The majority of the top 100 housing markets nationwide are improving compared to their historic benchmark range of housing activity, according to Freddie Mac’s Multi-Indicator Market Index, known as MiMi.
The index measures the stability of the housing market by reflecting how single-family housing markets are performing to their long-term stable range based on home purchase applications, payment-to-income ratios (changes in home purchasing power based on home prices, mortgage rates, and household income), proportion of on-time mortgage payments, and local employment.
The MiMi value now stands at 86.4. Since its all-time low reached in October 2010, the national MiMi has rebounded 46 percent. Still, it remains significantly off its high of 121.7, and below its historic benchmark of 100.
Nevertheless, the majority of the housing markets measured are seeing improvements. Forty-three of the 50 states and 82 of the top 100 metros are showing an improving three-month trend. Last year at this time, only 30 states and 69 of the top 100 metro areas were showing a three-month improvement.
"The purchase applications indicator is up nearly 20 percent from last year and is reflected in the recent better-than-expected existing and new home sales purchase data,” says Len Kiefer, Freddie Mac’s deputy chief economist. However, "MiMi does not yet capture the recent jump in mortgage rates since the election, which will drive down home buyer affordability and likely dampen demand for home sales next year in some markets. While we see strong house price growth in markets like Dallas, Houston, Orlando, Phoenix and others, most are still well below their pre-2008 peak and still have significant room for improvement."
The states showing the most year-over-year improvement, according to Freddie Mac’s index, are: Nevada, Massachusetts, Florida, Mississippi, and Arizona. The most improving metro areas year-over-year are: Orlando, Fla.; Worcester, Mass.; Chattanooga, Tenn.; Dallas, Texas; and Tampa, Fla.
Source: Freddie Mac