Investments

Freddie Mac: Housing market struggling to keep momentum

Housing prices moderate and purchase applications decline

Freddie Mac’s latest Multi-Indicator Market Index shows the housing market is still struggling to maintain momentum as housing prices continue to moderate and purchase applications fall.

The slight decline in the national MiMi value this month appears to be broad-based, and not concentrated in a handful of state or metro markets.

“We will continue to see ‘two steps forward and one step backward’ movement in our housing stability index until the broader economy sees better growth, labor markets tighten further and household formations pick-up to bring more first-time and move-up buyers into the market,” said Freddie Mac chief economist Frank Nothaft. “The good news is overall the housing market continues to improve and is up 5% on a yearly basis in the latest MiMi reading.”

The national MiMi value stands at 73.4, indicating a weak housing market overall and showing a slight decline (-0.45%) from June to July and a 3-month decline of (-0.98%). On a year-over-year basis, the U.S. housing market has improved (+5.39%). The nation’s all-time MiMi high of 121.9 was June 2008; its low was 59.8 in September, 2011, when the housing market was at its weakest. Since that time, the housing market has made a 22.7% rebound.

"We didn’t notice a large decline in any one market this month, but more of softening across the board. Even the MiMi top ranked state and metro markets all saw a slight decline except for Austin. But the real drag on the most market’s housing recovery continues to be the lack of purchase application activity. Even the hot housing markets in the northwest which are back in their stable range of housing activity are seeing their purchase application activity slow,” Freddie Mac deputy chief economist Len Kiefer. “The one area where momentum hasn’t slowed is among the hardest hit markets. Places like Las Vegas, Miami, Chicago and Riverside, among others, are still showing double-digit yearly improvements, but that’s largely a reflection of significant gains in the local employment picture as well as a real improvement in borrowers making timely mortgage payments.”

Thirteen of the 50 states plus the District of Columbia have MiMi values in a stable range, with North Dakota (95.9) the District of Columbia (94.4), Wyoming (91.3), Montana (89.5) and Alaska (88.4) ranking in the top five.

Six of the 50 metro areas have MiMi values in a stable range, with San Antonio (91.3), Austin (87.5), New Orleans (83.9), Salt Lake City (83.6), and Houston (83.5) ranking in the top five.

The most improving states month-over-month were Illinois (+0.92%), Rhode Island (+0.72%), Washington (+0.53%), Nevada (+0.38%) and Florida (+0.31%). On a year-over-year basis, the most improving states were Nevada (+20.51%), Illinois (+12.16%), Florida (+11.75%), California (9.15%) and South Carolina (+8.01%).

The most improving metro areas month-over-month were Miami (+0.88%), Chicago (+0.64%)   Las Vegas (0.62%), Providence (+0.56%) and Seattle (+0.27%). On a year-over-year basis the most improving metro areas were Las Vegas (+23.35%), Riverside, (+14.97%), Chicago (+14.73%), Miami (+13.70%) and Orlando (+11.93%).

In July, 8 of the 50 states and 11 of the 50 metros are showing an improving three month trend. The same time last year, every state plus the District of Columbia, and every metro was showing an improving three month trend.

About the Author

Most Popular Articles

Housing market flashing recession signal

The housing market is signaling there will be an economic recession by the 2020 election, according to Benn Steil, director of international economics at the Council on Foreign Relations. “When income fails to keep pace with home prices, the latter must fall back,” the post said. “Falling home prices, in turn, drive down household spending.”

Oct 11, 2019 By

Latest Articles

Pennsylvania sues rent-to-own operator Vision Property Management for preying on low-income renters

Vision Property Management has already run into trouble in Wisconsin and New York, with each state claiming that the company’s rent-to-own business model is actually a scam designed to prey on low-income individuals who want to buy a home. And now, the company has another state to deal with: Pennsylvania.

Oct 11, 2019 By