Alabama is returning to its historical benchmark level of housing activity, according to a key indicator put out by Freddie Mac.
The Yellowhammer state is one of three that entered the benchmark range on Freddie Mac’s Multi-Indicator Market Index (MiMi). Indiana and New Jersey were the other two states.
Alabama’s MiMi was a strong 80.6 for August, which qualifies as “in range” and “improving.” The state has been improving toward this benchmark for multiple months. Freddie Mac noted in September Alabama was among the most improved states at 1.14 percent.
The state also had improved nearly 2 percent during August.
“Housing markets are on track for their best year in a decade, and that’s reflected in MiMi,” said Freddie Mac Deputy Chief Economist Len Kiefer in a statement. “The National MiMi stands at 85.7, a 5.4 percent year-over-year increase. The MiMi purchase applications indicator is up over 18 percent from last year and is at its highest level since December 2007.
“The housing market is showing strength across the country. The South continues to show some of the biggest improvements, especially in Florida. MiMi’s purchase applications indicator is up more than 30 percent in Florida compared to last year. Meanwhile, in the West, the battle between low mortgage rates and rising house prices continues. So far, low mortgage rates have helped on the affordability front, but in hot markets like Denver, Fresno, Provo and Los Angeles it’s becoming increasingly difficult for the typical family to afford a median-price home.”
Freddie Mac looks at four indicators when calculating the MiMi for state and metro markets, including Purchase Applications, Payment-to-Income, Current on Mortgage and Employment.
During the third quarter, housing activity in Alabama was up, compared with the third quarter in 2015. Sales stood at 15,032, which was 3.7 percent above the third quarter last year and 24 percent better than the five-year average (2011-15) of 12,084 units.
Alabama finished the third quarter with 4,738 homes sold during September, a 3 percent rise over last year.
As one of the top 50 metros measured by Freddie Mac, Birmingham finished August with an MiMi of 85.5, right in line with the national MiMi of 85.7.
The national MiMi was an improvement of 5 percent year-over-year.
During the fall of 2014, Freddie Mac released an MiMi report reflecting that fewer than half of the 50 states and half of the top 50 metro markets were showing positive improvement, with a national MiMi of 74.4.
With Alabama, Indiana and New Jersey entering the benchmark range, 41 states are now seeing housing activity within the historical benchmark.