June 25 - Freddie Mac has released its Multi-Indicator Market Index showing mixed signals for the U.S. housing market. Most housing markets remain weak despite declining mortgage delinquencies, improving local employment, house price gains and attractive mortgage rates due to weak home purchase mortgage applications.
Quote attributable to Freddie Mac Chief Economist Frank Nothaft:
"With the latest release of MiMi we're seeing very slow improvement on the housing front with most markets still trying to move beyond stall speed. The MiMi indicators that are improving across the board show the local jobs picture getting better and seriously delinquent rates continuing to come down. Both indicators are critical to decreasing distress in local markets, but that's also putting more pressure on markets with thinning inventory, especially where short sales have fallen off dramatically. However, as you look at each of the individual markets MiMi tracks, they have their own unique dynamics and show housing markets recovering at different paces."
Quote attributable to Freddie Mac Deputy Chief Economist Len Kiefer:
"Texas is clearly a standout with three of its metros claiming the top five MiMi spots. However, states like South Carolina, Rhode Island and Ohio have showed marked improvement since just the beginning of the year. In fact, those metro areas that are closest to joining the handful of markets that have already achieved their stable range of housing activity are Pittsburgh and Oklahoma City, as is the state of Oklahoma. And solid jobs gains, attractive mortgage rates and good affordability will help this trend spread to even more markets. However, income growth and greater inventory is just as important if we're going to sustain any type of meaningful housing recovery."
MiMi monitors and measures the stability of the nation's housing market, as well as the housing markets of all 50 states, the District of Columbia, and the top 50 metro markets. MiMi combines proprietary Freddie Mac data with current local market data to assess where each single-family housing market is relative to its own long-term stable range by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of on-time mortgage payments in each market, and the local employment picture. The four indicators are combined to create a composite MiMi value for each market. Monthly, MiMi uses this data to show, at a glance, where each market stands relative to its own stable range of housing activity. MiMi also indicates how each market is trending, whether it is moving closer to, or further away from, its stable range. A market can fall outside its stable range by being too weak to generate enough demand for a well-balanced housing market or by overheating to an unsustainable level of activity.