Freddie: Many Housing Markets Are Stalling
Many housing markets remain “stalled” largely due to weak home purchase mortgage applications, Freddie Mac reports in its Multi-Indicator Market Index, which shows how close markets are moving into their stable range of housing activity.
While more markets are moving into their stable range in the latest reading of the index – notably Salt Lake City, Los Angeles, Nashville, and Pittsburgh area – the housing market is showing mixed signals, Freddie reported.
The overall MiMi index stands at -2.94 points, which indicates a weak housing market and posted a -0.05 points decline from April to May. On a year-over-year basis, the housing market has improved slightly by 0.86 points, according to the index. The all-time low and the point at which the housing market was at its weakest was in November 2010 when the Mimi was at -4.42 points, according to Freddie’s index.
“We saw an additional handful of metro areas move back into their stable range in May despite most markets still trying to get beyond stall speed,” says Frank Nothaft, Freddie Mac’s chief economist. “When we look at the other MiMi indicators outside of mortgage purchase applications, the news remains positive – unemployment rates are coming down, more borrowers are paying their mortgages on time, and mortgage rates remain low. Moreover, while house price growth is moderating, many markets can still sustain additional house price gains while still maintaining strong home buyer affordability. So we remain cautiously optimistic the housing recovery will continue, albeit slowly, until we see more tightening in the labor markets to give personal incomes a much needed jolt.”
Thirteen of the 50 states, plus the District of Columbia, are now in their stable range, according to Freddie’s latest MiMi reading.
The states ranking on top are:
- North Dakota
- Washington, D.C.
Eight of the 50 metro areas tracked also are in their stable range by historical standards. Ranking in the top five:
- San Antonio, Texas
- Austin, Texas
- Salt Lake City
- New Orleans
The most improving states year-over-year remained unchanged in May:
- South Carolina
The most improving metros when evaluating year-over-year levels are:
- Orlando, Fla.
- Las Vegas
- Riverside, Calif.
- Austin, Texas
Source: Freddie Mac