According to Freddie Mac, things are looking up for the South Florida housing market. The August Multi-Indicator Market Index (MIMI) ratings, released last Friday, awarded the Miami Metro Area a score of 69.2. While Miami is still 11 points shy of an “in range” score, this latest score is 11.43% higher than last August’s score, making Miami the fourth most improved metro area from August 2013 to August 2014, behind Las Vegas, Chicago and Riverside, California.
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 50 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.” These four indicators are combined to form a composite score, between 1 and 200. A score below 80 is considered “weak,” while a score above 120 is deemed “elevated.”
The recent improvement in Miami’s score stemmed largely from a significant increase in the “Current on Mortgage” indicator, which measures the proportion of mortgages that are not seriously delinquent (90+ days late on payments or in foreclosure). Nevertheless, delinquency remains abnormally high in the region, with Miami scoring 26.3 points in this area, compared to a national average of 66.4. Miami also scored low in the “purchase applications” indicator, which measures home purchase applications relative to single-family housing stock. A low ratio of home purchase applications to housing stock indicates depressed home sales. Miami scored well above the national average in the Payment-to-Income and Employment Indicators.
This latest MIMI shows the U.S. housing market as a whole stabilizing, with local markets, both large and small, across the country demonstrating improvement.