Though recent statistics from one government-sponsored enterprise indicate a relatively weak housing market, a deeper look into the numbers shows increasing stability through the months and years. 

The Multi-Indicator Market Index, or MiMi, is a measure used by Freddie Mac to determine the stability of both the national housing market as well as that of metro areas. The national MiMi value was assessed as 75.4, a figure representing a weak market overall. However, the index has consistently improved - its low was 57.4 in October 2010 – and many signs point toward this trend continuing. Though not exactly explosive, home buying is improving, and that is certainly something to be excited about, considering where the market was a half-decade ago. 

What markets are experiencing improvements?
Though a 75.4 MiMi value is treated as weak – the index’ high was 121.7 in April 2006 – it is certainly an improvement over previous measurements of the housing market. Over the course of three months, the national MiMi value has ticked up 1.24 percent, and year-over-year it increased 3.11 percent. In fact, although generally considered weak, according to its MiMi value, the national housing market isn’t too far off from being considered “in range,” which requires, at least a score of 80. When any given market is described as in range, it means that the four factors used to determine the MiMi value are in balance and consistent with the area’s long term performance, according to Freddie Mac. The four indicators used to determine a region’s MiMi value are purchase applications, the number of mortgages that are not 90 or more days delinquent or in foreclosure, employment and payment-to-income with the benchmarks being 1997 to 2004, 1999 to 2004, 1990 to 2004 and December 1999, respectively. 

Seventeen states are considered in range or better, according to their MiMi values. The best of them are North Dakota, Hawaii, Wyoming and Montana, as well as the District of Columbia. Washington saw the biggest improvement among the states’ scores, with a 2.37 percent month-over-month jump. Year-over-year, Nevada showed the most significant growth with a 9.87 percent surge. At an even more local level, a number of metro markets also indicated substantial improvements. For example, Honolulu, Fresno, Austin, Los Angeles and McAllen, Texas all garnered stable MiMi values, according to the most recent iteration of the index. 

Continued improvement not set in stone
“The nation’s housing markets are getting back on track,” Len Kiefer, Freddie Mac’s deputy chief economist, explained. “Better employment prospects, rising home values and increased purchase activity are all driving improvements in housing markets across the country. In this month’s MiMi three more states and seven metro areas moved within range of their benchmark level of activity.”

Despite the improvements, Kiefer did note that ongoing improvement in housing markets remains somewhat threatened. He noted that “bouts of affordability shock” are possible as market stakeholders try to anticipate what the government’s next moves will be regarding interest rates. Despite the up-and-down potential for MiMi values, depending on what happens with short term interest rates and global growth, the national housing market’s gradual march toward stability remains ongoing.