Although anecdotal evidence might suggest otherwise, depending on what market you're in, Freddie Mac's Multi-Indicator Market Index, or MiMi, shows that the U.S. housing market is getting back on track heading into the spring home-buying season.
After a slight stumble in February, the index shows that there was some improvement in conditions as of March, with more metropolitan markets moving into the ‘stable’ category.
What's more, the report shows that, as of March, about 60% of the top 100 largest markets have been improving steadily during the previous three months.
As of March, the index stood at 74.7, indicating a weak housing market overall – however, there was a slight improvement (0.30%) from January to March.
The index measures the overall strength of the housing market based on four indicators: purchase applications, payment to income ratios, percent of borrowers current on their mortgage and employment.
As of March, 14 of the 50 states plus the District of Columbia had MiMi values in the ‘stable’ range, with North Dakota (95.7), the District of Columbia (94.8), Hawaii (90.7), Montana (89.2), and Wyoming (85.7) ranking in the top five.
In addition, 18 of the top 100 largest metropolitan areas had values in the stable range, with Honolulu (91.8); Fresno, Calif. (90.0); Austin, Texas (87.4); McAllen, Texas (85.9) and Los Angeles (85.5) ranking in the top five.
States that saw the greatest degree of improvement, month-over-month, in March were Oregon (2.19%), Michigan (1.71%), Florida (1.52%), California (1.35%) and Kentucky (1.19%). On a year-over-year basis, the most improving states were Nevada (11.40%), Colorado (9.60%), Florida (9.14%), Oregon (8.31%), and Rhode Island (7.97%).
Metropolitan areas that saw the most improvement, month-over-month, were Detroit (2.49%); Fresno, Calif. (2.16%); Portland (2.09%), New Orleans (1.69%) and Milwaukee (1.67%).
‘By adding an additional 50 metro markets to the monthly MiMi we are able to capture greater insights into what's moving local housing markets heading into the spring home buying season,’ says Len Kiefer, deputy chief economist for Freddie Mac, in a release. ‘The good news is after a slight stumble last month, nearly 60 percent of all markets are improving. Also, of the top 100 metro areas, over 60 are showing purchase applications up from the same time last year with over 20 of those metro areas showing double-digit percentage increases.’
‘Likewise, the employment picture continues to improve in most markets helping to support greater interest in purchasing a home,’ Kiefer adds. ‘For example, in markets like Fresno, Calif.; Provo, Utah; and Portland, Oregon; the employment picture continues to improve, home buyer affordability is also strong, and we're seeing purchase applications up nearly 20 percent compared to the same time last year. Even in markets like Seattle where the inventory of for-sale homes is low and affordability is being challenged, we're still seeing a slight pickup in purchase applications over the past three months. However, we are beginning to see flat to slowing purchase applications in those energy states being affected by lower oil prices.’