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Many states see improvement in local housing markets

The housing market's recovery has been uneven to say the least for much of the last year, and experts are repeatedly dour about the prospects for national improvement going forward. However, that does not mean that many housing markets are not perfectly healthy and continuing their recovery apace.

The overall Multi-Indicator Market Index for the U.S. came in at a reading of 73.4 in July, according to the latest data from the government-sponsored mortgage-backing enterprise Freddie Mac. That may have been down less than 1 percentage point on both a monthly and quarterly basis (which means the market more or less held steady), but it was up more than 5 percent annually, indicating solid improvement. Moreover, that number was up 22.7 percent from the levels seen in Sept. 2011, when the market was at its lowest point. Much of that improvement comes from the fact that a good number of states across the country continue to see significant improvements, even if the national picture is a bit hazier.

"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 Frank Nothaft, the chief economist for Freddie Mac. "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."

Which areas are performing best?
Currently, 13 states plus the District of Columbia are considered to have stable housing markets, all with ratings closer to 100 than to 50, the report said. Leading the way in this regard was North Dakota, at 95.9, slightly ahead of Washington, D.C.'s 94.4. Rounding out the top five were Wyoming, Montana, and Alaska, at 91.3, 89.5, and 88.4, respectively. Meanwhile, Illinois saw the largest month-over-month improvement from June to July, at plus-0.92 percent. Rhode Island, Washington state, Nevada, and Florida were also high on that list, and many of them also featured on the list of states that had the largest annual jumps, led by Nevada at plus-20.51 percent.

This may be good news for lenders operating in those areas, many of which were among the hardest hit in the national housing market overall. If consumers there can continue to show interest as affordability keeps declining, that may be a good sign for the national market overall.

By: Equity National   October 1, 2014     Closing

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