Despite rating, metros in West and Southwest housing market most ‘stable’
Freddie Mac’s recent Multi-Indicator Market Index (MiMi) indicates that overall, the U.S. housing market is still underperforming.
The national housing market received a recent rating of 78.7 percent, which is up 2.1 points from three months ago and 3.57 points annually. However, a value below 80 is considered “weak” by Freddie’s standards.
A sub-80 value for the nation indicates that a number of markets are seeing unemployment, delinquency or payment-to-income rates that exceed historical averages. A number of these markets must also be experiencing a decrease in home purchase applications.
On the flip side, 26 of the 50 states, plus the District of Columbia, have MiMi values in a “stable” range – 80 to 120, including:
• District of Columbia (97.8)
• North Dakota (96.3)
• Montana (92)
• Hawaii (91)
• Alaska (87.4)
“Unlike a year ago, when the most improving markets were those hardest hit by the Great Recession, we’re now seeing stable markets among the most improving as well,” said Len Kiefer, deputy chief economist for Freddie Mac.
He cites the West and Southwest as the regions leading the country, especially Colorado, Oregon and Utah — with California being “right there.”
The year-over-year data backs up Kiefer’s insight, with the most improved states being:
• Florida – 10.89 percent increase
• Nevada – 10.55 percent increase
• Oregon – 10.29 percent increase
• Colorado – 8.72 percent increase
• Michigan – 8.31 percent increase
Thirty-five of the 100 metro areas analyzed have MiMi values in a stable range, with Fresno, California (94.8), Honolulu (92.3), Austin (92.1), Los Angeles (89.1) and Salt Lake City (88.9) ranking in the top five.
In April, 43 of the 50 states and 92 of the 100 metros analyzed showed improvement spanning the previous three months. During the same time last year, all 50 states plus the District of Columbia, along with 99 of the top 100 metro areas, were showing an improving three-month trend.
The most improved metros during the past month included:
• Palm Bay, Florida
• Portland, Oregon
• Oxnard, California
• Lakeland, Florida
All five metros saw a monthly improvement ranging from 1.19 to 1.51 percent.
Despite more markets stabilizing, Freddie Mac predicts that homeownership rates will keep falling this year, citing demographics trumping demand.
What this means for you
If you’re also a Portland resident, this news probably just reinforces what you’ve already heard about the local housing market. Those outside of Portland still need not worry, because although this index may deem the market ‘weak’, there are still many expert analysis which indicate a strong path to market recovery.