Freddie Mac, the government sponsored enterprise created in 1970 to expand the secondary market for mortgage in the U.S., publishes a Multi-Indicator Market Index (MiMi) which this month indicates that housing markets across the country are being driven into the green by employment rates and mortgage payments being current.
A stable housing economy within MiMi lies between 80 points and 120 points, with the current value rising to 82.5 as of November 2015. Having risen 7.23 percent over the last year, the current market rests on the outer edge of stability. The all-time low of 2010 was 43.5, with the all-time high having hit 121.7. While we’re barely into the stable green zone, all indications are that the value will continue to rise as we distance ourselves from the recession at the turn of the decade.
While employment and current mortgage numbers are stable and pushing the housing market in the right direction, MiMi also notes that purchase applications and payment-to-income remain weak. While there is still work to be done in these areas, it is encouraging to note that as of last year, 21 states and Washington, D.C. had stable MiMi values, with that number rising to 33 states today. The same can also be said of 57 of the top 100 metropolitan areas, up from 28 last year.
Len Kiefer, Freddie Mac Chief Economist, has been quoted saying,
“We saw another strong year-over-year improvement at 7.23 percent in this month’s MiMi, the best 12-month showing in a year. The regional variation of housing activity continues to become more pronounced. For example, we’re still seeing declines in oil-dependent housing markets, whereas the hardest hit metros from the Great Recession continue to see some of the best improvement as they recover. And at the same time, other markets are seeing even stronger improvement because of robust home sales fueled by strong local economies that remain largely affordable for the typical homebuyer. And in the short-term, we expect homebuyer affordability to remain strong with mortgage rates continuing to look very attractive to prospective homebuyers.”