Multiple market indicators show solid strong stabilization within housing in June, mostly due to employment and current mortgages, according to Freddie Mac's Multi-Indicator Market Index (MiMi).
Housing markets are the strongest they have been since 2008, with the national MiMi surpassing 80 in June. Freddie Mac attributes most of this positive growth to a surge in jobs and mortgages that are kept current in nearly all metros.
"Nationally, all MiMi indicators are heading in the right direction," said Len Kiefer, Freddie Mac deputy chief economist. "Robust homebuyer demand has put total home sales on pace for the best year since 2007 and look for that trend to continue as the MiMi purchase applications indicator remains on the upswing."
The national MiMi value reached 80.3 in June, indicating that the housing market is on the outer stable range. The MiMi saw an increase of 1.33 percent from May to June and a three-month improvement of 2.26 percent. Year-over-year, the MiMi rose 5.41 percent. Although the MiMi value has rebounded 35 since its all-time low in October, it remains much lower than its high of 121.7.
According to the MiMi, current mortgages and employment are the major contributors pushing the MiMi into the stable range. Current mortgages reached 82.7 points in June, up 0.82 percent from May. Meanwhile, employment landed at 101.7 points, up 0.64 points from May.
On the other hand, the purchase applications indicator landed weak for June at 65.2 points, although it improved 1.53 percent from May. In addition, the payment-to-income indicator was weak in June at 71.3 points, rising 2.80 percent from May.
Freddie Mac reported, Arkansas and Tennessee, along with four additional metro areas entered their outer range of stable housing activity: Omaha, Nebraska; Scranton, Pennsylvania; Chattanooga, Tennessee; and Madison, Wisconsin.
Of the 50 states, 28 and the District of Columbia have MiMi values in a stable range, with the District of Columbia (101.7), North Dakota (96.2), Montana (93.5), Hawaii (92.9), and California and Utah tied at (89) and ranking in the top five.
"While home prices are still 7 percent below peak values nationally, price indices in many markets are at all-time highs and current low-interest rates are helping to support homebuyer affordability," Kiefer said. "Mortgage delinquencies are coming down rapidly, but are still high in many markets. Those markets hardest hit by the Great Recession, including many in Florida, are rebounding but they still need to improve to get delinquencies back in line with their benchmark historic averages. The key driver of all this recovery has been solid job growth, with 96 out of 100 metros and all states within range of their benchmark historic average unemployment rate."
Source: Freddie Mac