like Portland, Denver, Dallas, San Jose and LosrnAngeles. Many markets in the South and Midwest, while improving, are stillrnplagued by high rates of mortgage delinquencies, which are holding back thesernmarkets from recovering faster. The exception to this would be thernNashville-area market. It more closely resembles the housing markets in thernWest, such as those in Utah. These markets are experiencing double-digit annualrngrowth rates in purchase applications and showing some of the strongestrnhomebuying demand in the country.”

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