Purchase Apps Rise to Nine-Year High

The purchase applications index of Freddie Mac’s Multi-Indicator Market Index (MiMi) increased in June to its highest level in nearly nine years as the national MiMi remained on the outer range of the historical benchmark for housing activity.

The MiMi covering June 2016 reported a value of 85 for the national index, a slight uptick from May (0.08 percent) and a three-month improvement of 1.37 percent. A value of 80 is the lowest point of what is considered stable, meaning the June value for purchase applications (77.5), an increase of 1.75 percent from May, is on the cusp of stable.

“Nationally, MiMi in June was largely unchanged at 85, marking a 5.76 percent year-over-year increase and the 50th consecutive month of year-over-year increases,” Freddie Mac Deputy Chief Economist Len Kiefer said. “Low mortgage rates and consistent job gains are helping to bolster homebuyer demand, which is reflected in the MiMi purchase applications indicator. Purchase applications, as measured by MiMi, rose 1.75 percent month over month in June to the highest level since December 2007.”

The national MiMi has rebounded by 42 percent since hitting an all-time low in October 2010, but is still significantly off of its all-time high of 121.7 reached in 2006.

Purchase applications is one of four indices that make up the national MiMi; purchase applications had a MiMi value of 68.7 in June, indicating still below stable; the current-on-mortgage index had a MiMi value of 87.0 in June, while the employment index was highest with a value of 106.8. The only one of these four indices that did not decline from May to June was purchase applications.

According to Freddie Mac, 38 out of 50 states and 77 out of 100 metros have MiMi values within range of their benchmark averages. The states with the MiMi values closest to their historical benchmark index levels of 100 in June were Utah (97), Hawaii (96.9), Oregon (96.9), Montana (96.8), and Colorado (96.3); the top metros in the same category were Los Angeles (99.8), Salt Lake City (100.4), Honolulu (98.9), Portland (98.2), and Provo, Utah (98.2).

Click here to view the entire Freddie Mac MiMi for June 2016.