Housing Markets Stabilizing, Fundamentals Normalizing
The newly updated Multi-Indicator Market IndexSM (MiMiSM) shows the U.S. housing market continuing to plod along with most markets still generally weak, while those with stronger local economies and favorable demographics continue to improve at a much stronger pace. The second quarter MiMi report is also available, which includes further analysis on each of the states, plus the District of Columbia as well as the top 50 metros areas.
So what's new?
- The national MiMi value stands at 73.7, indicating a weak housing market overall with only a slight improvement (0.04%) from May to June and a 3-month positive trend change of (0.16%). On a year-over-year basis, the U.S. housing market has improved by 7.67%. 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.
- Thirteen of the 50 states plus the District of Columbia have MiMi values in a stable range, with North Dakota (96.2) the District of Columbia (94.3), Wyoming (92.3), Montana (89.7) and Alaska (88.7) ranking in the top five.
- Six of the 50 metro areas have MiMi values in a stable range, with San Antonio (92.0), Austin (87.4), New Orleans (84.8), Salt Lake City (84.5), and Houston (83.9) ranking in the top five.
- The most improving states month-over-month were Nevada (+1.56%), Illinois (+1.09%), Connecticut (+0.93%), Rhode Island (+0.87%) and Colorado and Kentucky (tied at +0.82%). On a year-over-year basis, the most improving states were Nevada (+23.5%), Florida (+14.8%), Illinois (+12.9%), California (12.0%) and South Carolina (+11.9%).
- The most improving metro areas month-over-month were Las Vegas and Riverside (tied at +1.69%) followed by San Jose (+1.48%), Chicago (+1.30%) and Miami (+1.19%). On a year-over-year basis the most improving metro areas were Las Vegas (+26.5%), Riverside, (+19.2%), Miami (+17.2%), Orlando (+16.1%) and Chicago (+15.9%).
- 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.
The economy is slowly normalizing and 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, California is up 12 percent and every market MiMi tracks in the state is improving. We'll have more on this in a following blog post. Florida is up nearly 15 percent and Illinois is up nearly 13 percent over the past year.
And the stalwarts of the recovery continue to be 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.
Also with the latest release of MiMi, the index has been rescaled, making the data more transparent and easier for housing professionals and analysts to follow. The rankings of states and metropolitan areas are unchanged. The underlying data and basic methodology are also unchanged. This release also makes it easier to identify the most improving state and metro markets on a monthly basis.