As the market shifts into a purchase focused market, Freddie Mac decided to launch its new Multi-Indicator Market Index (MiMi) to better track the stability of the housing market and more easily compare it to historical data.
“Housing is changing, and we are moving in a purchase market. Since 2000, mortgages have been dominated by refinances. Rates are reversing and refinances have stayed high. But it is coming down, and by the end of 2014, it will be the first year since 2000 dominated by purchase applications,” Freddie Mac Deputy Chief Economist Len Kiefer said in an exclusive interview with HousingWire.
As Freddie Mac looked over the past year, they really wanted to put the data in context and look at the historical trends in different markets. The main drive behind the tool was to look at what was considered stable in a different time period and bring that to what is currently being seen, so as to put it into context.
MiMi merges four economic indicators — purchase applications, payment-to-income, current on mortgage and employment — with data from multiple sources, including Freddie’s daily business with more than 2,000 mortgage lenders across the country.
“MiMi helps to pinpoint each market's 'sweet spot' by focusing on local housing differences while also tracking the fundamentals necessary for a stable market,” Freddie Mac Chief Economist Frank Nothaft said.
The main purpose is data in context, Keifer said.
“We are trying to continue that tradition and help make this data user friendly and more relevant to put it in perspective, helping us to really track things as we go forwards,” he continued.