U.S. Housing Markets 'Struggle' for Stability as Home Prices Moderate: Freddie Mac

Freddie Mac’s latest update of its housing market index finds many states struggling to keep a momentum of recovery as home prices continue to moderate and mortgage purchase applications fall.

The slight declines in Freddie Mac’s index — (-0.45%) from June to July and a 3-month decline of (-0.98%) — is broad-based, and not concentrated in a handful of state or metro markets.
The national Multi-Indicator Market Index (MiMi) value stands at 73.4, indicating a weak housing market overall.
By comparison,  the nation’s all-time MiMi high of 121.9 was June 2008, just before the bottom fell out of the housing market and the financial crisis hit. The index 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 percent rebound.
“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 percent on a yearly basis in the latest MiMi reading.”
Here are other highlights from Freddie’s latest market update:

  • 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.

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