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48 | Th e M Rep o RT O r i g i nat i O n S e r v i c i n g a na ly t i c S S e c O n da r y m a r k e t SERVICING the latest U.S. Housing market tilts toward Stable ground Index shows improvements in three of four market indicators, with home purchase apps falling short. F ollowing a slower than expected summer, the U.S. housing market made up some ground in September as most major indicators inched closer to stability. Freddie Mac's latest Multi- Indicator Market Index (MiMi) saw a 0.5-percent uptick in September, edging up to a reading of 74.4 after months of slight declines. The most recent improvement puts the index just a few points short of the thresh- old that indicates a market has entered "stable" territory. According to Freddie Mac, three of the four major indica- tors tracked in the index saw improvements in September, led by a 1.2-percent gain in the gauge for labor health, which posted a reading of 94. The components measuring payment-to-income ratios and on-time mortgage pay- ments also edged up, rising 0.8 percent to 72.7 and 0.5 percent to 66.6, respectively. Meanwhile, the already weak picture of home purchase applica- tions deteriorated further, falling 0.8 percent to 64.1. As refinances have tumbled from their surge of the last few years, purchase ap- plications have failed to close the gap, resulting in a more anemic mortgage market compared to the housing recovery's early years. As of September's index reading, 14 states and the District of Columbia were in a stable range, with North Dakota (96.5); Washington, D.C. (94.3); Wyoming (91.1); Montana (91.0); and Hawaii (89.3) leading the way. That compares to 13 states with "stable" housing markets in August's report. "Following a similar trend from last month more states and metros continued to show improvement from the very slow summer months," said Len Kiefer, deputy chief economist at Freddie Mac. As with the last few reports, only six of the nation's top 50 metro areas were in a stable range: San Antonio (91.3), Austin, Texas (87.6); Salt Lake City (84.4), Houston (84), Los Angeles (83.5), and New Orleans (82). Meanwhile, a handful of strug- gling states—including Nevada, which ranks lowest in stability with a MiMi value of 54.6—saw significant improvement over the month, with growth topping 1 percent and climbing as high as 2 percent in some places. Of note in the September re- lease: California finally returned to its historical stable range of housing activity for the first time in six years. The long-struggling state still has its challenges, however. "[W]hile the state has made a strong comeback, we already see one of its four indicators elevated and showing that the typical family continues to have to stretch to buy a median- priced house, especially in the Los Angeles metro area," Kiefer explained. "That said, far fewer homeowners are delinquent on their homes, the employment situation continues to improve, and even purchase applications are beginning to turn around." LIA_M_Report_Ad_Knowledge_9x10.875.indd