Seasonal Stumble in Housing Market -Freddie Mac

Freddie Mac said today that housingrnmarket stability “stumbled a bit” due to the cold winter weather and softeningrneconomic growth.  The company’srnMulti-Indicator Market Index (MiMi) declined slightly in January a decline describedrnas broad-based rather than concentrated in just a few state or metropolitanrnmarkets.  Despite the lower MiMi index,rnFreddie Mac’s economists said that “an improving labor market and attractivernmortgage rates continue to promise a strong spring homebuying season.”</p

The national MiMi value declined arnslight 0.20 percent from December to January to stand at 74.6, indicating a<bweak housing market overall.  In additionrnto the month-over-month negative change there was a 3-month decline of -0.37rnpercent.  On a year-over-year basis, thernU.S. housing market has improved by 3.39. </p

Fourteen of the 50 states plus thernDistrict of Columbia had MiMi values in a stable range in January, with NorthrnDakota (96.9), the District of Columbia (96.3), Hawaii (90.1), Montana (90.0),rnand Wyoming (88.4) ranking in the top five. </p

Nine of the 50 metro areas included inrnthe analysis were also in a stable range led by Austin (86.0), Los Angelesrn(85.2), San Jose (84.1), Houston (82.2), and San Francisco (82.2).  </p

In January, 11 of the 50 states and 21rnof the 50 metros were showing an improving three month trend. The same timernlast year, 49 states plus the District of Columbia, and all 50 of the top 50rnmetro areas were showing an improving three month trend. </p

The MiMi index monitors and measuresrnthe stability of housing markets at the national, state, and metropolitanrnlevels, combining proprietary Freddie Mac data with current local market datarnto assess where each single-family housing market is relative to its ownrnlong-term stable range. The MiMi formula takes into account home purchasernapplications, payment-to-income ratios (changes in home purchasing power basedrnon house prices, mortgage rates and household income), proportion of on-time mortgagernpayments in local markets, and the local employment picture. These indicatorsrnare combined to create a composite MiMi value for each market which shows wherernit stands relative to its own stable range of housing activity. MiMi alsornindicates how each market is trending, whether it is moving closer to, orrnfurther away from, its stable range. </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 housing market has made a 30 percentrnrebound. </p

Freddie Mac Deputy Chief Economist LenrnKiefer said, “Housing markets weakened slightly this month, which is no surprisernconsidering the harsh winter and slowdown in economic activity at the outset ofrn2015. While single-family purchase applications dipped a bit across the boardrnfrom December to January, they are still up nearly 3 percent from last year.rnImproving employment and attractive mortgage rates should help to supportrnincreased purchase applications, particularly as the weather warms up and wernhead into the spring homebuying season.”</p

“The good news is that mortgagerndelinquencies also continued their steady decline. The national MiMi current onrnmortgage indicator for January is up 10 percent from a year ago at 67.5, thernhighest level we’ve seen since in six years. The improvement in householdsrnpaying their mortgages on time has been dramatic. For example, at its lowrnpoint in February of 2010, California’s MiMi current on mortgage indicator wasrnjust 22.8. Since then, California has seen major improvements and todayrnthe current on mortgage indicator is 77.6, showing a 240 percent improvementrnfrom its low point and an 8.2 percent improvement from one year ago.”

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