Many housing markets remain weak overall, but those with stronger economies and favorable demographics are improving at a much stronger pace, per Freddie Mac’s latest Multi-Indicator Market Index. The so-called MiMi monitors the stability of the nation’s single-family housing market by looking at home purchase applications, payment-to-income ratios, on-time mortgage payments, and the local employment picture.
Overall, the index indicates a weak housing market (at 73.7) in June, the latest month measured, with only slight improvement month-over-month. Since reaching its lowest value of 59.8 in September 2011, the housing market has made a 23.3 percent rebound.
“As we see the economy slowly normalizing we’re starting to see its effects in the housing market as well, albeit very slowly,” says Frank Nothaft, Freddie Mac’s chief economist. “The good news is the big housing markets, of which some were also the hardest hit, continue to improve.”
For example, compared to the same time last year, California is up 12 percent and every market the MiMi tracks in the state is improving, Nothaft notes. Also, Florida is up nearly 15 percent, and Illinois is up nearly 13 percent over the past year.
“Likewise, the stalwarts of the recovery continue to be those states in the North Central section of the country, places like North Dakota, Montana, Wyoming, and then south to Texas and Louisiana,” Nothaft says. “In these areas not only are markets producing jobs, but better paying jobs that translate into workers taking out applications to purchase a home and income growth that keeps homebuyer affordability strong.”
Source: Freddie Mac