According to a recent report, the housing markets in Fresno, Austin, Honolulu, Salt Lake City, and Los Angeles are the five most stable markets in the country. This is based on the “MiMi” measurement and ranking system developed by Freddie Mac, the government-regulated buyer of mortgage securities.
The Multi-Indicator Market Index® (MiMi) monitors and measures housing market stability at the national, state and metropolitan level. The index incorporates a variety of data relating to economic and housing conditions, and then assigns a score and ranking for each state and metro.
MiMi uses home loan applications, payment-to-income ratios, local employment data, and other factors to “assess where each single-family housing market is relative to its own long-term stable range.” These indicators are used to create a MiMi value that shows how stable (or unstable) each market is.
5 Most Stable Housing Markets, as of August 2015
Freddie Mac updates their housing stability indicator on a regular basis, to track and report on trends over time. According to their most recent analysis, the real estate markets of Austin, Fresno, Honolulu, Los Angeles, and Salt Lake City are the most stable in the country (among metro areas).
In an accompanying press release, Freddie Mac’s economic team noted:
“Forty-two of the 100 metro areas have MiMi values in a stable range, with Fresno (96.8), Austin (94.9), Honolulu (93.7), Salt Lake City (91.7) and Los Angeles (91.5) ranking in the top five.”
Here’s a closer look at current housing trends in these five markets:
Fresno, California — According to the real estate information company Zillow, home prices within the Fresno housing market rose by 5.8% over the last year or so. Other sources put the year-over-year gains at 9% or higher. Whatever source you choose, the message is the same. Lots of people want to buy a home in Fresno, but inventory is limited. And this is moving prices north. The metro area’s unemployment rate is still well above the national average (as it has been for many months), but that is slowly improving.
Austin, Texas — There is a lot of demand for homes in the Austin metro area as well, and this is boosting house values in the area. According to a recent report by the Austin Board of Realtors, there were more single-family home sales in July 2015 than ever before. Sales in the area rose 12% in July compared to a year earlier. There are plenty of good jobs to go around in Austin, thanks in part to the city’s strong tech sector. This attract new residents and fuels housing demand. Austin was recently ranked as one of the hottest real estate markets in the country by Realtor.com.
Honolulu, Hawaii — A stable housing market isn’t always a hot market. Honolulu is a good example of this. While it currently ranks among Freddie Mac’s top five metros for stability, it’s also flat-lining along a plateau. The Honolulu Star Advertiser recently reported that “Fewer resort homes and residential lots sold during the first half of this year, while the average price was about flat compared with the same period last year.” Zillow’s one-year forecast for the Honolulu real estate market calls for home prices to remain mostly flat over the next year or so.
Salt Lake City, Utah — The real estate market in Salt Lake City could see bigger gains over the next 12 months compared to the last year or so. The economic team at Zillow has forecast a 5.1% increase in home prices over the next year, compared to a gain of 2.4% over the last 12 months. A recent ranking by Trulia put Salt Lake City among the fastest-moving real estate markets in the country, based on how quickly homes are selling in the area. The city appeared at #5 on the company’s list.
Los Angeles, California — Home prices in L.A. County have risen so fast in recent years that some analysts are using the ‘B’ word. Bubble. But a recent Los Angeles Times opinion piece from economist William Yu debunks this notion. As Yu describes it, “the bull market [in real estate] will end eventually, but that doesn’t mean we’re heading for a devastating crash, like in 1990 or 2007.” Let’s hope he’s right.
While these are the most stable real estate markets at the metro level, the country as a whole is also growing stronger. According to Len Kiefer, the Deputy Chief Economist at Freddie Mac:
“Nationally, all MiMi indicators are heading in the right direction. Robust home buyer demand has put total home sales on pace for the best year since 2007 and look for that trend to continue…”
This should come as welcome news for those who are planning to buy a home in 2016.
Disclaimers: This story contains data and commentary from third-party sources that are deemed reliable but not guaranteed. We make no claims or assertions about housing market stability in these five metro areas, or elsewhere in the country.