Freddie Mac: Housing Markets Steady with Significant Room for Improvement
Freddie Mac, McLean, Va., said its latest Multi-Indicator Market Index showed the majority of the top 100 largest housing markets across the country improving steadily, helping to produce the best year in homes sales in a decade.
Freddie Mac reported the national MiMi value rose to 86, indicating a housing market that’s on the outer edge of its historic benchmark range of housing activity with a +0.42 percent improvement from August to September and a three-month improvement of +1.61 percent. On a year-over-year basis, the national MiMi value improved by +5.56 percent. Since its record low in October 2010, the national MiMi has rebounded 45 percent, but remains significantly off its high of 121.7.
Other report metrics:
–Forty-one states plus the District of Columbia have MiMi values within range of their benchmark averages, with Utah (100.4), Colorado (97.8), Hawaii (97), Idaho (96.7) and North Dakota and Oregon at (95.8) ranking in the top five with scores closest to their historical benchmark index levels of 100.
–Seventy-six of the 100 metro areas have MiMi values within range of their benchmark averages, with Honolulu (99.8), Nashville, Tenn. (100.2), Ogden, Utah (99.3), Dallas (99.2) and Provo, Utah (101) ranking in the top five with scores closest to their historical benchmark index levels of 100.
–Most improved states month over month were Nevada (+2.59%), Arizona (+1.54%), Massachusetts (+1.53%), South Carolina (+1.34%) and Colorado (+1.24%). On a year-over-year basis, most improved states were Nevada (+11.74%), Florida (+11.58%), Massachusetts (+11.35%), Mississippi (+9.76%) and New Jersey (+9.61%).
–Most improved metro areas month over month were Las Vegas (+2.57%), Charleston, S.C. (+2.00%), Seattle (+1.76%), Worcester, Mass. (+1.74%) and Springfield, Mass. (+1.52%). On a year-over-year basis, most improved metro areas were Orlando (+17.85%), Worcester (+14.49%) Tampa, Fla. (+14.36%), Chattanooga, Tenn. (+14.20%), and Dallas (+13.89%).
–In September, 40 of the 50 states and 75 of the top 100 metros were showing an improving three-month trend. The same time last year, 46 states and 96 of the top 100 metro areas were showing an improving three-month trend.
“National home prices have surpassed their pre-recession nominal peak with about half of states still below their pre-recession peak,” said Freddie Mac Deputy Chief Economist Len Kiefer. “Factoring in low mortgage rates and modest income gains, house prices still have some room to run, as indicated by the MiMi payment-to-income indicator which is nearly 33 percent below its historic benchmark.”
However, Kiefer noted the recent jump in mortgage rates could drive down homebuyer affordability and likely dampen demand for home sales next year. “Though we’ve come far, as indicated in the national statistics, housing still has significant room for improvement in many markets across the country as indicated by the fact that 24 out of the top 100 metros are still more than 20 percent below their historic benchmark as measured by MiMi,” he said.
