Freddie Mac said today that the housing recovery continues to be a primarily local phenomenon.  While markets with strong economies and favorable demographics are continuing to improve at a strong pace most markets are still generally weak and the housing market as a whole continues to plod along

The company released its most recent  Multi-Indicator Market Index (MiMi)on Wednesday, with a current value of 73.7.  This indicates a weak housing market overall, with only a slight improvement (0.04 percent) from May to June and a 3-month positive trend of 0.16 percent.  On a year-over-year basis the MiMi has risen by 7.67 percent.   



MiMi combines proprietary Freddie Mac data with current local market data to assess where the nation's housing market as well as those in each of the 50 states and the District of Columbia and the top 50 metro markets is relative to its own long-term stable range.  The index combines data on 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 and the local employment picture 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 and whether each market is moving closer to, or further away from that 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.

The nation's all-time MiMi high of 121.87 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 23.3 percent rebound.

In June, 21 of the 50 states and 25 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.

Thirteen of the 50 states plus the District of Columbia are considered to be in a stable range with North Dakota (96.2) the District of Columbia (94.3), and Wyoming (92.3), ranking as the top three.  Six of the 50 metro areas are also considered stable with San Antonio (92.0), Austin (87.4), and New Orleans (84.8), leading the list.   

Nevada (+1.56%), Illinois (+1.09%), and Connecticut (+0.93%) were the most improved states on a monthly basis, while Nevada (+23.5%), Florida (+14.8%), and Illinois (12.9%) improved the most from the previous year. The most improved metro areas from May to June were Las Vegas and Riverside (tied at +1.69%) followed by San Jose (+1.48%).  On a year-over-year basis the most improving metro areas were Las Vegas (+26.5%), Riverside, (+19.2%), and Miami (+17.2%).

Freddie Mac Chief Economist Frank Nothaft said, "As we see the economy slowly normalizing we're starting to see its effects in the housing market as well, albeit very slowly. The good news is the big housing markets, of which some were also the hardest hit, continue to improve. For example, from the same time last year, California is up 12 percent and every market MiMi tracks in the state is improving. Meanwhile, Florida is up nearly 15 percent and Illinois is up nearly 13 percent over the past year. Likewise, the stalwarts of the recovery continue to be those states in the North Central section of the country, places like North Dakota, Montana, Wyoming and then south to Texas and Louisiana. In these areas not only are markets producing jobs, but better paying jobs that translate into workers taking out applications to purchase a home and income growth that keeps homebuyer affordability strong."

Freddie Mac Deputy Chief Economist Len Kiefer pointed out that the current report includes the first release of quarterly data, providing further analysis beyond the monthly release. "For example, the most improved metro and state markets over the quarter were Las Vegas and Illinois which were up nearly 5 and 4 percent respectively. Though Las Vegas has shown considerable improvement, it is still a weak market, with the lowest overall MiMi index value of 48.2 as of June. Driving the improvement in Illinois over the past three months is the Employment Indicator which is up 16.9 percent while the Current on Mortgage Indicator is up 3.8 percent since March. In fact, the Employment Indicator in Illinois (87.8) moved from Weak to its stable In Range status over the past quarter, reflecting improvements in local labor market conditions."