SOURCE: Freddie Mac

Freddie Mac

December 23, 2014 10:00 ET

Better Housing Fundamentals Helping More Markets Stabilize

MCLEAN, VA--(Marketwired - Dec 23, 2014) -  Freddie Mac (OTCQB: FMCC) today released its newly updated Multi-Indicator Market Index® (MiMi®) showing the U.S. housing market continuing to stabilize as 70 of the markets tracked are now showing positive momentum, including two additional metro areas reaching their benchmark stable ranges, San Jose and Pittsburgh.

News Facts:

  • The national MiMi value stands at 74.5, indicating a weak housing market overall but showing a slight improvement (+0.12%) from September to October and a positive 3-month trend of (+0.42%). On a year-over-year basis, the U.S. housing market has improved (+4.48%). The nation's all-time MiMi high of 122.5 was June 2006; its low was 60.3 in September 2011, when the housing market was at its weakest. Since that time, the housing market has made a 23.5 percent rebound.
  • 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 (94.1), Montana (91.2), Wyoming (91.0), and Hawaii (89.2) ranking in the top five.
  • Eight of the 50 metro areas have MiMi values in a stable range, with San Antonio (89.9), Austin (87.0), Houston (85.3), Los Angeles (84.4) and Salt Lake City (83.1), ranking in the top five.
  • The most improving states month-over-month were Colorado (+1.46%), Kentucky (+1.36%), Idaho (+1.09%), Maryland (+1.01%) and North Carolina (+1.00%) On a year-over-year basis, the most improving states were Nevada (+18.95%), Illinois (+10.55%), Florida (+9.42%), Rhode Island (9.19%) and Colorado (+9.00%).
  • The most improving metro areas month-over-month were Kansas City (+3.44), Memphis (+3.41%), Atlanta (+3.14%), Charlotte (+2.87%) and Denver (2.81%). On a year-over-year basis the most improving metro areas were Las Vegas (+23.84%), Chicago (+13.38%), Miami, (+12.50%), Denver (+12.10%) and Riverside (+12.08%).
  • In October, 29 of the 50 states and 41 of the 50 metros were showing an improving three month trend. The same time last year, 39 states plus the District of Columbia, and 43 of the top 50 metro areas were showing an improving three month trend.

Quote attributable to Freddie Mac Chief Economist Frank Nothaft:

"When we look at the stability of the housing market we've seen a modest 0.5 percent improvement since the beginning of the year in the national index. Housing markets continue to heal across the country with those hardest hit showing the biggest improvement. Low mortgage rates have helped, but we also need better household income growth. The employment picture needs to improve more to strengthen wage growth. The good news is we're slowly starting to see this happen in areas like Denver, San Jose, Nashville and Pittsburgh to name a few, where we're also seeing better purchase application activity on a monthly basis."

MiMi monitors and measures the stability of the nation's housing market, as well as the housing markets of all 50 states, the District of Columbia, and the top 50 metro markets. MiMi combines proprietary Freddie Mac data with current local market data to assess where each single-family housing market is relative to its own long-term stable range by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of on-time mortgage payments in each market, and the local employment picture. The four indicators are combined to create a composite MiMi value for each market. Monthly, MiMi uses this data to show, at a glance, where each market stands relative to its own stable range of housing activity. MiMi also indicates how each market is trending, whether it is moving closer to, or further away from, its stable range. A market can fall outside its stable range by being too weak to generate enough demand for a well-balanced housing market or by overheating to an unsustainable level of activity.

For more detail on MiMi see the FAQs. MiMi is released at 10 a.m. EDT monthly. The most current version can be found at FreddieMac.com/mimi

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.