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July 23, 2014

Housing Markets Slog Forward

Research and Analysis
Housing Markets Mimi

Based on the latest release of our new housing index, the Multi-Indicator Market IndexSM (MiMiSM) more markets moved into their stable range of housing activity including Salt Lake City, Los Angeles, Nashville and Pittsburgh metro areas as well as Idaho and Utah states. However, similar to last month, most housing markets remain stalled largely due to weak home purchase mortgage applications.

  • The national MiMi value stands at -2.64 points indicating a weak housing market overall with only a slight decline (-0.05 points) from April to May and a 3-month trend change of (+0.06 points), which is considered flat. However, on a year-over-year basis, the U.S. housing market has improved by 0.86 points. The nation's all-time MiMi low of -4.42 was in November 2010 when the housing market was at its weakest.
  • Thirteen of the 50 states plus the District of Columbia are in their stable range with North Dakota, the District of Columbia, Wyoming, Alaska and Montana ranking in the top five.
  • Eight of the 50 metro areas are in their stable range with San Antonio, Austin, Salt Lake City, New Orleans and Houston ranking in the top five.
  • The most improving states month-over-month were Illinois (+0.05), Massachusetts (+0.04) and New Mexico (+0.01) with Arkansas, Colorado, Montana and Ohio all tied (-0.02.) From one year ago, the most improving states remained unchanged: Florida (+1.68), Nevada (+1.60), California (+1.15), South Carolina (+1.14) and Idaho (+1.11).
  • The most improving metro areas month-over-month were Chicago (+0.04), Riverside (+0.02), and Providence (+0.01) with Boston, Miami, Orlando and Salt Lake City metro areas all tied and unchanged (0.00.) From one year ago the most improving metro areas were Miami (+2.13), Orlando (+1.80), Las Vegas (+1.58), Riverside (+1.53), and Austin (+1.48).
  • In May, 9 of the 50 states and 17 of the 50 metros were showing an improving three month trend. The same time last year, 49 states plus the District of Columbia, and 48 metros were showing an improving three month trend.

This last bullet point says a lot about just how much the housing recovery has slowed from a year ago. The slight silver lining is that these markets aren't declining, they're just flat. And while house price growth is moderating, many markets can still sustain additional house price gains while maintaining strong homebuyer affordability. So we remain cautiously optimistic the housing recovery will continue, albeit slowly. This is likely to remain the case until we see more tightening in the labor markets to give personal incomes a much needed jolt.

The standout in this month's MiMi is the Salt Lake City metro area with three of its four MiMi indicators have returned back in their stable range of activity. In fact, on a yearly basis, the metro area finds its purchase applications are up on a year-over-year basis. The positive trend in home purchase applications reflects a strong local labor market, with employment growth in the Salt Lake City metro area about double the national average.

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