South Florida Housing Market Improving According To Freddie Mac
The housing market in South Florida still has plenty of room to recover, but it is one of the most-improved metro areas in the nation, according to a report Friday from mortgage company Freddie Mac.
The August Multi-Indicator Market Index showed South Florida — including Miami-Dade, Broward and Palm Beach counties — scored a 69.2, an increase of 11.43 percent from a year earlier. Only Las Vegas (21.53 percent), Chicago (13.98) and Riverside, Calif., (11.99) had higher rates of improvement. Orlando was fifth at 8.70 percent.
Freddie releases the MIMI report each month to measure four key factors in local housing markets: home purchase applications, affordability, mortgage delinquencies and employment. A score below 80 shows weakness, Freddie says. A perfect score is 100.
“Delinquencies have been a real big burden on the [South Florida] market,” said Len Kiefer, Freddie’s deputy chief economist. “Those levels are still pretty high, but they’re coming down sharply. That’s really driving the big market movement in Miami.”
Past-due mortgage payments and purchase applications remain weak across South Florida, but employment and affordability fall into the acceptable range, according to the index.
Existing home prices are leveling off after double-digit gains last year. But Jack McCabe, a Deerfield Beach-based housing analyst, insists that affordability still is a major concern in Palm Beach, Broward and Miami-Dade counties. He said many new homes and condominiums are high-priced residences meant to appeal to wealthy foreign investors, who often turn the properties into rentals. Because of a shortage of land, prices will keep rising for new construction, he said. Mortgage rates hover near 4 percent, but strict underwriting guidelines are keeping buyers out of the market.
“It’s wonderful that mortgage interest rates are so low — if people could actually qualify to get mortgages,” McCabe said. “But they still haven’t loosened credit yet where owner-occupants can buy.”
A year ago, South Florida’s index score was 62.1. The area hit bottom in October 2010 at 42.2. South Florida ranked 27th out of the top 50 metros surveyed, improving two spots from the prior month and 14 spots from a year ago.
Texas dominated the top of the rankings. San Antonio rated as the No. 1 market in the country with a score of 90.9. Austin was second at 87, and Houston third (83.6).
Freddie released the first index in January. Historical data go back to 2001.