Room To Grow
There’s still a lot of equity-building potential for home owners. Freddie Mac’s Multi-Indicator Market Index stands at 86, which the residential lending giant says is on the “outer edge of its historic benchmark range of housing activity.” The index has climbed 45 percent since its all-time low set in 2010. It continues to trail way below its historic benchmark of 100 and far away from its high of 121.7. “The purchase applications indicator is up nearly 19 percent from last year, indicating strong housing demand and a market that’s poised to close out the best year in home sales in a decade,” says Len Kiefer, Freddie Mac’s deputy chief economist.
“National home prices have surpassed their pre-recession nominal peak with about half of states still below their pre-recession peak. Factoring in low mortgage rates and modest income gains, house prices still have some room to run, as indicated by the MiMi payment-to-income benchmark which is nearly 33 percent below its historic benchmark. Though we’ve come far, housing still has significant room for improvement in many markets across the country, as indicated by the fact that 24 out of the top 100 metros are still more than 20 percent below their historic benchmark, as measured by MiMi,” Kiefer said.