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National Housing Market Recovery Making Slow Progress

unboxing-houseThe country's housing market continued to inch closer to normalcy in June, but the slow rate of progress remains a concern for analysts.

Freddie Mac's Multi-Indicator Market Index (MiMi) rose 0.04 percent from May to June, ending the year's first half at a reading of 73.7, the company reported Wednesday. On a yearly basis, the gauge improved 7.67 percent.

The monthly index tracks housing market stability at the national, state, and metro level, using home purchase applications, payment-to-income ratios, employment, and proportion of on-time mortgage payments as measures of health. As of the June report, Freddie Mac rescaled the MiMi to make it easier to read, though the underlying data was left untouched.

An index value between 80 and 120 is considered stable, with readings outside that range considered too weak or too high to be sustainable. The all-time high for the MiMi was 121.87 in June 2008, while the low was 59.8 in September 2011, when the housing market was at its weakest. The latest reading marks a 23.2 percent rebound from that time.

"As we see the economy slowly normalizing we're starting to see its effects in the housing market as well, albeit very slowly," said Freddie Mac Chief Economist Frank Nothaft. "The good news is the big housing markets, of which some were also the hardest hit, continue to improve."

Nothaft pointed specifically to California, which has recovered 12 percent from this time last year, with all metros seeing improvements.

Florida and Illinois also looked strong compared to last year, picking up 14.8 percent and 12.9 percent, respectively, while states like North Dakota, Montana, Wyoming, Texas, and Louisiana all continue to look healthy.

"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," Nothaft said.

Nationwide, 13 states and the District of Columbia all have MiMi values in their own stable range, with North Dakota (96.2), Washington, D.C. (94.3), Wyoming (92.3), Montana (89.7), and Alaska (88.7) ranking highest.

Out of the 50 metros surveyed, only six are in a stable range, half of which are in Texas: San Antonio (92.0), Houston (83.9), and Austin (87.4). The others on the list are New Orleans (84.8), Salt Lake City (84.5), and Los Angeles (82.7).

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.

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