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Freddie Mac: Housing Market Weak, Despite Scattered Local Improvements





The housing recovery continues to be a primarily local phenomenon, according to a market analysis from Freddie Mac. Although markets with strong economies and favorable demographics continue to improve, most markets are still generally weak, and the housing market as a whole remains sluggish.


Freddie Mac released its most recent Multi-Indicator Market Index (MiMi) on August 27, showing a current value of 73.7. This indicates a weak housing market overall, with only a slight improvement (0.04 percent) from May to June and a three-month positive trend of 0.16 percent. On a year-over-year basis, the MiMi has risen by 7.67 percent.

The nation's all-time MiMi high of 121.87 was June 2008; its low was 59.8 in September 2011, when the housing market was at its weakest. Since that time, the housing market has made a 23.3 percent rebound.

In June, 21 of the 50 states and 25 of the 50 metros are showing an improving three-month trend. The same time last year, every state plus the District of Columbia, and every metro was showing an improving three-month trend.

Thirteen of the 50 states plus the District of Columbia are considered to be in a stable range with North Dakota (96.2) the District of Columbia (94.3), and Wyoming (92.3), ranking as the top three. Six of the 50 metro areas are also considered stable with San Antonio (92.0), Austin (87.4), and New Orleans (84.8), leading the list.

"As we see the economy slowly normalizing we're starting to see its effects in the housing market as well, albeit very slowly," Freddie Mac chief economist Frank Nothaft said. "The good news is the big housing markets, of which some were also the hardest hit, continue to improve. For example, from the same time last year, California is up 12 percent and every market MiMi tracks in the state is improving."

Nevada (+1.56 percent), Illinois (+1.09 percent), and Connecticut (+0.93 percent) were the most improved states on a monthly basis, while Nevada (+23.5 percent), Florida (+14.8 percent), and Illinois (12.9 percent) improved the most from the previous year. The most improved metro areas from May to June were Las Vegas and Riverside (tied at +1.69 percent) followed by San Jose (+1.48 percent). On a year-over-year basis, the most improving metro areas were Las Vegas (+26.5 percent), Riverside, (+19.2 percent), and Miami (+17.2 percent).

"Florida is up nearly 15 percent and Illinois is up nearly 13 percent over the past year. Likewise, the stalwarts of the recovery continue to be those states in the North Central section of the country, places like North Dakota, Montana, Wyoming and then south to Texas and Louisiana," Nothaft said. "In these areas not only are markets producing jobs, but better paying jobs that translate into workers taking out applications to purchase a home and income growth that keeps homebuyer affordability strong."








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August 23, 2019, 1:46 pm PDT

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