The U.S. real estate market is stabilizing with housing activity stalling in several states, according to Freddie Mac's latest Multi Indicator Market Index (MiMi).
Freddie Mac's MiMi gauges the health of the real estate market using the latest data in all 50 states plus the District of Columbia, the top 50 metros, and the nation. It analyzes "home purchase applications, payment-to-income ratios, proportion of current mortgage payments in each market, and the local employment picture" to arrive at the results. The index is released every month.
This month's index found that the U.S. housing market improved by 0.86 points on a year-over-year basis. While the national MiMi value is still in negatives (-2.64 points), Freddie Mac experts say that the overall decline has been slight and there has hardly been any month-on-month difference from April to May.
The index revealed that 13 of the 50 states and District of Columbia are in stable range with about eight of the 50 metro areas showing no change in the housing indicators. Many states did show improvement on a year-over-year basis ended May:
- Florida
- Nevada
- California
- South Carolina
- Idaho
And the most improving metro areas for the same period include:
- Miami
- Orlando, Fla.
- Las Vegas
- Riverside, Calif.
- Austin, Texas
"When we look at the other MiMi indicators outside of mortgage purchase applications, the news remains positive - unemployment rates are coming down, more borrowers are paying their mortgages on time, and mortgage rates remain low," Frank Nothaft, chief economist at Freddie Mac, explained in a statement.
"Moreover, while house price growth is moderating, many markets can still sustain additional house price gains while still maintaining strong homebuyer affordability. So we remain cautiously optimistic the housing recovery will continue, albeit slowly, until we see more tightening in the labor markets to give personal incomes a much needed jolt," he added.
The Freddie Mac report is in line with the recent National Association of Realtors report that claimed existing home sales in the country increased on a better job report but a full-fledged growth was held back on a weak wage report.
Take a look at the report here.
"The economy is normalizing from whatever went wrong in the first quarter. Growth is up and running," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York, told Reuters.
