This Week in Real Estate 7/24/2015 - Housing getting stable

Housing has reached the Stable Range.

Not too hot, not too cold, but just right.  It’s a good way to describe a stable housing market, and that's what the Freddie Mac Multi-Indicator Market Index® (MiMi®) measures.
Local Perspective

The housing crisis and uneven recovery across the nation emphasized that housing activity differs from market to market. To offer a fresh perspective and a better understanding of these local differences, we introduced MiMi.

Each month MiMi provides housing data with local market context for lenders, real estate experts, analysts, economists, reporters, and other industry professionals. By aggregating multiple indicators into a single composite index value for each market covered, MiMi offers unique insight into local housing activity today, over time, and compared to other markets across the nation.

Measuring Stability

MiMi measures the stability of local housing activity by combining current local market data with Freddie Mac data for all 50 states plus the District of Columbia, the top 100 metros, and the nation.

Specifically, MiMi assesses where each market is relative to its own long-term stable range by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of current mortgage payments in each market, and the local employment picture.

The four indicators are combined to create a composite MiMi value for each market. The indicators themselves act as weights on a scale that measure shifts in a particular market. When the indicators are in balance – what MiMi refers to as “In Range” - the market is considered stable and within its long-term normal range. When the indicators move outside of their long-term stable range, the market is considered either weak or elevated.

Overall the Nation is now in the “stable” range with a rating of 79.2

Locally our markets are faring much better.

California                 87.7

San Francisco           88.8
San Jose                    89.8
Sacramento              82.4
Stockton                   80.2
Modesto                   86.0