Freddie Mac: Housing Market Posts ‘Strong Improvement’
Freddie Mac, McLean, Va., said its latest Multi-Indicator Market Index showed the U.S. housing market continuing to improve, growing by more than 6 percent over the past year.
The Index showed with two additional states–New York and Kansas–entering their outer range of stable housing activity, as well as three more metro areas: New York, Minneapolis and Palm Bay, Fla.
The national MiMi value improved to 81.9, indicating a housing market that is on its outer range of stable housing activity, while showing an improvement of 0.59 percent from September to October and a three-month improvement of 1.54 percent. On a year-over-year basis, the national MiMi value improved by 6.31 percent. Since its record low in October 2010, the national MiMi has rebounded 38 percent, but remains significantly off from its high of 121.7.
Freddie Mac Deputy Chief Economist Len Kiefer said the 6.31 percent annual growth is the best improvement seen in the MiMi since July 2014.
“While strong home purchase applications and rising home values in some markets are contributing to this improvement, its largely more of a reflection of mortgage delinquencies continuing to decline at a steady pace, especially in those hardest hit markets and a better employment picture overall,” Keifer said.
Other report highlights:
–Thirty-two states plus the District of Columbia have MiMi values in a stable range, with D.C. (101.1), North Dakota (95.3), Montana (95.1), Hawaii (94.1) and Utah (92) ranking in the top five. Compared to a year ago, 21 states and the District of Columbia had MiMi values in a stable range.
–Fifty-three of the 100 metro areas have MiMi values in a stable range, with Fresno, Calif. (101.9), Austin, Texas (96.5), Honolulu (95.5), Salt Lake City (95.2) and Los Angeles (95) ranking in the top five. Compared to a year ago, 29 of the top 100 metros had MiMi values in a stable range.
–Most improving states month-over-month were New York (+1.90%), New Jersey (+1.79%), Florida (+1.29%), Nevada (+1.27%), and Oregon (+1.26%). On a year-over-year basis, most improving states were Florida (+14.47%), Oregon (+12.2%), Colorado (+11.97%), Washington (+11.69 %) and Nevada (+11.13%).
–Most improving metro areas month-over-month were Allentown, Pa. (+1.99%). Tampa, Fla. (+1.98%), Cleveland (+1.93%), Palm Bay, Fla. (+1.91) and Las Vegas (+1.69%). On a year-over-year basis, most improving metro areas were Orlando (+17.94%), Tampa (+16.94%), Cape Coral, Fla. (+16.60%), Denver (+15.21%) and Palm Bay (+14.78).
–Forty-three states and 89 of the top 100 metros showed an improving three-month trend. The same time last year, 36 states and 70 of the top 100 metro areas showed an improving three-month trend.
“We do expect homebuyer affordability to decrease in the coming year, but we don’t expect tighter monetary policy to generate a spike in longer-term interest rates in the foreseeable future,” Keifer said. “The Fed has committed publicly to measured increases in short-term rates. While mortgage rates will rise modestly, they will still remain at historically low levels. Combined with stronger job and income growth, the net result may be strong growth in household formation, construction, and home sales.”
