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The MReport Webcast: Thursday 8/28/2014

The country's housing market continued to inch closer to normalcy in June, but the slow rate of progress remains a concern for analysts. Freddie Mac's Multi-Indicator Market Index rose just 0.04 percent from May to June, ending the year's first half at a reading of 73.7, the company reported Wednesday.

An index value between 80 and 120 is considered stable, with readings outside that range considered too weak or too high to be sustainable. While the rate of recovery remains painfully slow, Freddie Mac’s chief economist, Frank Nothaft, pointed to positive developments in a few major states, including California, Florida, and Illinois, which all posted strong growth compared to last year.

Nationwide, 13 states and the District of Columbia all have index values in their own stable range, with North Dakota, Washington, D.C., Wyoming, Montana, and Alaska ranking highest. Those are the areas where home purchase applications, local employment, payment to income ratios, and proportion of on-time payments look healthiest. At the metro level, only six of the 50 markets surveyed are in a stable range, including Houston, Austin, San Antonio, New Orleans, Salt Lake City, and Los Angeles.

Applications for mortgage loans increased last week, helped along by gains in both purchase and refinance loans. The Mortgage Bankers Association's latest Weekly Mortgage Applications Survey shows loan application volumes rose a seasonally adjusted 2.8 percent for the week ending August 22nd, doubling the rate of growth recorded the previous week. On an unadjusted basis, the improvement was smaller at 2 percent. With applications up for a second straight week, it remains to be seen if a more positive trend will form going forward or if the ups and downs of the summer will continue into fall.

 

About Author: Jordan Funderburk

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